Ahmedabad: The Income Tax Appellate Tribunal, Ahmedabad, has deleted penalties in at least two cases where political donation deductions were disallowed, holding that disallowance by itself does not indicate misreporting of income.
In an order pronounced in May and released recently, the ITAT-A deleted a penalty of Rs 93,600 levied under Section 270A of the Income-tax Act, 1961. The order relates to Assessment Year 2019-20 and arose from an appeal by the assessee against the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi. ” Padshah added that at least two judgments have been announced with similar views so far. 93,600.
It held that “disallowance of a political donation deduction, by itself, does not amount to misreporting of income when the claim was transparently disclosed in the return and no false particulars were shown”. Holding that no material established suppression, misrepresentation or fabricated documents, the ITAT held the higher penalty for misreporting was “unsustainable in law” and directed deletion of the penalty of Rs. CA Yash Shah said, “The judgements provide relief to the general salaried class in significant numbers.”
The appeal was allowed.
13.25 lakh after claiming deduction of Rs. 1.5 lakh under Section 80GGC for a donation made to a political party named Manavadhikar National Party. The assessment was later reopened under Section 148 to verify the genuineness of the donation.
CA Sulabh Padshah said, “The assessee had filed the return declaring total income of Rs. In the reassessment, the Assessing Officer disallowed the deduction and imposed a penalty under Section 270A treating it as under-reporting “in consequence of misreporting”.