SHRI OMPRAKASH SINGH ,MUMBAI vs. INCOME TAX OFFICER WARD 42(1)(3), MUMBAI

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ITA 9326/MUM/2025Status: DisposedITAT Mumbai04 June 2026AY 2019-206 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the AO failed to specify under which clause of Section 270A(9) the assessee's case fell for levying penalty at the higher rate of 200%. Therefore, the penalty for misreporting could not be sustained.

What were the facts?

The assessee claimed a deduction under Section 80GGC for donations to a political party. The Assessing Officer (AO) disallowed this deduction and initiated penalty proceedings under Section 270A for misreporting income. The CIT(A) confirmed the penalty.

What were the issues?

Whether the penalty under Section 270A for misreporting of income was sustainable when the AO did not specify the exact instance of misreporting as per Section 270A(9)?

Which sections of the Income-tax Act were involved?

Section 270A,Section 80GGC,Section 147,Section 144,Section 144B

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, MUMBAI BENCHES, MUMBAI

Before: HON’BLE SHRI PAWAN SINGH & HON’BLE SHRI GIRISH AGRAWAL

For Respondent: Shri Ujjwal Kumar, Sr. DR
Pronounced: 04.06.2026

INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCHES, MUMBAI BENCH: SMC BEFORE HON’BLE SHRI PAWAN SINGH, JUDICIAL MEMBER AND HON’BLE SHRI GIRISH AGRAWAL, ACCOUNTANT MEMBER ITA 9326/MUM/2025 निर्धारणवर्ा/Assmt. Year:2019-20) Permanent Account Number: AADPS8268F INCOME TAX OFFICER SHRI OMPRAKASH SINGH WARD 42(1)(3) 802, SILICON APARTMENT KAUTILYA BHAVAN, CHS HOLY CROSS ROAD, BANDRA Vs. BORIVALI (W), MUMBAI- MUMBAI-400051, 400103, MAHARASHTRA MAHARASHTRA (अपीलार्थीAppellant) (प्रत्यर्थीRespondent)

निर्धाऩितीद्वधिध/Assessee represented by: Shri H. N. Motiwala, CA िधजस्विद्वधिध/Revenue represented by: Shri Ujjwal Kumar, Sr. DR

सुिवधईकीतधिीख/Date of conclusion of hearing: 09.03.2026 घोषणधकीतधिीख/Date of pronouncement: 04.06.2026 आदेश / ORDER PER GIRISH AGRAWAL, ACCOUNTANT MEMBER: This appeal is filed by the assesseeis against the order of Ld. CIT(A)/National Faceless Appeal Centre (NFAC), Delhi vide DIN: ITBA/NFAC/S/250/2025-26/1082990854(1) dated 25.11.2025 passed against the assessment order by the Assessment Unit of the Income-tax Department u/s 147 r.w.s 144 read with section 144B of

ITA 9326/Mum/2025 Shri Omprakash Singh A.Y. 2019-20

the Income-tax Act, 1961 (hereinafter referred to as the “Act”), dated 17.06.2024 for the Assessment Year 2019-20.

2.

Assessee has raised the following grounds of appeal:

i. On the facts and in the circumstance of the case the learned Commissioner of Income tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi, erred in confirming the order of the Assessment Unit, Income tax Department in respect of penalty under section 270A of the Act amounting to Rs. 1,87,200/- being 200% of the tax on under reporting income which is in consequence of misreporting thereof without referring of any of the clauses of section 270A(9) of the Act. ii. On the facts and in the circumstance of the case the said learned Commissioner of Income tax has also erred in confirming the order of Assessment Unit under section 270A of the Act, amounting to Rs. 1,87,200/- for misreporting of income, particularly when the appellant had correctly reported the income, which had been accepted by the Assessment Unit, but while making the assessment, the Assessment Unit has disallowed the deduction under section 80GGC of the Act i. e. Chapter VIA. iii. On the facts and in the circumstance of the case the learned Commissioner of Income tax has also erred in confirming the penalty under section 270A of the Act, particularly when, show cause notice is vague as it does not specify whether the penalty is for "under reporting" or "misreporting of income". 2.1. The only issue involved is in respect of imposition of penalty under section 270A of Rs. 1,87,200/-, being 200% of the tax on account of under reporting of income which is in consequence of misreporting thereof, arising out of disallowance of deduction claimed under section 80GGC.

3.

Briefly stated, facts of the case are that assessee filed his return of income on 09.07.2019, reporting total income at Rs. 13,64,890/- which was subsequently revised with total income at Rs. 13,56,020/-. Later, reassessment proceedings were initiated under the provisions of section 148A and thereafter, notice under section 148 was issued. The said proceedings were initiated based on information available with the

ITA 9326/Mum/2025 Shri Omprakash Singh A.Y. 2019-20 ld. AO that assessee had made donation to political party and claimed deduction under section 80GGC of Rs. 3,00,000/-.

4.

