Hiring a tax consultant can make filing an income tax return (ITR) easier. However, taxpayers remain responsible for the information submitted in their names, even when a consultant prepares and files the return on their behalf.
A recent ruling by the Pune Income Tax Appellate Tribunal (ITAT) highlights the risks of incorrect deductions or tax benefits being claimed without a taxpayer’s knowledge. The tribunal examined the consequences of such claims and the extent of a taxpayer’s liability.
In this case, the ITAT cancelled a penalty of ₹2.21 lakh imposed on a Bosch employee after his tax consultant allegedly claimed deductions he later disputed.
The ITAT order passed on 2 September 2026 in Dilip Gangaram Mali v. ITO, Ward 2(1), Nashik, dealt with appeals relating to assessment years 2017-18 and 2018-19.
What happened in the ITR case?
The case concerns Dilip Gangaram Mali and relates to assessment years 2017-18 and 2018-19. For 2017-18, he reported an income of ₹5.06 lakh and claimed deductions of ₹2.35 lakh under Chapter VI-A deductions, resulting in a tax refund of ₹83,520.
Following a survey of the tax consultant, the income tax department reopened Mali’s assessment. However, Mali had already filed a revised return on 6 June 2019, increasing his declared income to ₹9.12 lakh and paying ₹1,02,875 towards tax and interest. Here are the key facts and findings of the case.
| Key detail | Amount/date |
| Income originally declared | ₹5.06 lakh |
| Deductions claimed | ₹2.35 lakh |
| Original refund | ₹83,520 |
| Revised income | ₹9.12 lakh |
| Tax and interest paid | ₹1.03 lakh |
| Penalty imposed | ₹2.21 lakh |
Note: For complete details, refer to the ITAT ruling on its official website.
Why did ITAT cancel penalty?
The Pune ITAT referred to an earlier 2025 ruling that involved the same tax consultant. The case underscored that several taxpayers had relied on the consultant to prepare their returns, and excess deductions had allegedly been claimed without their knowledge.
The tribunal also noted that Mali had promptly rectified his return and paid the additional tax and interest before the reassessment notice was issued. Shortcomings were also found in the penalty order concerning the specific misreporting provision invoked under Section 270A.
Based on these observations, the ITAT instructed the Assessing Officer (AO) to delete the penalty. The 2018-19 appeal was also permitted on identical grounds.
What should taxpayers keep in mind?
Taxpayers should not presume that a refund calculated by a tax consultant is automatically going to be considered correct. Before the submission of ITRs, a taxpayer should carefully check:
- The deductions claimed under Section 80C, 80D and other provisions
- Salary details, interest income and other basic data points
- Cross-verification of tax deducted at source (TDS) is a must
- The accuracy of the bank details for the refund. The actual refund amount and other details
- Supporting documentation for every deduction or tax benefit availed
A taxpayer should be aware of the recent tax laws and applicable provisions and should verify their ITR details before filing it, even if a professional prepares the return.
In case of errors, omissions or discrepancies, the taxpayer should promptly rectify the mistake and pay any additional tax and applicable interest.
