NAGAJI AMBABHAI VEKARIYA,PUNE vs. ITO WARD 13(4) , PUNE

Although a number of grounds have been raised by the assessee, however, these all relate to the order of the Ld. CIT(A)/NFAC in confirming the penalty of Rs.3,12,000/- levied by the Ld. Assessing Officer (“AO”) u/s 270A of the Income Tax Act, 1961 (the “Act”) for under-reporting of income due to misreporting.

Briefly stated, the facts of the case are that the assessee is an individual. Based on the information flagged on INSIGHT Portal under Risk Management strategy formulated by the Central Board of Direct Taxes, it was found that the assessee made a bogus donation of Rs.5,00,000/- to a political party, namely Yuva Jan Jagruti Party and subsequently claimed a deduction u/s 80GGC of the Act in his return of income for the FY 2018-19 relevant to the AY 2019-20 under consideration. The case of the assessee was reopened u/s 147 of the Act

On appeal, the Ld. CIT(A)/NFAC confirmed the penalty levied by the Ld. AO by observing as under : “2.1 The case of the assessee is fit for levying penalty u/s 270A. The assessee filed his Income Tax Return on 28.08.2019, declaring a total income of Rs. 26,53,710/- after claiming a deduction of Rs. 5,00,000/- under Section 80GGC of the Income-tax Act, towards a donation made to a political party, namely 'Yuva Jan Jagruti Party', for the Financial Year 2018-19, relevant to the Assessment Year 2019-20. Specific information was flagged on the INSIGHT Portal under the Risk Management Strategy formulated by the CBDT. As per the said information, a search operation was conducted on 07.09.2022 at the premises of the RUPPs group in Ahmedabad, which revealed a scam involving donations to political parties with the intent to claim bogus deductions under Sections 80GGC/80GGB of the Act. These donations were later paid back in modes other than cash including RTGS and NEFT. Since the assessee filed the original return of income with an income of Rs 2653710 and later following issue of notice u/s 147 the donation to political party at Rs 500000 was disallowed. It was found that it is technically a fit case for levying Penalty u/s 270A for under reporting as a consequence of misreporting. The assessee could not give any plausible reason for not having disclosed donation to political party. Assessee claimed the benefit of section 80GGC in the return of income, which was disallowed by the assessing officer u/s 147. Section 80GGC deals with political donations made to recognized political parties otherwise than in cash. Political donations can be made to any Political Party registered under 29A of Representations of the People Act, 1951 except that these donations have to be made in modes other than cash. Assessee contributed Rs 500000 during the year to claim the benefit of section 80GGC. Assessee could not give a plausible explanation for why donation to the political party claimed as a deduction should be allowed. As per the information available with the department, the assessee made a bogus donation of Rs. 5,00,000/- to a political party, namely 'Yuva Jan Jagruti Party'. Furthermore, it is evident

Aggrieved, the assessee is in appeal before the Tribunal.

The Ld. AR submitted that the assessee did not receive any notice of hearing from the office of Ld. CIT(A)/NFAC. No notices were found by the assessee even on the ITBA portal, due to which, the assessee could not make his submissions before the Ld. CIT(A)/NFAC. He, therefore, humbly requested that in the interest of justice, an opportunity may be granted to the assessee to substantiate his case before the Ld. CIT(A)/NFAC by filing the requisite details/explanations.

The Ld. DR strongly supported the order of the Ld. CIT(A)/NFAC and the Ld. AO.

We have heard the Ld. Representatives of the parties and perused the material available on record. We find that the Ld. AO levied penalty of Rs.3,12,000/- for under-reporting of income due to misreporting vide order dated 20.07.2025 which has been confirmed by the Ld. CIT(A)/NFAC for the reasons which we have already reproduced in the preceding paragraphs. Before us, the Ld. Counsel for the assessee has submitted that since the assessee did not receive any notices of hearing from the office of the Ld. CIT(A)/NFAC, he could not make any submissions before him. He submitted that given an opportunity the assessee is in a position to substantiate his case before the Ld. CIT(A)/NFAC by filing the requisite details/explanation. Considering the totality of the facts and in the circumstances of the case, we deem it fit, in the interest justice, to restore the matter back to the file of the Ld. CIT(A)/NFAC to decide the impugned issue afresh as per fact and law after giving reasonable opportunity of hearing to the assessee. Needless to say, the assessee shall provide full support in terms of filing the requisite details/ documents as may be required/called upon by the Ld. CIT(A)/NFAC on the appointed date,

In the result, the appeal of the assessee is allowed for statistical purposes.