Debatable Issue, No Penalty – ITAT Deletes U/s 270A Penalty on Land Classification

Rajah Uma Vs DCIT (ITAT Chennai) The assessee initially declared capital gains on sale of land and paid tax, but later filed a revised return claiming it as agricultural land (not a capital asset) based on distance criteria from municipal limits. The AO rejected the claim and levied penalty u/s 270A alleging misreporting of income. Before the Tribunal, it was established that all facts were fully disclosed and the dispute was purely regarding whether the land was within or beyond 6 km-i.e., a factual and debatable issue. The ITAT held that: There was no concealment or false reporting The asse...