A taxpayer who claimed a tax exemption based on the details mentioned in his employer-issued Form 16 was hit with a steep penalty of Rs 51.20 lakh, but the Income Tax Appellate Tribunal (ITAT), Bangalore, has now ruled in his favour, saying the claim was made under a bona fide belief and penalty cannot be imposed mechanically. The case involved Renil E K Kumar, an employee of Wipro Ltd, for the assessment year 2022-23. What happened in this case According to the tribunal order, the taxpayer filed his income tax return on December 30, 2022, declaring total income of Rs 84.27 lakh. While filing the return, he claimed an exemption of Rs 82.05 lakh under Section 10(10CC) of the Income Tax Act in relation to ESOP-related non-monetary perquisites. The claim, according to the taxpayer, was made based on the Form 16 issued by his employer, which reflected this amount as exempt income under Section 10. Since the employer had also not deducted tax at source on this amount, the taxpayer said he believed the tax treatment was correct.