Reena Ayan Shah Vs The ITO (ITAT Ahmedabad)
Donation Withdrawn, Tax Restored—200% Penalty u/s 270A Cannot Ride Merely on a Failed Claim u/s 80GGC
The Donation & the Departmental Alert
The Assessee filed her original return declaring total income of ₹7,89,410 after claiming deduction of ₹1,50,000 u/s 80GGC in respect of a political donation.
Subsequently, information available with the Department allegedly indicated that the donation was bogus. The case was classified as a “High Risk CRIU/VRU Case” under CBDT’s Risk Management Strategy through the Insight Portal.
The assessment was reopened & notice u/s 148 was issued on 20.04.2023. In response, the Assessee filed a return on 22.05.2023 declaring total income of ₹9,36,400 after withdrawing the deduction of ₹1,50,000 claimed earlier.
The AO completed reassessment on 28.11.2024. The income disclosed in the return filed pursuant to reopening was accepted without any further variation. Nevertheless, the AO concluded that the original deduction represented furnishing of inaccurate particulars, resulting in under-reporting through misreporting of income u/s 270A(9).
A ₹62,400 Penalty Despite No Further Addition
During the penalty proceedings, notices were issued on 28.02.2025 & 11.03.2025. The Assessee explained that the deduction had been claimed in good faith & without any mala fide intention.
