Niket Maheshbhai Shah Vs ITO (ITAT Ahmedabad)
The Income Tax Appellate Tribunal (ITAT), Ahmedabad, allowed the assessee’s appeal against the order of the National Faceless Appeal Centre (NFAC) for Assessment Year 2019-20 confirming a penalty of Rs. 2,31,504 levied under Section 270A of the Income-tax Act, 1961.
The assessee had claimed a deduction of Rs. 3,71,000 under Section 80GGC in respect of a donation made through a recognised banking channel to a registered political party, Manav Adhikar National Party, supported by a certificate issued by the donee. The assessment was reopened under Section 147 following a search conducted on the donee and statements recorded from its officials. The Assessing Officer disallowed the deduction. The assessee accepted the disallowance and paid the resultant tax demand to avoid prolonged litigation and also filed an application seeking immunity under Section 270AA, which was rejected on the ground that the income was misreported. Thereafter, the Assessing Officer levied a penalty of Rs. 2,31,504 under Section 270A at 200% of the assessed tax, treating the case as one of under-reporting in consequence of misreporting of income. The CIT(A) upheld the penalty.
Before the Tribunal, the assessee submitted that the deduction under Section 80GGC had been claimed bona fide on the basis of a donation made through banking channels and that the claim could not be regarded as under-reporting or misreporting of income. Reliance was placed on G R Infraprojects Ltd. vs. ACIT, Prem Brothers Infrastructure LLP vs. NFAC, and Abhishek Jayketu Joshi vs. AC Cir 42(2)(1).
