Indian moves to US for job, forgets to file ITR, Income Tax Dept imposes Rs 8.29 lakh penalty; ITAT Jaipur cancels penalty and gives full relief

When Mr Saxena from Malviya Nagar got an onsite job offer from a multinational company in the United States of America (USA) he took it and relocated there. However, in between the rush of shifting to a new country, settling there and getting to know the new workplace, etc, Saxena forgot to file his income tax return (ITR) in India. By the time he remembered, the belated ITR due date also passed away.

In August 2018, Saxena relocated to the US for his new job with an MNC. After missing the deadline for even belated ITR filing in India, finally on August 23, 2019, he voluntarily paid the self-assessment tax of approximately Rs 1.62 lakh, together with applicable interest and late fee, even though no reassessment proceedings had been initiated against him at that time.

He paid the tax and hoped that the Income Tax Department would not impose any penalty on him.


However, the Income Tax Department did impose a hefty penalty of Rs 8.29 lakh on him for misreporting of income as Saxena had earned Rs 26 lakh salary but had not filed any ITR.

To go into technical details, the Income Tax Department had reopened the case after noticing that he had received salary income of approximately Rs 26.06 lakh. In response to the notice under Section 148, Saxena filed his return declaring a total income of Rs 20.49 lakh. The Income Tax Assessing Officer (AO) had accepted Saxena’s ITR filed in response to the Section 148 tax notice without making any variation in the reassessment. However, after this, the AO initiated penalty proceedings under Section 270A and treated the income disclosed for the first time in the Section 148 return as under-reported income.

The AO further characterised the case as one of “misreporting” on the ground of misrepresentation or suppression of facts under section 270A(9)(a). The CIT(A) upheld the penalty.

Saxena tried his best to make the Income Tax Officer understand that his intention was not to avoid tax but he inadvertently forgot, so he paid the tax but the ITR due date was missed. The Income Tax Officer did not accept his explanation and went ahead with the penalty.

On August 17, 2026, Saxena won the case in ITAT Jaipur as the tribunal cancelled the penalty and granted him full relief. Chartered Accountant Jitendra Agarwal represented Saxena in ITAT Jaipur. ITAT Jaipur’s SMC bench who heard this case was composed of Annapurna Gupta, accountant member and Kuldip Singh, judicial member.

Also read: Employee got Rs 30 lakh salary after job switch, did not file ITR, Income Tax dept imposed Rs 3.74 lakh penalty; he fought and won the case in ITAT Delhi

How did Saxena win the case in ITAT Jaipur?

Chartered Accountant Suresh Surana explained to ET Wealth Online that ITAT Jaipur recognised that, technically, where no original ITR is filed and income is disclosed for the first time in a return under Section 148, the statutory framework of Section 270A(2)(b) can result in such income being regarded as under-reported.

However, the Tribunal considered Section 270A(6)(a) equally important. 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.”

That is why Saxena won the case. ITAT Jaipur found his explanation for not filing the ITR credible. The facts also showed that Saxena had historically been tax-compliant and regularly filed his ITR in earlier years. The only time he missed filing ITR is when he relocated to the US.

According to Surana, another important aspect which led to Saxena’s win is the fact that when he discovered he had missed filing an ITR, he voluntarily paid the tax, interest and applicable late fee well before the Income Tax Department initiated any reassessment proceedings.

Surana says: “The first reopening action came only in March 2022, almost three years after his voluntary payment.”

These circumstances, according to the ITAT Jaipur tax tribunal, demonstrated that the failure to file the return was an inadvertent compliance lapse rather than an attempt to evade tax.

Thus, Saxena won the case before ITAT Jaipur as his conduct supported the bona fides of his explanation: he had a history of timely compliance, the failure coincided with his relocation abroad, he voluntarily discharged the tax liability with interest and late fee before any departmental action, and the income subsequently declared in response to Section 148 was accepted without variation.

The ITAT Jaipur therefore held that he was entitled to the protection of Section 270A(6) and directed deletion of the entire penalty of Rs 8,29,034.

ITAT Jaipur also condoned the 49-day delay in filing the ITAT appeal, accepting that the delay arose from a genuine jurisdictional mismatch on the income-tax portal between Kanpur and Jaipur, which the Saxena had actively sought to rectify.

What is the rationale behind the judgement?

Surana says that Saxena’s ITAT Jaipur case indicates that the rationale behind Section 270A is that it should be applied after considering not merely whether the income technically falls within the definition of under-reporting, but also whether the statutory exclusion under Section 270A(6) is available.

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.”

Surana says that once there is no under-reported income for the purposes of Section 270A, there can consequently be no misreporting arising from such under-reporting.