INCOME TAX OFFICER WARD-7(2)(1) AHMEDABAD, AHMEDABAD vs. PARAG CHANDULAL PARIKH, AHMEDABAD

ITA 431/AHD/2026Status: DisposedITAT Chandigarh30 September 2026AY 2019-206 pages
AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that the penalty levied under Section 270A for misreporting of income was not sustainable. The Tribunal relied on the decision in Hiro Mulchand Tanwani Vs. ITO and Siddharth Laxminkant Vaderkar Vs. Income Tax Officer, which held that a claim of deduction made in the return, even if ultimately found inadmissible, does not automatically lead to the conclusion that the assessee has misreported income. The Tribunal noted that penalty proceedings are distinct from assessment proceedings and that Section 270A distinguishes between 'under-reporting' and 'misreporting'. The Revenue failed to establish that the assessee furnished false evidence, suppressed facts, or made deliberate misrepresentation. The Tribunal also observed that the Assessing Officer had not specified the sub-limb of Section 270A(9) under which the penalty for misreporting was levied. Therefore, the deletion of the penalty by the CIT(A) was upheld. The appeal filed by the Revenue was dismissed.

What were the facts?

The Revenue is in appeal against the order of the CIT(A) dated 18/12/2025, which partly allowed the assessee's appeal against a penalty order dated 13/06/2025 passed under Section 270A of the Income Tax Act, 1961, for Assessment Year 2019-2020. The assessee had initially claimed a deduction of INR 90,000 under Section 80GGC for a donation to Rashtriya Samajwadi Party (Secular). Following information from search actions indicating that certain unrecognized political parties were involved in a scam of soliciting bogus donations, the Assessing Officer initiated reassessment proceedings. The assessee then filed a revised return, withdrawing the deduction. The Assessing Officer accepted the revised income but initiated penalty proceedings under Section 270A, levying a penalty of INR 37,440. The CIT(A) deleted this penalty.

What were the issues?

1. Whether the penalty levied under Section 270A of the Act for misreporting of income is sustainable when the assessee had knowingly claimed a bogus deduction of Rs. 90,000/- under Section 80GGC for donation to an unrecognized political party, which was found to be a bogus entity providing accommodation entries. Assessee's Contention: The judgment does not record specific contentions for the assessee regarding the penalty. However, the reasoning of the CIT(A) and the Tribunal implies that the assessee likely argued that the claim of deduction, even if disallowed, was made transparently and did not constitute misreporting of income. Revenue's Contention: The Revenue argued that the CIT(A) erred in deleting the penalty of Rs. 37,440/- made by the Assessing Officer under Section 270A for misreporting of income, without appreciating that the assessee had knowingly claimed a bogus deduction of Rs. 90,000/- under Section 80GGC. The Revenue contended that the Rashtriya Samajwadi Party (Secular) is a registered unrecognized political party (RUPPs) involved in providing accommodation entries and returning donations in cash after deducting commission.

Which sections of the Income-tax Act were involved?

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

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, SMC” BENCH, AHMEDABAD

Per Rahul Chaudhary, Judicial Member:

1.

The present appeal has been preferred by the Revenue against the Order, dated 18/12/2025, passed by the National Faceless Appeal Centre (NFAC), Delhi [hereinafter referred to as the ‘CIT(A)’] whereby the Learned CIT(A) had partly allowed the appeal against the Penalty Order, dated 13/06/2025, passed under Section 270A of the Income Act, 1961 [hereinafter referred to as ‘the Act’] for the Assessment Year 2019-2020. 2. The Revenue has raised the following grounds of appeal:

1.

The Ld.CIT(A) has erred in law and on facts in deleting the Penalty of Rs.37,440/-

The order continues below.

Read the full judgment

A free account opens 10 full judgments a month. Re-reading one you have already opened does not count again.

Create a free accountSign in

See plans and prices

The summary, the parties, the sections and the citations above are open to everyone and always will be. Only the text of the order and the PDF are metered.

More judgments on Section 270A

All 4,156 judgments and leading authorities on Section 270A →

Recent GST High Court judgments

Search GST case law →