AJAYKUMAR RAMANLAL JAIN,AHMEDABAD vs. INCOME TAX OFFICER, WARD 1(2)(1), AHMEDABAD

ITA 1932/AHD/2026Status: DisposedITAT Ahmedabad06 October 2026AY 2019-206 pages
AI SummaryAllowed

What were the facts?

The assessee, Ajaykumar Ramanlal Jain, filed an appeal against the order of the National Faceless Appeal Centre (NFAC), Delhi, dated March 17, 2026, for Assessment Year 2019-20. The appeal challenged a penalty imposed under Section 270A of the Income Tax Act. The assessee had initially claimed a deduction of Rs. 1,00,000 under Section 80GGC for donations to a political party. The Assessing Officer (AO) reopened the case under Section 147 based on information that the donation was bogus. The assessee then filed a revised return under Section 148, withdrawing the deduction and declaring a total income of Rs. 7,46,290. The AO accepted this returned income. Subsequently, penalty proceedings under Section 270A were initiated for misreporting of income, and a penalty of Rs. 41,600 was imposed. The CIT(A) dismissed the assessee's appeal.

What did the Tribunal hold?

The Tribunal held that the penalty under Section 270A for misreporting of income could not be sustained. The undisputed facts showed that the assessee had withdrawn the deduction claimed under Section 80GGC in the revised return filed in response to the notice under Section 148, and the AO had accepted this revised returned income without making any addition or variation. Section 270A contemplates penalties for under-reported income, with enhanced rates for misreporting. However, to sustain a penalty for misreporting, the case must fall within the specific circumstances enumerated in Section 270A(9). The penalty order did not demonstrate which clause of Section 270A(9) was attracted or how its ingredients were satisfied. The mere withdrawal of a claim during reassessment proceedings, without further material, does not, by itself, establish misrepresentation or suppression of facts. The Tribunal followed the decision in Niket Maheshbhai Shah (supra), which held that penalty for misreporting could not be sustained if the AO had not specified the limb of Section 270A(9) or demonstrated its ingredients. Since the assessment did not result in any addition and there was no specific finding establishing that the case fell within the specified circumstances of Section 270A(9), the levy of penalty for under-reporting of income in consequence of misreporting was not sustainable. Accordingly, the penalty of Rs. 41,600 was directed to be deleted. The issue regarding the limitation of reopening under Section 147 was not explicitly decided as the penalty was deleted on merits.

What were the issues?

1. Whether the penalty imposed under Section 270A of the Income Tax Act for alleged misreporting of income concerning a Rs. 1,00,000 deduction under Section 80GGC is sustainable, especially when the AO accepted the revised returned income without any addition. 2. Whether the reopening of the assessment under Section 147 of the Act was beyond the limitation period as per Section 149, rendering the subsequent penalty proceedings void ab initio. Assessee's Contentions: - The AO erred in imposing penalty under Section 270A when the returned income was accepted. - The AO failed to demonstrate how the conditions of Section 270A(9) (misreporting) were satisfied. - The reopening under Section 147 was beyond limitation as per Section 149, making penalty proceedings void. - The assessee had suo motu withdrawn the deduction to avoid litigation. - The penalty computation was arbitrary and lacked proper reasoning or statutory procedure. - Alternatively, the penalty should be levied at 50% of the tax on under-reported income under Section 270A(7), not 200%. - Relied on the decision in Niket Maheshbhai Shah v. Income Tax Officer [ITA No 2341/Ahd/2025, dated 15.05.2026]. Revenue's Contentions: - The Learned Senior Departmental Representative supported the orders of the lower authorities.

Which sections of the Income-tax Act were involved?

Section 270A,Section 270A(9),Section 270A(7),Section 80GGC,Section 147,Section 148,Section 149

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “SMC” BENCH, AHMEDABAD

Before: SHRI NARENDRA PRASAD SINHA & SHRI SANJAY KUMAR

For Appellant: Shri Jagrat Shah, AR
For Respondent: Shri Sachin Kumar, SR-DR
Hearing: 01.09.2026Pronounced: 06.10.2026

PER NARENDRA PRASAD SINHA, ACCOUNTANT MEMBER:

This appeal is filed by the Assessee against the order of National Faceless Appeal Centre (NFAC), Delhi [hereinafter referred to as “CIT(A)”] dated 17.03.2026 for the Assessment Years (A.Y.) 2019-20 in the proceeding u/s 270A of the Income Tax Act [hereinafter referred as “the Act”].

2.

The brief facts of the case are that the assessee had filed his original return of income wherein deduction of Rs. 1,00,000/- was claimed u/s. 80GGC of the Act in respect of donation made to political party. The AO Ajaykumar Ramanlal Jain Vs ITO, AY- 2019-20 2 had reopened the case u/s. 147 of the Act on the basis of i

The order continues below.

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