MR HEMANT SUDHAKAR AHIRRAO,NASHIK V. ITO, WARD-2(1), NASHIK, NASHIK

ITA 2567/PUN/2025

AI Insights

The case involves Hemant Sudhakar Ahirrao, a salaried employee, who faced penalties for claiming excess deductions under the head 'income from house property' and under Chapter VI-A of the Income Tax Act for the assessment years 2016-17 and 2017-18. The deductions led to an excess refund, which the assessee later realized was due to errors made by his tax consultant, Kishor Patil. Upon realizing the mistake, the assessee voluntarily deposited the excess refund back to the government treasury along with interest before any notice under section 148 was issued. Despite this, penalties were levied by the Assessing Officer, which were contested and ultimately set aside by the Tribunal based on precedents and the specific circumstances of the case.

• Counselvise Citation: [2026] 140 COUNSELVISE.COM (IT) 841939 (ITAT-PUNE)
• Duration Of Justice: 3 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-02-2026
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2016-2017
• Appeal Filed On: 31-10-2025
• Other Referred Cases: Santosh Ashokrao Barhanpurkar vs. ITO, Yogesh Shivaji Shinde vs. ITO, Shashikant Sukdeo Ambekar vs. ITO, Annasaheb Namdeo Gunjal vs. ITO Nashik, Deepak Bhikha vs. ITO Nashik
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: EKNATH ABHANG
• Assessee Lawyers: ABHAY AVACHAT
• Keywords: Set aside; Revised return; TDS; Wrong claim; Reason to believe
• Section: 148; 144; 271(1)(c); 133A

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL PUNE “SMC” BENCH : PUNE BEFORE DR. MANISH BORAD, ACCOUNTANT MEMBER I.T.A.No.2567 & 2568/PUN/2025 (Assessment Years : 2016-17 & 2017-18) Hemant Sudhakar Ahirrao, 3B, Shree Apartment, Mogal Nagar, Near Shivshakti Chawk, Nashik, Maharashtra. PAN : AAUPA 4486 C vs. ITO, Ward-2(1), Nashik. (Appellant) (Respondent) For Assessee : Shri Abhay Avachat, CA For Revenue : Shri Eknath Abhang, Addl.CIT (virtual) Date of Hearing : 03.02.2026 Date of Pronouncement : 23.02.2026 ORDER These appeals at the instance of the same assessee are directed against the different orders of Ld. Commissioner of Income Tax (Appeals)/NFAC, Delhi [“CIT(A)”], dated 10/09/2025 & 02/09/2025 passed u/s. 250 of the Income Tax Act, 1961 (for short, 'the Act') which are arising out of penalty orders evenly dated 26.03.2024 passed u/s. 271(1)(c) of the Act for A.Y. 2017-18 and u/s.270A of the Act for A.Y. 2018-19 respectively. 2. The grievance of the assessee for A.Ys. 2016-17 & 2017- 18 is against the levy of penalty at ₹ 74,408/- u/s. 271(1)(c) and ₹ 1,51,168/- u/s. 270A of the Act respectively. Printed from counselvise.com 2 ITA.No.2567 &2568/PUN /2025 (Hemant Sudhakar Ahirrao) 3. At the outset, learned counsel for the assessee referring to various decisions of this Coordinate Bench including that of Santosh Ashokrao Barhanpurkar vs. ITO in ITA No. 2140/PUN/2024, dated 20.02.2025 submitted that assessee in the instant case, return of income filed by the Tax Consultant, but duly signed by the assessee and inadvertently claimed excess deduction under the head „income from house property‟ and under Chapter VI-A of the Act for the impugned assessment years, but subsequently assessee has received the refund but then it came to his knowledge that excess refund has been received due to wrong claim of deduction. The assessee suo-moto deposited the excess refund to the Government Treasury along with due interest. Subsequent thereof notice u/s. 148 of the Act has been issued, to which assessee failed to furnish the return and Ld.AO has levied the penalty for the wrong/excess deduction claimed by the assessee in the original return. Referring to the judicial precedents, it is submitted that since the excess refund has been deposited back by the assessee in Government Treasury prior to the issuance of notice u/s. 148 of the Act, the assessee should not be deemed to be default and the impugned penalty deserves to be deleted. 