MOHIT CHANDUBHAI PATEL,AHMEDABAD vs. ITO WARD-5(3)(1), AHMEDABAD, AHMEDABAD

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ITA 2314/AHD/2026Status: DisposedITAT Ahmedabad28 October 2026AY 2019-207 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal allowed the appeal, holding that the penalty levied under Section 270A was unsustainable. The Tribunal respectfully followed the judgment of its Coordinate Bench in Hiro Mulchand Tanwani v. ITO. The reasoning was that the assessee had disclosed the donation in the return of income and claimed deduction under Section 80GGC based on a belief of eligibility. The disallowance arose from the AO's dissatisfaction with the genuineness or eligibility, not from any misrepresentation or suppression of facts by the assessee. The Tribunal noted that merely not appealing the quantum addition for peace of mind or to avoid litigation does not amount to an admission of concealment or furnishing false particulars. The penalty proceedings are distinct from assessment proceedings. The Tribunal found no material to establish that the assessee furnished false evidence, suppressed facts, or made deliberate misrepresentation. Therefore, the penalty for misreporting under Section 270A was not legally tenable. The Tribunal also noted that the assessee fulfilled the substantive obligation under Section 270AA(1) for immunity from penalty. The penalty of Rs. 1,80,948 was directed to be deleted.

What were the facts?

The assessee, Mohit Chandubhai Patel, an individual with income from salary, filed his return for Assessment Year 2019-20 declaring a total income of Rs. 9,11,860. The Assessing Officer (AO) initiated reassessment proceedings under Section 148A(b) after obtaining information about a donation of Rs. 2,00,000 made to Yuva Jan Jagruti Party. The assessee's objections were disposed of, and a notice under Section 148 was issued. The assessee filed a revised return declaring the same total income. During assessment, the AO issued a show cause notice for disallowing the Rs. 2,00,000 donation. The assessee provided a receipt and bank statement, but the AO disallowed the donation in an order dated 20/01/2025. The assessee did not appeal this order. Subsequently, the AO issued a show cause notice under Section 270A for under-reporting of income due to misreporting, leading to a penalty of Rs. 1,80,948. The assessee appealed this penalty to the CIT(A), who confirmed it. The assessee is now before the ITAT.

What were the issues?

1. Whether, on facts and in circumstances of the case and in law, the Ld. CIT(A) erred in confirming the penalty levied under Section 270A of the Act amounting to Rs. 1,80,948? 2. Whether, on facts and in circumstances of the case and in law, the Ld. AO erred in issuing notice under Section 270A of the Act? Assessee's Contention: The assessee argued that the donation was genuine and supported by documentation. The assessee relied on several judgments of the Co-ordinate Bench of the Tribunal, including Hiro Mulchand Tanwani v. ITO, Niket Maheshbhai Shah v. ITO, Siddharth Vaderkar v. ITO, Nisha Darji v. ITO, and Sunny Varyani v. ITO. Revenue's Contention: The Ld. Senior DR supported the orders of the AO and CIT(A). He argued that the assessee was not going to reveal the wrong claim under Section 80GGC unless prompted by the reassessment proceedings and that the assessee took a chance by claiming a wrong deduction.

Which sections of the Income-tax Act were involved?

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

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, AHMEDABAD BENCHES, AHMEDABAD

Before: NARENDRA PRASAD SINHA & SHRI SANJAY KUMAR

Pronounced: 28.10.2026

आयकर अपील�य अ�धकरण, अहमदाबाद पीठ�, अहमदाबाद INCOME TAX APPELLATE TRIBUNAL, AHMEDABAD BENCHES, AHMEDABAD BENCH: SMC

