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Could not reveal income by mistake? No I-T fine

Punching error by tax-return filing website, resulted in under-reporting of salary income

Policy Pulse
Publish Date: Apr 28 2016 1:30PM | Updated Date: Apr 28 2016 4:47PM

Could not reveal income by mistake? No I-T fine

 Mumbai bench of the Income-Tax Appellate Tribunal (ITAT), recently dismissed the penalty levied by income-tax officials for 'concealment of income' in the hands of a salaried person, a report in ‘The Times of India’ has said.

A punching error by an online tax-return filing website, whose services salaried employee (taxpayer) had enlisted, resulted in under-reporting of salary income in taxpayer's I-T return. 
Tax officials deliberated that such under-reporting of income as an attempt to hide income and forced a heavy penalty on the taxpayer.
After going through facts of the case and the personal situations of the taxpayer, the ITAT dismissed fine, on the ground that tax payer had no intent to evade tax or claim refunds doubtfully.
Tribunal also observed that I-T officials have full informations of salary income of a taxpayer in their data base, as quarterly returns of TDS are filed by the employer. 
Employers also issue form no 16 to employees which contains salary and TDS details. Therefore, it is not very possible for a salaried person to evade taxes by filing erroneous salary particulars or by concealing salary income.
The ITAT order is taxpayer friendly, as it recognised that a taxpayer should not be penalised for negligence committed by an online tax- return filing portal. 
However, this order cannot have a blanket application on all other cases where income has been under-reported in I-T returns, caution tax officials and tax experts.
Currently, all taxpayershaving an income of over Rs 5 lakh are required to file their I-T returns online. 
During 2015-16, 4.34 crore I-T returns were filed electronically, a rise of nearly 27% over last year, according to statistics released by the ministry of finance.