4. On the other hand, Ld. Departmental Representative (DR) vehemently argued supporting the order of Ld. CIT(A). Printed from counselvise.com 3 ITA.No.2567 &2568/PUN /2025 (Hemant Sudhakar Ahirrao) 5. I have heard rival contentions and perused the records placed before me. I observe that assessee in the instant case is a salaried employee working with BOSH Ltd. Regular return of income for A.Ys. 2016-17 & 2017-18 furnished on 19.07.2017 claiming refund of ₹ 74,408/- and 75,590/ respectively-. The assessee received the refund after filing the return of income. Thereafter, it came to his knowledge that the Tax Consultant, who prepared the return, has made wrong /excess claim of deduction under the head „income from house property‟ as well as deduction under Chapter VI-A of the Act. Immediately, assessee deposited the refund received from the Income Tax Department to the Government Treasury on 06.06.2019 along with interest of ₹ 8,930/- & ₹ 9,070 for A.Ys. 2016-17 & 2017- 18 respectively. Thereafter, notice u/s. 148 of the Act issued on 17.02.2020 for both the impugned assessment years, however, assessee did not furnish any return of income. In response to the notice u/s. 148 of the Act, Ld.AO proceeded ex-parte qua assessee passing best judgment assessment u/s. 144 of the Act on the basis of original return filed by the assessee. Ld.AO concluded the proceedings making additions for the wrong /excess deduction claimed and also initiated penalty proceedings. However, assessee did not appeared before the Ld.AO during the penalty proceedings and the impugned penalties were levied and the assessee even did not succeed before the Ld. CIT(A). Printed from counselvise.com 4 ITA.No.2567 &2568/PUN /2025 (Hemant Sudhakar Ahirrao) 6 I note that only good thing is assessee, in the instant case, has deposited back the excess refund received by him prior to issuance of notice u/s. 148 of the Act in which the Ld.AO had reason to believe that wrong/excess claim of deduction has been claimed by the assessee. Now, under the given facts and circumstances, various decisions have been rendered by this Tribunal for similar type of assessees who were advised by the Tax Consultant Mr.Kishor Patil to make wrong claim of deduction so as to get excess refund. But in all such cases, the respective assessees have deposited back the excess refund to the Government Treasury prior to issuance of notice u/s. 148 of the Act. I also note that the assessee filed revised computation of income for A.Ys. 2016-17 & 2017-18 in paper book at page No. 15 - 18 & 19-20 of the respective paper books showing correct income. I take note of the decision in the case of Yogesh Shivaji Shinde vs. ITO in ITA No. 168/PUN/2025, dated 08.05.2025 dealing with the levy of penalty u/s. 271(1)(c) of the Act under similar set of facts and circumstances, the finding of the Tribunal reads as under:- “7. We have heard Ld. Counsels from both the sides and perused the material available on record. In this regard, we find that the assessee is a salaried employee & belongs to technical background. The return of most of the employees of CEAT LTD, Bosch Company, HAL & M & M including that of the assessee was filed by a tax consultant namely Kishor Patil. We further find that the assessee came to know from other employees in company that Mr. Kishor Patil with his expertise is able to legally calculate lower tax, resulting in refund of TDS deducted by employer. The assessee was unaware about the contents of the Income Tax Return filed by Kishor Patil & truly believed that the returns are filed legally as per the provisions Printed from counselvise.com 5 ITA.No.2567 &2568/PUN /2025 (Hemant Sudhakar Ahirrao) of the Income Tax Act. The assessee being from technical background does not understand ABCD of Income Tax & therefore completely relied on the above named tax consultant, who without informing him & others, claimed excess deduction under chapter VI-A of the IT Act & claimed refund. It was Kishor Patil who cheated all the employees & claimed excess deduction in their returns without informing them for his own benefit. The fact of the cheating came in light when a survey u/s 133A was conducted at the premises of Mr Kishor Patil. When the fact that this kind of fraud was made in the name of number of persons all