You move abroad for your job but forget to file your Income Tax Return. When you remember, you file your ITR but the date for belated return has also passed and after filing self-assessment tax, you get a notice. What happens now?This is the case of an individual who received an onsite job offer from a multinational company in the United States. He decided to take up the opportunity and moved there. Amid the process of relocating, settling into a new country and adjusting to his new workplace, however, he missed filing his income tax return in India. By the time he realised the mistake, the deadline for filing a belated return had also expired.
What the case is about
He moved to the US in August 2018 for the new assignment. Even after missing the belated ITR deadline, he eventually chose to voluntarily pay self-assessment tax of around Rs 1.62 lakh on August 23, 2019. He also paid the applicable interest and late fee. At that stage, no reassessment proceedings had been initiated against him.Having paid the tax along with the applicable dues, he expected that the matter would end there and that he would not face a penalty from the Income Tax Department.That did not happen. The tax department subsequently imposed a penalty of Rs 8.29 lakh, alleging misreporting of income. The individual had earned a salary of around Rs 26 lakh but had not filed an ITR for the relevant year.The case was reopened by the Income Tax Department after it found that the individuals had received salary income of approximately Rs 26.06 lakh. Following a notice issued under Section 148, he filed an income tax return declaring total income of Rs 20.49 lakh, according to an ET report.The Assessing Officer (AO) accepted the return filed in response to the Section 148 notice and did not make any adjustment to the income declared by the person in the reassessment proceedings.The AO, however, subsequently started penalty proceedings under Section 270A. The income disclosed by the individual for the first time in his return filed in response to the Section 148 notice was treated as under-reported income.The AO went a step further and classified the case as one involving “misreporting”. This was based on an allegation of misrepresentation or suppression of facts under Section 270A(9)(a). The Commissioner of Income Tax (Appeals), or CIT(A), subsequently upheld the penalty.The individual maintained that he had not deliberately attempted to evade tax. His case was that he had simply missed the ITR deadline while dealing with his relocation and new job in the US. He had also voluntarily paid the self-assessment tax, interest and late fee before any reassessment proceedings were initiated.His explanation, however, did not persuade the tax authorities, and the penalty proceedings continued.The person eventually challenged the penalty before the Income Tax Appellate Tribunal (ITAT), Jaipur.
Why ITAT Jaipur ruled in favour of taxpayer
On August 17, 2026, the tribunal ruled in his favour and cancelled the Rs 8.29 lakh penalty, giving him full relief.Chartered Accountant Jitendra Agarwal represented Saxena before the ITAT Jaipur, according to ET.The case was heard by the ITAT Jaipur’s SMC bench comprising Annapurna Gupta, Accountant Member, and Kuldip Singh, Judicial Member.Chartered Accountant Suresh Surana explained to ET that, from a technical standpoint, Section 270A(2)(b) can treat income as under-reported when a taxpayer has not filed an original ITR and discloses that income for the first time in a return filed in response to a Section 148 notice.However, the ITAT Jaipur also considered the exclusion provided under Section 270A(6)(a). Surana says: “The provisions contained in Section 270A(6)(a) excludes an amount from under-reported income where the taxpayer provides a bona fide explanation and has disclosed all material facts necessary to substantiate that explanation.”This provision proved important in this case. The tribunal accepted his explanation for missing the original ITR filing as credible. His earlier tax record also supported his position, as he had regularly filed his ITRs in previous years. The lapse occurred when he relocated to the US for his new job.Another factor considered important by Surana was what the individual did after realising that he had failed to file his return. Instead of waiting for the tax department to take action, he voluntarily paid the tax along with interest and the applicable late fee, and did so before any reassessment proceedings had begun.Surana says: “The first reopening action came only in March 2022, almost three years after his voluntary payment.”The sequence of events supported the individual’s explanation that the missed return was a compliance lapse and not an attempt to avoid tax. His previous record showed regular compliance, the default occurred around the time he moved abroad, and he voluntarily paid the tax, interest and late fee before the department initiated reassessment proceedings.Later, when he filed the return in response to the Section 148 notice, the Assessing Officer accepted the declared income without making any variation.Taking these circumstances together, the ITAT Jaipur held that the individual was entitled to the protection available under Section 270A(6). The tribunal consequently directed that the entire penalty of Rs 8,29,034 be deleted.The tribunal also condoned a 49-day delay in filing the person’s ITAT appeal. It accepted that the delay resulted from a genuine jurisdictional mismatch on the income-tax portal between Kanpur and Jaipur, which the taxpayer had actively tried to resolve.According to Surana, the case demonstrates that Section 270A cannot be applied simply by determining whether income technically falls within the statutory definition of under-reporting. The exclusion under Section 270A(6) must also be considered.Surana says: “Where a taxpayer provides a bona fide and adequately substantiated explanation for the default, and the surrounding conduct supports that explanation, the income may be excluded from the scope of under-reporting.”