THE AMROLI VIBHAG VIVIDH KARYAKARI SAHAKARI MANDLI,SURAT vs. DCIT, CIRCLE-2(3), SURAT

ITA 554/SRT/2026Status: DisposedITAT Surat21 August 2026AY 2009-108 pages
AI SummaryAllowed

What were the facts?

The assessee, a co-operative society, claimed deduction under Section 80P(2)(a)(iii) on interest income earned from members. This deduction was allowed in original and fresh assessments but disallowed during reassessment proceedings under Section 147. Subsequently, a penalty was levied under Section 271(1)(c) based on this disallowance.

What did the Tribunal hold?

The Tribunal held that the assessee had disclosed the income and claimed the deduction based on a bona fide interpretation of the law. The mere disallowance of a claim in quantum proceedings does not automatically attract penalty, especially when the income was not concealed and the claim was made openly.

What were the issues?

Whether a penalty under Section 271(1)(c) can be imposed when a deduction claim, though disallowed in reassessment, was made bona fide and the income was disclosed.

Which sections of the Income-tax Act were involved?

Section 271(1)(c),Section 80P(2)(a)(iii),Section 147

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, SURAT BENCH, SURAT

Before: MS. SUCHITRA KAMBLE & SHRI B.M. BIYANI

For Appellant: Shri Mehul K. Patel, AR
For Respondent: Shri Ashish Kumar, Sr. DR
Hearing: 11.06.2026Pronounced: 21.08.2026

Per B.M. Biyani, A.M.:

Feeling aggrieved by order of first appeal dated 08.01.2026 passed by learned Commissioner of Income-tax-NFAC, Delhi [“CIT(A)”] which in turn arises out of penalty-order dated 22.03.2018 passed by learned ACIT, Circle- 2(3), Surat [“AO”] u/s 271(1)(c) of Income-tax Act, 1961 [“the Act”] for assessment-year [“AY”] 2009-10, the assessee has filed this appeal on following grounds: The Amroli Vibhag Vividh

“1) That on facts, and in law, the learned NFAC has grievously erred in confirming the levy of penalty of Rs. 1,58,834/- u/s 271(1)(c) of the Act. (2) That on facts

The order continues below.

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