Debatable Tax Claims in Good Faith Don’t Attract Section 270A Penalties

Chitra Jaikumar Vs ITO (ITAT Chennai) Income Tax Appellate Tribunal (ITAT) Chennai, in the case of Chitra Jaikumar vs. ITO, ruled that penalties cannot be imposed on debatable tax claims made in good faith. The case involved a retired BSNL employee, Chitra Jaikumar, who claimed full exemption on her leave salary under Section 10(10AA) of the Income Tax Act, 1961. The Assessing Officer (AO) disallowed a portion of the exemption and imposed a 200% penalty under Section 270A(9), citing misrepresentation. The Commissioner of Income Tax (Appeals) upheld the penalty, leading the appellant to challen...