Penalty u/s 270A for bogus claim of deduction under Chapter VIA upheld by ITAT

Penalty u/s 270A for bogus claim of deduction under Chapter VIA upheld by ITAT

In a recent judgment, the ITAT Pune has upheld the Penalty u/s 270A and 271(1)(c) for bogus claim of deduction under Chapter VIA

ABCAUS Case Law Citation:
ABCAUS 4075 (2024) (06) ITAT

In the instant case, the assessee had challenged the order passed by the CIT(A), National Faceless Appeal Centre (NFAC) for three consecutive Assessment Years in confirming penalty u/s 271(1)(c) and 270A of the Income Tax Act, 1961 (the Act).

The appellant assessee was an individual deriving income under the head Salaries. Subsequently, the appellant filed revised Return of Income after substantially increasing the amount of deduction under Chapter VIA of the Act.

The Assessing Officer, on receipt of information that the appellant had made bogus claim of deduction under Chapter VIA of the Act, issued notice u/s.148. In response to the notice u/s.148, the appellant filed the return of income withdrawing part of the claim of deduction under Chapter VIA of the Act.

Against the said return of income, the assessment was completed by the AO accepting the returned income filed in pursuance to notice u/s.148. The AO also initiated penalty proceedings u/s.271(1)(c) for filing inaccurate particulars of income.

In response to the show cause notice, the appellant filed explanation stating that misreporting of income was not intentional. That was unaware of the provisions of the Income-tax Act. He believed a Tax Consultant who used to file the income-tax returns and manipulated the information and filed the revised return without taking his consent.

However, the rejecting the above contentions of the appellant the AO levied penalty u/s 271(1)(c) of the Act for one AY and u/s 270A for two assessment year.

The Tribunal observed that admittedly, the appellant had filed the return of income filed in response to notice u/s 148, and the returned income was more than the income shown in the original return of income filed u/s 139(1) of the Act. This constitutes filing of inaccurate particulars and/or misreporting of income. It was immaterial whether the appellant repaid the refund to the Department with interest or not.

Accordingly, the Tribunal confirmed the penalty levied by AO and confirmed by CIT(A), NFAC. 

Download Full Judgment Click Here >>

• ITAT allows exemption of Rs. 25 lakhs u/s 10(10A) to non-government employees
• PCIT has revisionary jurisdiction u/s 263 over the cases passed by the NFAC or the JAO
• Appellate court interfering with MACT finding must undertake reappreciation of evidence
• When delay is not huge & involves huge monetary liability, lenient approach to be taken
• EoGM of company can not ratify diversion of fund raised by preferential issue – SC