Bona fide deduction claim cannot by itself justify section 270A penalty when earlier years accepted the same facts.

Penalty under section 270A was held unsustainable where the assessee claimed deduction under section 80IB(10) on facts previously accepted in earlier years. The disallowance arose only because the Assessing Officer found certain eligibility conditions unmet for the year in question; that dispute on deductibility did not, by itself, establish under-reporting, concealment, or false disclosure. As the claim was made on a bona fide and genuine belief without any indication of intent to conceal income, the penalty was deleted in favour of the assessee.

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Issues: Whether penalty under section 270A of the Income-tax Act, 1961 was leviable when the assessee claimed deduction under section 80IB(10) on the basis that the same deduction had been allowed in earlier years and the claim was made under a bona fide belief.

Analysis: The assessee's claim was made in the context of a deduction that had been accepted in earlier years on the same set of facts. The disallowance for the year under consideration arose from the Assessing Officer's view that certain conditions for deduction were not fulfilled. On these facts, the addition represented a dispute on allowability of deduction and did not, by itself, establish under-reporting or misrepresentation of facts. The circumstances did not show an intention to conceal income or make a false disclosure, and the claim was treated as one made under an honest and genuine belief.

Conclusion: Penalty under section 270A was not sustainable and was deleted, in favour of the assessee.

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