Sharad Shishir Kabra Vs ITO (ITAT Ahmedabad)
Misreporting Needs a Specific Charge: ITAT Deletes ₹4.99 Lakh Penalty
General Allegation of Misreporting Was Insufficient
The Ahmedabad ITAT deleted a ₹4,99,200 penalty under Section 270A because the Assessing Officer had failed to identify the specific category of misreporting under Section 270A(9) applicable to the assessee.
The Tribunal held that, before imposing the higher penalty for under-reporting consequent to misreporting, the Assessing Officer must establish both the existence of misreporting and its connection with a specified statutory category.
The applicable limb must either be expressly stated in the penalty order or be unambiguously discernible from the order read as a whole. A general invocation of Section 270A(9), without identifying the particular charge, was insufficient in this case.
Political Donation Deduction Triggered the Penalty
The dispute arose from a reassessment for AY 2019-20, completed on 15 February 2025 under Section 147 read with Section 144B.
The Assessing Officer rejected the assessee’s claim for a deduction of ₹8 lakh under Section 80GGC, relating to an alleged donation to Manvadhikar National Party. The disallowance resulted in an addition to the assessee’s income.
Thereafter, by a penalty order dated 20 August 2025, the officer imposed a penalty of ₹4,99,200, treating the matter as under-reporting of income consequent to misreporting.
