Dipesh Narendrakumar Patel Vs ITO (ITAT Surat)
The ITAT Surat deleted the penalty of ₹1,12,320 levied under Section 270A of the Income-tax Act, holding that there was neither under-reporting nor misreporting of income by the assessee. The assessee had originally claimed a deduction of ₹1,80,000 under Section 80GGC for a donation to a political party. Following a search operation that revealed alleged bogus donations through certain political parties, the assessee, upon receiving a notice under Section 148, voluntarily withdrew the deduction and filed a revised return declaring the additional income. The Assessing Officer accepted the income declared in the return filed in response to the reopening notice and made no further addition. Despite this, penalty proceedings under Section 270A were initiated and penalty was imposed for alleged under-reporting and misreporting of income. The Tribunal held that once the returned income was accepted without any variation or addition, the case could not be treated as one of under-reporting or misreporting, and therefore the penalty was unsustainable and liable to be deleted.
Core Issue: Whether penalty under section 270A for under-reporting and misreporting of income can be levied when the assessee, after receiving notice under section 148, voluntarily withdrew the deduction earlier claimed under section 80GGC in the return filed in response to the reassessment notice and the Assessing Officer completed the reassessment by accepting such returned income without making any further addition or variation.