of them complaint to the Economic Offence Wing of Police Nashik, against the tax consultant Kishore Patil. The news regarding fraud committed by Kishore Patil also flashed in the daily news paper of Nashik. It is also apparent that there is no mistake of the assessee but it was the hidden interest of the tax consultant who triggered the gun by using shoulders of the assessee & many more for his own benefit. It is also found that as soon as the fact of excess deduction claimed, came to the knowledge of the assessee he immediately paid the due tax with interest, even before the issue of notice u/s 148 of the IT Act & contacted another genuine tax consultant who prepared and furnished correct return in response to the notice u/s 148 of the IT Act. We find that the Assessing Officer has levied penalty u/s 271(1)(c) of the IT Act of Rs.56,350/- on the basis of the fact that the correct income was not returned voluntarily but only after issue of notice u/s 148 of the IT Act. It is also found that when the notice u/s 148 was issued the appellant has disclosed his correct income & paid the due tax before issue of notice. We also find that the Assessing Officer has accepted the return as it is which was furnished by the appellant in response to the notice u/s 148 of the IT Act. We cannot accept the contention of Ld. DR that the revised return was not voluntary therefore the penalty u/s 271(1)(c) of the Act is inevitable. In this regard, the contention of Ld. counsel is also important wherein he stated that the due tax along-with interest was already paid before the issue of notice u/s 148 of the IT Act & admittedly the return of income could not be filed as the due date was already over. We find force in the arguments of the Ld. counsel of the assesse that the amount of tax & interest was deposited voluntarily much prior to the issue of notice u/s 148 of the IT Act since the income tax with interest was deposited by the assesse on 27-05-2019 whereas the notice u/s 148 was issued on 03-03-2020. Considering the totality of the facts of the case, we are of the considered opinion that this is not a fit case to impose penalty u/s 271(1)(c) of the IT Act & accordingly the order passed by Ld. CIT(A)/NFAC is set-aside & the Assessing Officer is directed to delete the penalty of Rs.56,350/- imposed u/s 271(1)(c) of the IT Act. Thus, the grounds of appeal raised by the assessee are allowed.” Printed from counselvise.com 6 ITA.No.2567 &2568/PUN /2025 (Hemant Sudhakar Ahirrao) 7. Similarly, regarding penalty u/s. 270A of the Act also, this Tribunal in the case of Santosh Ashokrao Barhanpurkar (supra) under identical set of facts of a salaried employee of BOSH Ltd. has deleted the penalty u/s. 270A observing as under:- “7. We have heard Ld. DR & perused the material available on record. From the statement of facts, we find that the assessee is a salaried employee of BOSCH Limited & belongs to technical background. The return of most of the employees of Bosch Company, including that of the assessee was filed by a tax consultant namely Kishor Patil. We further find that the assessee came to know from other employees in company that Mr. Kishor Patil with his expertise is able to legally calculate lower tax, resulting in refund of TDS deducted by employer. The assessee was unaware about the contents of the Income Tax Return filed by Kishor Patil & truly believed that the returns are filed legally as per the provisions of the Income Tax Act. The assessee being from technical background does not understand ABCD of Income Tax & therefore completely relied on the above named tax consultant, who without informing him & others, claimed excess deduction under chapter VI-A of the IT Act & claimed refund. It was Kishor Patil who cheated all the employees & claimed excess deduction in their returns without informing them for his own benefit. The fact of the cheating came in light when a survey u/s 133A was conducted at the premises of Mr Kishor Patil. When the fact that this kind of fraud was made in the name of number of persons all of them complaint to the Economic Offence Wing of Police Nashik, against the tax