In the course of assessment proceedings, assessee furnished his reply in respect of the claim of deduction by furnishing copies of donation receipts of Rs. 2,00,000/- and Rs. 1,00,000/-. He made a detailed submission explaining his case for the donation made by him and deduction so claimed vide his letter dated 09.07.2024 which the ld. AO has reproduced in the assessment order. Assessee was show caused as to why the penalty proceedings under section 270A(1) read with section 270A(9) may not be initiated for under reporting of income in consequence of misreporting thereof. According to him, since there was no response from the assessee, he proceeded to disallow the claim of deduction made by the assessee under section 80GGC by accepting the total income as per the return filed under section 139 and processed under section 143(1) at Rs. 13,56,020/- and made an addition of Rs. 3,00,000/- to this for the disallowance of deduction, to determine total income at Rs. 16,56,020/-.

5.

Penalty proceedings were undertaken whereupon ld. AO imposed penalty at the rate of 200% of the tax computed on the under reported income which is in consequence of misreporting thereof. Ld. CIT(A) confirmed the penalty so imposed against which the assessee is before the Tribunal.

6.

We have heard both the parties and perused the material on record. Ld. Counsel for the assessee submitted in addition to the above stated factual matrix that it is a case where the income of the assessee has been accepted except for the disallowance of deduction claimed under section 80GGC for which also, all the required documentary evidence and explanation were furnished, placed on record. Assessee

ITA 9326/Mum/2025 Shri Omprakash Singh A.Y. 2019-20 did not contest the disallowance made by the ld. AO to bring to rest the proceedings so initiated and paid the demand raised thereon.

6.1. It is not the case of misreporting as contemplated under the provisions of section 270A(9) which lists down six specific instances which shall be taken as misreporting of income liable to higher rate for computation of penalty. The six distinct instances which qualifies under reporting as a consequence of misreporting, enunciated in section 270A(9) are as under:

a. misrepresentation or suppression of facts; b. failure to record investments in the books of account; c. claim of expenditure not substantiated by any evidence d. recording of any false entry in the books of account e. failure to record any receipt in books of account having a bearing on total income; and f. failure to report any international transaction or any transaction deemed to be an international transaction or any specified domestic transaction, to which the provisions of Chapter X apply.

7.

Ld. Counsel for the assessee strongly asserted that ld. AO has nowhere stated under which of the above six specific instances, case of the assessee falls for levying penalty on the higher rate of 200%. He has merely mentioned that penalty proceedings under section 270A(1) read with section 270A(9) is initiated for under reporting of income in consequence of misreporting thereof. Ld. AO failed to bring out how the addition disallowance made by him for deduction claimed under section 80GGC leads to misreporting of income and which of the six distinct instances gets attracted. According to the ld. Counsel, it is a case of arbitrary use of power at the end of ld. AO for imposition of impugned penalty with a pre-determined mind, unsustainable under the provision of the Act.

ITA 9326/Mum/2025 Shri Omprakash Singh A.Y. 2019-20

7.1. The question is whether the AO’s action to levy penalty u/s 270A(9) of the Act is sustainable in the given facts of the case. In order examine this, let us have a look at relevant provisions of section 270(8) and (9) of the Act which reads as under: -

“Penalty for under-reporting and misreporting of income.

270A. (1)……………………….

(8) Notwithstanding anything contained in sub-section (6) or sub- section (7), where under-reported income is in consequence of any misreporting thereof by any person, the penalty referred to in sub- section (1) shall be equal to two hundred per cent of the amount of tax payable on under-reported income.

(9) The cases of misreporting of income referred to in sub-section (8) shall be the following, namely :-

a. misrepresentation or suppression of facts; b. to record investments in the books of accounts; c. claim failure of expenditure not substantiated by any evidence; d. recording of any false entry in the books of account; e. failure to record any receipt in books of account having a bearing on total income; and f. failure to report any international transactions or any transaction deemed to be an international transaction or any specified domestic transaction, to which the provisions of Chapter X apply.”

7.2. Ld. AO has levied the higher penalty of 200% of the tax payable on misreporting of income. It is discerned that he has failed to spell out as to how the assessee's case/disallowance falls within the ken of instances given in clause (a) to (f) of section 270A(9). Since ld. AO has failed to bring the disallowance, he made in quantum assessment within the ambit of clauses (a) to (f) of section 270A(9), the penalty

ITA 9326/Mum/2025 Shri Omprakash Singh A.Y. 2019-20 levied for misreporting @ 200% cannot be sustained. It is a trite law that penalty provisions have to be strictly interpreted. Accordingly, in the stated facts and circumstances of the case, we find that the levy of penalty by the ld. AO u/s 270A does not survive and therefore, is deleted. Grounds raised by the assessee are allowed.

8.

In the result, appeal filed by the assessee is allowed.

Order pronounced in the open court on 04.06.2026

Sd/- Sd/- (Pawan Singh) (Girish Agrawal) Judicial Member Accountant Member Ankit, PS Mumbai Dated: 04.06.2026 Copy to:

SHRI OMPRAKASH SINGH 802, SILICON APARTMENT CHS 1 HOLY CROSS ROAD, BORIVALI (W), MUMBAI-400103, MAHARASHTRA

INCOME TAX OFFICER WARD 42(1)(3) 2 KAUTILYA BHAVAN, BANDRA MUMBAI-400051, MAHARASHTRA 3 THE PCIT / CIT, 4 THE D.R., ITAT, MUMBAIBENCH 5 GUARD FILE

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