Belated Return Accepted Without Additions: ITAT Sets Aside S.270A Penalty for Under-Reporting

The Income Tax Appellate Tribunal (ITAT) has set aside a penalty levied under Section 270A of the Income Tax Act for under-reporting of income. The penalty was cancelled because the assessee's belated income tax return, which included the additional income, was accepted by the Assessing Officer without making any further additions. The ITAT observed that since the under-reported income was voluntarily disclosed by the assessee in a belated return and the department accepted this disclosure as complete, there was no case for levying a penalty. The tribunal reasoned that the penalty for under-reporting is intended for cases where the department unearths concealed income, not for situations where the assessee themselves declares the income, albeit in a late return. This ruling provides crucial relief and clarity, differentiating between voluntary disclosure and willful concealment.