BEFORE NARENDRA PRASAD SINHA, ACCOUNTANT MEMBER AND SHRI SANJAY KUMAR, JUDICIAL MEMBER ITA 2314/AHD/2026 (िनधा�रण वष�/Assessment Year: 2019-20) Mohit Chandubhai Patel ITO Ward-5(3)(1), Ahmedabad C/O, Divyang J Shah, Chartered Accountants, 201, Devashish Ayakar Bhawan, Vejalpur Vs. Complex, Nr. Regenta Central Ahmedabad-380015, Gujarat Antarim Hotel, Off Cg Road, Ahmedabad-380009, Gujarat अपीलाथ� Appellant ��थ� Respondent

Permanent Account Number of Assessee: AWSPP9837C

अपीलाथ� �ारा/Appellant represented by: Shri Divyang Shah, A. R. ��थ� �ारा/Respondent represented by: Shri Sachin Kumar, Sr. DR. सुनवाई की तारीख / Date of conclusion of hearing: 31.08.2026 घोषणा की तारीख / Date of pronouncement: 28.10.2026 आदेश / ORDER PER SANJAY KUMAR, JUDICIAL MEMBER:- This appeal has been filed by the Assessee against the order dated 29/04/2026 passed by the Ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), 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 2019-20.

ITA 2314/AHD/2026 Mohit Chandubhai Patel) - 2– 2. The Assessee has raised following grounds of Appeal:-

“1. Whether, on facts and in circumstances of the case and in law, Ld. CIT(A) erred in confirming the penalty levied u/s. 270A of the Act amounting to Rs. 1,80,948? 2) Whether, on facts and in circumstances of the case and in law, Ld. AO erred in issuing notice u/s. 270A of the act.”

3.

Brief facts of the case are that the appeal is directed against order dated 29/07/2025 passed under Section 270A of the Act by the AO. The appellant is an Individual having Income from Salary. Appellant has e-filed his return of income for A.Y. 2019-20 on 31/05/2019 vide Ack. No. 521644560220619 declaring total income of Rs. 9,11,860/-. Thereafter, the AO issued notice u/s. 148A(b) of I.T. Act dt. 30/03/2023 along with the page of Insight Portal wherein AO stated that he is in possession of information of donation made of Rs. 2,00,000/- to Yuva Jan Jagruti Party (hereinafter referred to as “the YJJP”). In response to the said notice, Appellant filed his objection vide letter dated 18/04/2023. The objection filed by the Appellant has been disposed of by AO vide order u/s. 148(d) of the I. T. Act dated 26/04/2023 and accordingly AO issued notice u/s. 148 of the I. T. Act dated 26/04/2023. In response to the notice u/s.148, Appellant has filed his return of income on 16/05/2023, vide Acknl. No. 152007050160523 declaring total income of Rs.9,11,860/-.

3.1 During the assessement proceeding, AO has issued various notices and in response to the same, appellant has filed his submission from time to time. During the course of Asst. proceedings, appellant explained and submitted all the details and explanation require from time to time at e filing portal of Income Tax Department. During the course of Asst.

ITA 2314/AHD/2026 Mohit Chandubhai Patel) - 3– Proceeding, AO has issued the Show Cause Notice(SCN) dated 23.12.2024 for disallowance of Rs. 2,00,000/- towards the donation to the political party. In response to the SCN, appellant has filed his reply vide submission letter dated 28.12.2024 wherein appellant submitted that he has given genuine donation and in support of the genuineness of transaction, appellant has submitted the copy of Receipt issued by the YJJP and copy Statement highlighting the transaction towards the payment of donation of Rs. 2,00,000/- etc. and also rely upon the judgment. Subsequently, the Ld. A.O. has passed Asst. order u/s.147 r.w.s 144B of the I. T. Act dated 20/01/2025 disallowing donation of Rs.2,00,000/-. It is the case of the appellant that appellant has not preferred appeal against the asst. order passed by AO because Appellant believes in mental peace and does not want to fall in any litigation. Therefore, Appellant has not preferred appeal and made the payment of demand raised by the AO.

