Misreporting penalty under section 270A cannot stand where a disclosed deduction claim is disallowed without proof of concealment.

A penalty under section 270A for misreporting income was held unsustainable where the assessee had transparently disclosed a deduction claim under section 80GGC and the disallowance arose only because the donation was treated as ineligible or not genuine. Non-challenge to the quantum addition did not, by itself, establish concealment, false particulars, or deliberate misrepresentation. In the absence of material showing suppression of facts, fabricated documents, or other indicia of misreporting, the enhanced penalty could not stand, and the penalty was deleted.

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Issues: Whether penalty under section 270A of the Income-tax Act, 1961 could be sustained on the footing that the assessee had misreported income by claiming deduction under section 80GGC, when the quantum addition was not appealed and the deduction was disallowed in reassessment.

Analysis: The penalty under section 270A was examined in the context of the distinction between under-reporting and misreporting of income. The deduction claimed under section 80GGC had been transparently disclosed in the return, and the disallowance arose from the Assessing Officer's view that the donation was not genuine or otherwise eligible. Mere non-challenge to the quantum addition was held not to amount to an admission of concealment or false particulars. In the absence of material showing suppression of facts, false evidence, fabricated documents, or deliberate misrepresentation, the enhanced penalty for misreporting could not be justified.

Conclusion: Penalty for misreporting under section 270A was not sustainable, and the penalty of Rs. 93,600 was deleted in favour of the assessee.

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