Hiro Mulchand Tanwani Vs ITO (ITAT Ahmedabad)
No 270A Penalty Merely Because Deduction Claim Failed: ITAT Deletes ‘Misreporting’ Penalty on 80GGC Donation
The Ahmedabad ITAT deleted penalty levied under Section 270A for alleged “misreporting of income” arising from disallowance of deduction claimed under Section 80GGC towards donation to a political party. The Tribunal held that mere disallowance of a deduction claim or non-filing of appeal against the quantum addition does not automatically establish concealment or misreporting.
The assessee had transparently disclosed the donation in the return of income and claimed deduction based on a bona fide belief regarding eligibility. The reassessment proceedings resulted in disallowance of the deduction, following which penalty was levied alleging misreporting. However, the Tribunal observed that Section 270A(9) specifically covers cases involving suppression of facts, false entries, fabricated evidence or deliberate misrepresentation. In the present case, there was no finding that the assessee had furnished false particulars or fabricated documents. The Tribunal emphasized that penalty proceedings are independent from assessment proceedings and that rejection of a claim does not by itself justify penalty for misreporting. Accordingly, the penalty was deleted in full.
FULL TEXT OF THE ORDER OF ITAT AHMEDABAD
The captioned appeal has been filed by the assessee against the order passed by the Ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (in short “NFAC”), Delhi order dated 10.12.2025 relevant to Assessment Year 2019-20.
