Now Reading: ITAT cancels Rs 70,700 tax penalty on Ghaziabad property buyer
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ITAT cancels Rs 70,700 tax penalty on Ghaziabad property buyer
The Income Tax Appellate Tribunal (ITAT) has cancelled a Rs 70,700 penalty imposed on a Ghaziabad taxpayer who bought a property for Rs 48 lakh when its stamp duty value was Rs…
The Income Tax Appellate Tribunal (ITAT) has cancelled a Rs 70,700 penalty imposed on a Ghaziabad taxpayer who bought a property for Rs 48 lakh when its stamp duty value was Rs 58.7 lakh. The Assessing Officer had treated the Rs 10.7 lakh difference as under-reported income and levied a penalty under Section 270A of the Income Tax Act.
The taxpayer, who was semi-literate and had not filed an income tax return initially, received a notice under Section 148. He later filed his return and paid tax on the differential amount. The ITAT Delhi noted the tax department had not produced evidence of intent to conceal income, and held that the taxpayer's case fell under the exception in Section 270A(6)(a) for bona fide explanations supported by material facts.
The ruling underscores that while a property transaction below stamp duty value can trigger scrutiny, a penalty under Section 270A cannot stand if the taxpayer satisfies the exclusion conditions in the law.
Indian Opinion Analysis
Section 270A of the Income Tax Act, introduced in 2016, penalises under-reporting and misreporting of income at 50% and 200% of the tax due on the under-reported amount, respectively. The key distinction in this case was the absence of evidence for deliberate concealment, which shifted the burden to the department. For property buyers, the safest practice remains filing an ITR even for a single transaction and reporting any differential amount voluntarily. The next date for similar appeals before the ITAT may depend on whether the tax department challenges this ruling before a higher court.
Source: livemint.com
This brief was synthesised by AI from the source linked above.
