Ahmedabad ITAT waives ₹2.31 lakh income-tax penalty

The Income Tax Appellate Tribunal (ITAT) in Ahmedabad has waived a ₹2.31 lakh penalty imposed on a taxpayer regarding a ₹3.71 lakh political donation deduction. The taxpayer, Niket Maheshbhai Shah, had claimed the deduction under Section 80GGC of the Income-tax Act for a donation made to the Manav Adhikar National Party through recognized banking channels.

The tax department had originally disallowed the deduction and imposed a penalty, treating the case as under-reporting or misreporting of income. However, the tribunal ruled that the tax department failed to establish a clear basis for the penalty, noting that the mere disallowance of a deduction does not automatically constitute misreporting of income.