--- title: "No Penalty u/s 270A for 80GGC Claim Withdrawn Voluntarily | BNPS and Associates LLP" url: "https://bnpsca.com/insight/no-penalty-u-s-270a-for-80ggc-claim-withdrawn-voluntarily" description: "ITAT deletes the penalty u/s 270A" --- # No Penalty u/s 270A for 80GGC Claim Withdrawn Voluntarily Written by: **[CA Divyang J Shah](https://bnpsca.com/partner/ca-divyang-j-shah)** \| Topic: **Income Tax** ![No Penalty u/s 270A for 80GGC Claim Withdrawn Voluntarily](https://imageproxy.inlancer.in/pr:sharp/f:webp/rs:fit:1200:0/g:sm/plain/https://bnpsca.com/public/assets/upload/images/original/6867a53746e70-Compliance.jpg)11-09-2026 ITAT deletes the penalty u/s 270A ### No penalty for misreporting where 80GGC claim is voluntarily withdrawn: ITAT Ahmedabad **Facts of the Case** The assessee had claimed a deduction of ₹1,50,000 under Section 80GGC in her original return of income for AY 2019-20. The case was subsequently flagged as a "High Risk CRIU/VRU Case" under CBDT's Risk Management Strategy, based on information that the donation was routed through a bogus entity. Reassessment proceedings under Section 147 read with Sections 144/144B were initiated, and a notice under Section 148 was issued. In response, the assessee filed an updated return withdrawing the 80GGC claim in full and paying the resultant tax and interest. The Assessing Officer made **no addition** to income in the reassessment order — the returned income was accepted as revised. Despite this, the AO levied a penalty of ₹62,400 under Section 270A, treating the original claim as amounting to "misreporting" of income. The CIT(A) confirmed the penalty, holding that the assessee had failed to substantiate the genuineness of the donation. **Issue Before the Tribunal** Whether a deduction claimed in good faith, later disallowed and voluntarily withdrawn without any addition to income, can be treated as "misreporting" attracting the higher penalty under Section 270A — as opposed to mere "under-reporting," or no penalty at all. **Tribunal's Findings** The ITAT allowed the appeal and deleted the penalty, relying on the coordinate bench decision in *Hiro Mulchand Tanwani v. ITO* (ITA No. 110/Ahd/2026), and held as follows: - **Distinction between under-reporting and misreporting:** Section 270A(9) enumerates specific circumstances that constitute "misreporting" — such as misrepresentation, suppression of facts, fabricated entries, or claims unsubstantiated by evidence. A disallowed claim does not automatically fall into this category merely because the deduction is later found inadmissible. - **Burden on Revenue:** Unless the Department demonstrates with cogent evidence that the claim was knowingly bogus and made on the basis of false particulars, the higher penalty for misreporting cannot be sustained. - **Penalty proceedings are independent:** Findings in assessment proceedings are not automatically conclusive for penalty purposes; each must be independently established. - **Immunity under Section 270AA:** Since the assessee voluntarily withdrew the claim upon receiving the Section 148 notice, paid tax along with interest, and no variation was made to the returned income in reassessment, the substantive conditions under Section 270AA(1) for immunity from penalty stood satisfied. ## Conclusion This decision reaffirms that a disallowed claim, by itself, does not amount to "misreporting" under Section 270A unless the Revenue establishes deliberate falsification. Taxpayers who transparently disclose a claim and voluntarily withdraw it on being questioned — with tax and interest duly paid and no resulting addition to income — stand on strong footing to seek penalty relief or immunity under Section 270AA. Read the order here - --- *Disclaimer: This article is for general informational purposes and does not constitute professional advice. Please consult our team for guidance specific to your case.* - Tags: - [\#incometax #litigation #section80GGC #section 270A #penaltyproceedings](#) ![CA Divyang J Shah](https://imageproxy.inlancer.in/pr:sharp/f:webp/rs:fit:200:0/g:sm/plain/https://bnpsca.com/public/assets/upload/images/original/6872083e9ad46-10.png)About the Author #### CA Divyang J Shah Ahmedabad Income tax Assessment & Appeals Public trust, Private Trust [View Profile ](https://bnpsca.com/partner/ca-divyang-j-shah) #### Share this on social media : [ Share ](http://www.facebook.com/sharer.php?u=https://bnpsca.com/insight/no-penalty-u-s-270a-for-80ggc-claim-withdrawn-voluntarily) [ Tweet ](https://twitter.com/intent/tweet?url=https://bnpsca.com/insight/no-penalty-u-s-270a-for-80ggc-claim-withdrawn-voluntarily) [ Post ](https://vk.com/share.php?url=https://bnpsca.com/insight/no-penalty-u-s-270a-for-80ggc-claim-withdrawn-voluntarily) [ post ](https://www.linkedin.com/shareArticle?mini=true&url=https://bnpsca.com/insight/no-penalty-u-s-270a-for-80ggc-claim-withdrawn-voluntarily) [ Share ](https://api.whatsapp.com/send?text=https://bnpsca.com/insight/no-penalty-u-s-270a-for-80ggc-claim-withdrawn-voluntarily) [ post ](https://reddit.com/submit?url=https://bnpsca.com/insight/no-penalty-u-s-270a-for-80ggc-claim-withdrawn-voluntarily) [ pin ](https://pinterest.com/pin/create/button/?url=https://bnpsca.com/insight/no-penalty-u-s-270a-for-80ggc-claim-withdrawn-voluntarily) ## You May Also Like Similar Articles You Might Find Interesting [ ![TDS/TCS changes from 1st October 2024](https://imageproxy.inlancer.in/pr:sharp/f:webp/rs:fit:500:0/g:sm/plain/https://bnpsca.com/public/assets/upload/images/original/688064a0140c2-466852974.jpeg) ](https://bnpsca.com/insight/tds-tcs-changes-from-1st-october-2024 "Blog Link")06-10-2024 #### [TDS/TCS changes from 1st October 2024](https://bnpsca.com/insight/tds-tcs-changes-from-1st-october-2024 "TDS/TCS changes from 1st October 2024") By nareshco [Continue Reading](https://bnpsca.com/insight/tds-tcs-changes-from-1st-october-2024) [ ![New-Income Tax Bill 2025 – Simplification ~Consolidation ~ Clarity](https://imageproxy.inlancer.in/pr:sharp/f:webp/rs:fit:500:0/g:sm/plain/https://bnpsca.com/public/assets/upload/images/original/68886745de300-image-income-tax-bil.png) ](https://bnpsca.com/insight/new-income-tax-bill-2025-%E2%80%93-simplification-consolidation-clarity "Blog Link")14-02-2025 #### [New-Income Tax Bill 2025 – Simplification ~Consolidation ~ Clarity](https://bnpsca.com/insight/new-income-tax-bill-2025-%E2%80%93-simplification-consolidation-clarity "New-Income Tax Bill 2025 – Simplification ~Consolidation ~ Clarity") By CA. 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