BHAVESH RAMESHBHAI PATEL,NARODA vs. ASST. UNIT. INCOME TAX DEPT. (PRESENT JURI. - ITO, WARD 7(2)(1) AHMEDABAD), VEJALPUR

ITA 321/AHD/2026Status: DisposedITAT Ahmedabad30 September 2026AY 2019-206 pages
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What were the facts?

The assessee, Bhavesh Rameshbhai Patel, filed an appeal against the order dated 11.12.2025 passed by the Commissioner of Income Tax (Appeals)/National Faceless Appeal Centre, Delhi, for Assessment Year 2019-2020. The assessment was reopened based on information that the assessee had claimed a deduction of Rs. 3,00,000/- under Section 80GGC for a donation to Rashtriya Samajawadi Party (Secular). In response to the notice under Section 148, the assessee withdrew the deduction claim. The Assessing Officer completed the assessment, determining the total income as per the return. Subsequently, penalty proceedings under Section 270A were initiated for under-reporting income due to misreporting. The Assessing Officer levied a penalty of Rs. 1,87,200/- (200% of the tax of Rs. 93,600/- on the disallowed deduction) on 22.03.2024.

What did the Tribunal hold?

The Tribunal held that the penalty levied under Section 270A for misreporting of income is not sustainable. The decision was based on the principle that a claim for deduction, even if ultimately found inadmissible, does not automatically amount to misreporting of income, unless the revenue demonstrates with cogent evidence that false evidence was furnished, facts were suppressed, or deliberate misrepresentation was made. The Tribunal noted that the assessee had disclosed the donation in the return and claimed deduction based on a belief of eligibility. The disallowance arose from the Assessing Officer's dissatisfaction with the genuineness or eligibility, not from any proven misrepresentation by the assessee. The Tribunal followed the co-ordinate bench's decision in Hiro Mulchand Tanwani Vs Income Tax Officer for AY 2019-20, which held that the mere non-challenge of a quantum addition does not imply misreporting. The penalty was deleted. The Tribunal did not expressly leave any issue undecided.

What were the issues?

1. Whether the penalty levied under Section 270A of the Income Tax Act, 1961, of Rs. 1,87,200/- on the ground of under-reporting income in consequence of misreporting is correct and legal, considering the assessee's contention that there was neither under-reporting nor misreporting of income. (Question of law) 2. Whether the assessee's case falls under the specific clauses of Section 270A(9) of the Act, which defines misreporting of income, and if not, whether the penalty for misreporting is attracted. (Question of law) 3. Whether the lower authorities erred in not specifying how the assessee's case falls under Section 270A(9) and under which specific clause, rendering the penalty illegal. (Question of law) Assessee's arguments: The assessee argued that there was no under-reporting or misreporting of income. They contended that their case does not fall under any of the clauses of Section 270A(9), making the penalty for misreporting incorrect and illegal. The assessee also argued that the penalty was levied without specifying the exact default under Section 270A(9), making it unjustifiable. Revenue's arguments: The judgment records no specific arguments from the revenue's side.

Which sections of the Income-tax Act were involved?

Section 270A,Section 80GGC,Section 250,Section 148,Section 156,Section 147,Section 144B

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “SMC” BENCH, AHMEDABAD

For Appellant: Shri Sulabh Padhsh, AR
For Respondent: Shri Drop Singh Meena, Sr. DR
Hearing: 07.07.2026Pronounced: 30.09.2026

PER DR. B.R.R. KUMAR, VICE-PRESIDENT:

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This appeal has been filed by the Assessee against the order dated 11.12.2025 passed by the Commissioner of Income Tax (Appeals)/National Faceless Appeal Centre, Delhi (hereinafter referred to as ‘Ld. CIT (A)’ in short), under Section 250 of the Income-tax Act, 1961 (hereinafter referred to as ‘the Act’ in short) for Assessment Year 2019- 2020. ITA No.321/AHD/2026, AY-2019-20 Bhavesh R Patel - 2–

2.

The Assessee has raised the following grounds of Appeal:-

1.

The Learned CIT (Appeals) has erred in confirming the penalty levied u/s. 270A of the Income Tax Act of Rs. 1,87,200/-

The order continues below.

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