Assessee shall not be Penalized for the Action of the Tax Consultant in claiming an Excessive Refund in Return of Income: ITAT [Read Order]

The Bangalore bench of the Income tax Appellate Tribunal (ITAT) held that the assessee shall not be penalized for the actions of the tax consultant in claiming an excessive refund in return of income.

The assessee has filed the Original Income-Tax Return by disclosing the appropriate assessable income in his tax return. Subsequently, the assessee was approached by a tax consultant and the tax consultant deceived the assessee stating that the return of income filed by you is wrong and same needs to be revised.

Tax consultant took advantage of assessee due to lack of assessee’s knowledge on tax laws and filed the Revised Income-tax Return by claiming excessive refund amounting to Rs. 3,65,340/-.

The assessee is in receipt of scrutiny notice under Section 143(2) of the Income Tax Act and consequent to the said proceedings an order was passed under Section 143(3) of the Act on 30 November 2019 by treating Rs.12,36,600/- as under-reported income with a due demand of Rs. 3,82,109/-

The assessee is in receipt of the Show Cause notice for penalty under Section 270A of the Income Tax Act and the assessee has made his submissions requesting to drop the penalty proceedings.

The two-bench member comprising of Chandra Poojari (Accountant member) and Beena Pillai (Judicial member) remitted the entire issue in dispute in both the appeals to the file of NFAC (First Appellate Authority) for reconsideration and to decide whether the assessee is bonafide in claiming an excessive refund in its return of income and decide accordingly.

If there is no fault of the assessee, the assessee shall not be penalized for the action of the tax consultant. Therefore, the appeal of the assessee is partly allowed for statistical purposes.

To Read the full text of the Order CLICK HERE

Support our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates