Indian Man's Tax Penalty Cancelled by ITAT
An Indian taxpayer who relocated to the United States for an on-site job opportunity has received significant relief from the Income Tax Appellate Tribunal (ITAT), Jaipur. Abhishubham Bahadur Saxena, who moved to the US in August 2018, faced a penalty of ₹8.29 lakh for failing to file his Income Tax Return (ITR) in India. The ITAT has now ordered the complete cancellation of this penalty.
Relocation and Missed Deadline
During the relevant financial year, Saxena earned approximately ₹26.06 lakh. However, due to his relocation and the demanding process of settling into a new country, coupled with an admitted lack of familiarity with Indian tax filing procedures, he inadvertently missed the prescribed deadline for filing his ITR. Notably, on August 23, 2019, he voluntarily paid around ₹1.62 lakh in self-assessment tax, along with applicable interest and late fees, before any reassessment proceedings were initiated against him.
Income Tax Department's Action
The Income Tax Department later reopened Saxena's case after identifying his salary income. Following a notice issued under Section 148 of the Income-tax Act, Saxena filed his return, declaring a total income of ₹20.49 lakh. While the assessing officer accepted the declared income without making any additions, penalty proceedings were subsequently initiated under Section 270A. The income disclosed through the reassessment return was treated as under-reported, and the case was further classified as “misreporting” under Section 270A(9)(a), which carries a substantially higher penalty. The total penalty imposed on Saxena amounted to ₹8,29,034, a decision that was initially upheld by the Commissioner of Income Tax (Appeals).
ITAT Jaipur Grants Relief
Saxena argued before the ITAT that his omission was unintentional and not a deliberate act of misreporting. He stated, “Due to my relocation and the demanding schedule of settling into a new country, coupled with my lack of familiarity with the procedural requirements for filing an income tax return in India at that time, I inadvertently missed filing the return by the due date.” He also highlighted his limited understanding of the provisions governing belated returns under Section 139(4).
On August 17, 2026, the ITAT Jaipur ruled in Saxena's favor, ordering the deletion of the entire ₹8.29 lakh penalty. The tribunal held that he was entitled to protection under Section 270A(6), which provides relief from such penalties. Furthermore, the ITAT condoned a 49-day delay in filing his appeal, acknowledging that the delay resulted from a jurisdictional mismatch between Kanpur and Jaipur on the income-tax portal.
Key Takeaways for NRIs
This ruling underscores the crucial distinction between an inadvertent compliance lapse and deliberate income misreporting. It highlights the importance of timely ITR filing for taxpayers relocating overseas, while also providing a precedent for relief in cases where genuine procedural unfamiliarity or relocation challenges lead to missed deadlines, especially when voluntary compliance efforts are made.