Gunmala Jain Vs ITO (ITAT Jaipur)
Penalty Upheld for Misreporting Where Deduction Withdrawn After Reopening; Withdrawal of Deduction After Reassessment Still Attracts Misreporting Penalty; Reassessed Income Higher Than Original Return Held to Be Underreporting; 200% Penalty Sustained for Misrepresentation in Political Donation Claim; Failure to Prove Bona Fide Donation Leads to Penalty for Misreporting.
The Jaipur Bench of the Income Tax Appellate Tribunal considered an appeal against the confirmation of penalty levied under Section 270A of the Income Tax Act, 1961, for misreporting of income as a consequence of underreporting. The assessee had originally filed a return claiming deduction of ₹80,000 under Section 80GGC on account of donation to a political party. Subsequently, based on information arising from a search conducted in the case of Registered Unrecognized Political Parties, the Assessing Officer received information that the donation was an accommodation entry. Reassessment proceedings were initiated by issuing notice under Section 148 of the Act.
In response, the assessee filed a fresh return withdrawing the deduction claimed under Section 80GGC, stating that the claim was withdrawn to buy peace of mind. The reassessment was completed by accepting the higher income returned, which exceeded the originally processed income by the amount of the withdrawn deduction. Thereafter, penalty proceedings were initiated for misreporting of income, and penalty at 200% of the tax sought to be evaded was levied under Section 270A(9) on the ground of misrepresentation or suppression of facts. The penalty was confirmed by the Commissioner of Income Tax (Appeals).