3.2 Thereafter, AO has issued SCN u/s. 270A of the I. T. Act dated 20.01.2025 considering the underreporting of income in consequence of misreporting thereof. In response to the same, appellant has filed his reply vide submission letter dated 01/02/2025 wherein appellant gave his explanation. Thereafter, the AO has passed the order u/s. 270A of the I. T. Act imposing the penalty of Rs. 1,80,948/-. Hence, Appellant is before us.

4.

The Assessee has relied on the judgment of the Co-ordinate Bench of this Tribunal, as under: “(i) Hiro Mulchand Tanwani v. ITO, ITA No. 110/Ahd/2026 dated 15.05.2026. (ii) Niket Maheshbhai Shah v. ITO, ITA No. 2341/Ahd/2025 dated 15.05.2026. (iii) Siddharth Vaderkar v. ITO, ITA No. 1072/Ahd/2026 dated 07.07.2026

ITA 2314/AHD/2026 Mohit Chandubhai Patel) - 4– (iv) Nisha Darji v. ITO, ITA No. 759/Ahd/2026 dated 30.07.2026. (v) Sunny Varyani v. ITO, ITA No. 76/Ahd/2026 dated 30.07.2026.”

5.

Per contra, Ld. Senior DR has supported the order of the Ld. AO and Ld. CIT(A). He has submitted that but for the search on the RUPPs and pursuant to notice u/s 148 of the Act, the Assessee was not going to reveal that he had made a wrong claim u/s 80GGC of the Act and the Assessee took a chance of claiming wrong deduction and getting scot-free.

6.

We have heard the parties and perused the material on record.

7.

It is relevant to refer to the judgment of the Coordinate Bench of this Tribunal in the case of Hiro Mulchand Tanwani (supra). For the sake of ready reference, the relevant portion of said order is reproduced as under: “…3. The assessee challenged the levy of penalty under Section 270A of the Income-tax Act, 1961, contending that the Assessing Officer was not justified in treating the disallowance of deduction claimed under Section 80GGC as a case of “misreporting of income.” The facts reveal that the assessee had filed the return of income for Assessment Year 2019-20 declaring total income of Rs.13,25,710 after claiming deduction of Rs.1,50,000 under Section 80GGC in respect of donation made to a political party, namely Manvadhikar National Party. Subsequently, the assessment was reopened under Section 148 to verify the genuineness of the said donation. In the reassessment completed under Section 147 read with Section 144B, the Assessing Officer disallowed the deduction and assessed the total income at Rs.14,75,710, and thereafter levied penalty of Rs.93,600 under Section 270A on the ground that the assessee had under-reported income in consequence of misreporting.

ITA 2314/AHD/2026 Mohit Chandubhai Patel) - 5– 4. The contention of the Assessing Officer that the assessee had accepted the addition by not filing an appeal against the disallowance cannot, by itself, be a valid basis for concluding that there was misreporting of income. The mere fact that the assessee chose not to challenge the quantum addition due to the relatively small amount involved and in order to avoid prolonged litigation does not amount to an admission of concealment or furnishing of false particulars. It is well settled that penalty proceedings are distinct and independent from assessment proceedings, and the findings in the assessment order are not conclusive for the purpose of levy of penalty. Section 270A draws a clear distinction between “under-reporting of income” and “misreporting of income.” Misreporting is attracted only in specific circumstances enumerated in sub-section (9), such as misrepresentation or suppression of facts, failure to record investments, claiming of expenditure not substantiated by evidence, recording false entries, or failure to report receipts. In the present case, the assessee had duly disclosed the donation in the return of income and claimed deduction under Section 80GGC based on the belief that the payment qualified for deduction. The disallowance arose because the Assessing Officer was not satisfied about the genuineness or eligibility of the donation. However, there is no material on record to establish that the assessee had furnished any false evidence, suppressed any facts, or made any deliberate misrepresentation. A claim of deduction made in the return, even if ultimately found to be inadmissible, does not automatically lead to the conclusion that the assessee has misreported income. Unless the Revenue demonstrates with cogent evidence that the claim was bogus and knowingly made on the basis of false particulars, penalty for misreporting cannot be sustained. At best, the case may fall within the ambit of under-reporting of income, but even that would require the Assessing Officer to establish that the conditions prescribed under Section 270A are satisfied. In the absence of any finding that the

