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Forgot to file ITR but employer had deducted TDS: When can income-tax penalty still apply? ITAT explains
Mint 1 hr ago·29 Sept 2026, 4:26 am
The Mumbai Income Tax Appellate Tribunal (ITAT) recently ruled that a taxpayer can avoid a penalty for late filing if the tax department accepts the income declared in a return filed after receiving a notice. In this case, a ship captain had missed the deadline to file his Income Tax Return (ITR). However, after receiving a notice from the tax department, he filed his return. The ITAT found that since the tax department did not raise any objection to the income declared, the penalty for late filing was removed.
This decision clarifies a grey area in tax law for retail investors. It suggests that simply filing a return after a notice does not automatically trigger a penalty, provided the tax department accepts the income figure. For investors, this means that a missed deadline followed by a prompt filing in response to a notice may not always result in a financial penalty, though the specific facts of each case are important.
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