Now Reading: ITAT Ahmedabad deletes Rs 2.31 lakh tax penalty
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ITAT Ahmedabad deletes Rs 2.31 lakh tax penalty
The Income Tax Appellate Tribunal, Ahmedabad, has cancelled a Rs 2.31 lakh penalty imposed on Niket Maheshbhai Shah over a Rs 3.71 lakh deduction claimed for a political donation under Section 80GGC.…
The Story in Brief
The Income Tax Appellate Tribunal, Ahmedabad, has cancelled a Rs 2.31 lakh penalty imposed on Niket Maheshbhai Shah over a Rs 3.71 lakh deduction claimed for a political donation under Section 80GGC. Shah had donated through a banking channel to Manav Adhikar National Party and held a certificate from it. The tax department later disallowed the deduction after reopening his assessment following a search involving the party. Shah accepted the disallowance and paid the tax demand, but challenged the penalty.
The tribunal said rejection of a deduction does not automatically prove under-reporting or misreporting. It also found that the penalty order did not state the precise charge or explain how the misreporting conditions under Section 270A(9) applied. The ruling concerns the penalty, not approval of the deduction.
The Indian Opinion
Claims that the tribunal has cleared political donation deductions stretch the ruling too far. It cancelled a penalty because the tax department did not clearly establish the charge, while the deduction itself remained disallowed and the tax was paid. The opposite claim, that every disallowed deduction deserves a 200% penalty, is equally careless. The practical test is whether future orders specify the exact Section 270A violation and explain the evidence for it.
Source: livemint.com
This story was synthesised by AI from the source linked above.