consultant Kishore Patil. The news regarding fraud committed by Kishore Patil also flashed in the daily news paper of Nashik. It is also apparent that there is no mistake of the assessee but it was the hidden interest of the tax consultant who triggered the gun by using shoulders of the assessee & many more for his own benefit. It is also found that as soon as the fact of excess deduction claimed, came to the knowledge of the assessee he immediately contacted another genuine tax consultant who prepared and furnished correct return in response to the notice u/s 148 of the IT Act & paid the due tax with interest, even before the issue of notice u/s 148 of the IT Act. We find that the Assessing Officer has levied penalty u/s 270A of the IT Act of Rs.1,15,938/- on the basis of the fact that the correct income was not returned voluntarily but only after issue of notice u/s 148 of the IT Act. It is also found that when the notice u/s 148 was issued the appellant has disclosed his correct income & paid the due tax before issue of notice. We also find that the Assessing Officer has accepted the return as it is which was furnished by the Printed from counselvise.com 7 ITA.No.2567 &2568/PUN /2025 (Hemant Sudhakar Ahirrao) appellant in response to the notice u/s 148 of the IT Act. We cannot accept the contention of Ld. DR that the revised return was not voluntary therefore the penalty u/s 270A of the Act is inevitable. From the perusal of penalty order, it appears that the penalty u/s 270A was initiated for the assessment year under consideration and subsequently penalty of Rs.1,15,938/- u/s 270A(9) was imposed for underreporting of income as a consequence of misreporting. In this regard, we find that prior to imposition of penalty a notice to show-cause – why an order imposing penalty u/s 270A should not be passed, was issued to the assessee but the particular clause („a‟ to „f‟) of sub-section (9) of section 270A of the IT Act was not mentioned. In such kind of situation, we find support from the decision of Co-ordinate Bench of this Tribunal in the case of Shashikant Sukdeo Ambekar in ITA No.365 & 366/PUN/2023 dated 20-07-2023 wherein under identical facts and similar circumstances the Tribunal has deleted the penalty u/s 270A by observing as under : - “8. In the case under consideration, the AO has failed to identify the specific Clauses from Clause (a-f) of section 270A(9) of the Act. Therefore, respectfully following ITAT Pune and ITAT Mumbai decisions the AO is directed to delete the penalty under section 270A of the Act. Accordingly, grounds of appeal raised by the assessee are allowed.” 8. Respectfully following the above decision passed by the Coordinate Bench of this Tribunal (supra) & also in the light of other decisions passed by coordinate Pune Benches Pune in the case of Annasaheb Namdeo Gunjal vs ITO Nashik in ITA No.182/P/2024 order dated 21-10-2024 & in the case of Deepak Bhikha vs ITO Nashik in ITA No.685/PUN/2024 order dated 21-10-2024 wherein similar penalty was directed to be deleted, we direct the AO to delete the penalty of Rs.1,15,938/- imposed u/s 270A(9) of the IT Act. Thus, the grounds of appeal raised by the assessee in the present appeal are allowed.” 8. On going through the above decisions of this Tribunal, I find that the same are squarely applicable on the facts of the instant case and, therefore, I am inclined to hold in favour of the assessee. Impugned findings of Ld.CIT(A) for A.Ys. 2016- 17 & 2017-18 are set aside and the alleged penalty levied u/s. 271(1)(c) and 270A of the Act are hereby deleted. Effective Printed from counselvise.com 8 ITA.No.2567 &2568/PUN /2025 (Hemant Sudhakar Ahirrao) grounds of appeal raised by the assessee in both the appeals are allowed. 9. In the result, both the appeals filed by the Assessee are allowed. Order pronounced in the open Court on 23.02.2026. Sd/- Sd/- [MANISH BORAD] ACCOUNTANT MEMBER Dated : 23rd February, 2026 vr/- Copy to 1. The appellant 2. The respondent 3. The CIT(A), Pune concerned. 4. D.R. ITAT, SMC Bench, Pune. 5. Guard File. By Order //True Copy // Assistant Registrar ITAT, Pune Printed from counselvise.com "