ITA 2314/AHD/2026 Mohit Chandubhai Patel) - 6– assessee deliberately furnished inaccurate particulars or fabricated documents, the higher penalty prescribed for misreporting is not legally tenable. Accordingly, considering that the deduction was claimed transparently in the return of income and that the disallowance was based solely on the Assessing Officer’s adverse view regarding its admissibility, the levy of penalty under Section 270A on misreporting of income is unsustainable in law. The penalty of Rs.93,600 is therefore directed to be deleted…”

7.1 It is not in dispute that the issue raised by the Assessee is covered by the aforesaid judgment of the Coordinate Bench of this Tribunal. Therefore, respectfully following the judgment of the Coordinate Bench, the appeal needs to be allowed.

8.

In view of the aforesaid, respectfully following the decision of the Coordinate Bench of this Tribunal in the case of Hiru Molchand Tanwani (supra) as well as the fact that the Assessee fulfils the substantive obligation u/s 270AA(1) of the Act for grant of immunity from imposition of penalty u/s 270A, we are of the considered opinion that the penalty imposed by the impugned order needs to be deleted.

9.

In the result, the appeal filed by the Assessee is allowed.

The order pronounced on 28.10.2026.

Sd/- Sd/- (NARENDRA PRASAD SINHA) (SANJAY KUMAR) ACCOUNTANT MEMBER JUDICIAL MEMBER Ahmedabad; Dated 28.10.2026 DS, PS

ITA 2314/AHD/2026 Mohit Chandubhai Patel) - 7– Digitally signed by JEETENDRA DEVENDRABHAI UPADHYAY DN: c=IN, o=PERSONAL, JEETENDRA title=6087, 2.5.4.20=7e5568a89b633f174b आदेश की �ितिलिप अ�ेिषत / Copy of the Order forwarded to : 28a80f5e63c638da40b7313fb4 DEVENDRA 7ebaefda841cf59d1703, 1. अपीलाथ�/ The Appellant postalCode=380059, BHAI st=Gujarat, 2. ��थ�/ The Respondent. serialNumber=816dc56e89621 3. संबंिधतआयकरआयु�/ Concerned CIT 1a1a21ccc4abc94ddc94458f4a UPADHYAY 1b37be8e1854e9399295106d4, आयकरआयु�(अपील) /The CIT(A)- 4. cn=JEETENDRA DEVENDRABHAI UPADHYAY 5. िवभागीय�ितिनिध, आयकरअपीलीयअिधकरण, अहमदाबाद/ DR, ITAT, Ahmedabad Date: 2026.10.30 16:20:39 +05'30' गाड�फाईल /Guard file. 6. आदेशानुसार/ BY ORDER, True Copy सहायकपंजीकार (Dy./Asstt. Registrar) आयकरअपीलीयअिधकरण, अहमदाबाद / ITAT, Ahmedabad

1.

Date of dictation (words processed by the Hon’ble JM on his PC) on 13.10.2026. Date on which the typed draft is placed before the Dictating Member 14.10.2026. 2. Other Member .2026. 3. 4. Date on which the approved draft comes to the Sr.P.S./P.S .2026 5. Date on which the fair order is placed before the Dictating Member for pronouncement .2026 Date on which the fair order comes back to the Sr.P.S./P.S .2026 6. Date on which the file goes to the Bench Clerk .2026 7. 8. Date on which the file goes to the Head Clerk .2026 9. The date on which the file goes to the Assistant Registrar for signature on the order Date of Dispatch of the Order .2026 10.

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