HARESH SHARMA,AHMEDABAD vs. ITO, WARD 5(3)(1), AHMEDABAD, AHMEDABAD

ITA 2125/AHD/2026Status: DisposedITAT Ahmedabad21 October 2026AY 2019-20205 pages
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What were the facts?

The assessee, Haresh Sharma, filed an appeal before the Income Tax Appellate Tribunal (ITAT) against an order dated 11.12.2025 passed by the Commissioner of Income Tax (Appeals)/National Faceless Appeal Centre, Delhi. The appeal pertains to Assessment Year 2019-2020. The assessee had originally declared an income of Rs.6,94,640/-. The assessment was completed under Section 147 read with Section 144B of the Income Tax Act, 1961, at an assessed income of Rs.11,15,640/-. Penalty proceedings under Section 270A were initiated for under-reporting of income, and a penalty of Rs.1,99,188/- was levied. The assessee failed to substantiate the under-reporting with valid reasons. The assessee is aggrieved by the confirmation of the penalty by the Ld. CIT(A). At the time of hearing, no one appeared for the assessee.

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 a respectful following of a coordinate bench's order in the case of Hiro Mulchand Tanwani Vs. Income Tax Officer for AY 2019-20. In that case, it was held that the mere fact that an assessee did not challenge a quantum addition does not amount to an admission of concealment or furnishing of false particulars. Penalty proceedings are distinct from assessment proceedings. Section 270A distinguishes between 'under-reporting' and 'misreporting'. Misreporting requires specific circumstances outlined in sub-section (9), such as misrepresentation or suppression of facts. In the present case, the deduction was claimed transparently, and the disallowance was based on the Assessing Officer's adverse view regarding its admissibility. Without cogent evidence of deliberate furnishing of inaccurate particulars or fabricated documents, the higher penalty for misreporting is unsustainable. The penalty levied by the Assessing Officer and confirmed by the Ld. CIT(A) was deleted. The appeal filed by the assessee was allowed.

What were the issues?

1. Whether the penalty levied under Section 270A of the Income-tax Act, 1961, for under-reporting of income is sustainable in law, considering the facts and circumstances of the case? Assessee's Contention: The assessee argued that the penalty order under Section 270A, confirmed by the Ld. CIT(A), was erroneous in law and fact and should be deleted. The assessee reserved the right to modify grounds of appeal. Revenue's Contention: The revenue, through the Sr. DR, did not present any specific arguments as the matter was adjudicated on merits. However, the Assessing Officer initiated penalty proceedings due to the assessee's failure to substantiate the under-reporting of income with valid reasons and documentary evidence regarding bogus donations.

Which sections of the Income-tax Act were involved?

Section 270A,Section 250,Section 139(1),Section 147,Section 144B,Section 80GGC,Section 148

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “SMC” BENCH, AHMEDABAD

For Respondent: Shri Kalpesh Rupavatia, Sr. DR
Hearing: 19.10.2026Pronounced: 21.10.2026

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. 2. The Assessee has raised the following grounds of Appeal:-

ITA No.2125/AHD/2026, AY-2019-20 Haresh Sharma - 2–

1.

The Ld. CIT(A) has erred on law as well as in facts while confirming the penalty order u/s.270A passed by the Ld. Assessing Officer and confirm the penalty of Rs.199,190/- without considering the fact and law of t

The order continues below.

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