VADIVELU JANAKARAJ,CHENNAI vs. ACIT, NON CORP CIRCLE - 20 (1), CHENNAI

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ITA 1100/CHNY/2022Status: DisposedITAT Chennai23 January 2023AY 2013-143 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that penalty under Section 271(1)(c) is not leviable as the income was already declared in the return of income and the assessee had not earned any real income, resulting in an overall loss.

What were the facts?

The assessee declared speculative income from commodity derivatives trading in its return of income. The Assessing Officer initiated penalty proceedings under Section 271(1)(c) for concealment of income, which was confirmed by the CIT(A).

What were the issues?

Whether penalty for concealment of income is leviable when the income was already declared in the return and there was no real income earned by the assessee.

Which sections of the Income-tax Act were involved?

Section 271(1)(c)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, ‘B’ BENCH, CHENNAI

Before: HON’BLE SHRI V. DURGA RAO & HON’BLE SHRI MANOJ KUMAR AGGARWAL, AM

Heard together (2 matters)

ITA No.1099/Chny/2022
ITA No.1100/Chny/2022

Read from the judgment's own cause title. This page is filed under one of them.

आदेश / O R D E R Manoj Kumar Aggarwal (Accountant Member) 1. Aggrieved by confirmation of certain penalty u/s 271(1)(c) for captioned assessment years (AY), the assessee is in further appeal before us. The facts in both the years are identical. The appeal for Assessment Year (AY) 2012-13 arises out of order passed by learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi [CIT(A)] on 28-10-2022 in the matter of penalty & 1100/Chny/2022 - 2 - levied by Ld. Assessing Officer [AO] vide order dated 01.01.2022. The orders for AY 2013-14 are on same lines. Having heard rival submission, the appeals are disposed-off as under.

2.

In AY 2012-13, an assessment was framed u/s 143(3) r.w.s. 147 on 24.09.2019 making additions of Rs.2.58 Lacs on account of speculative income from trading in commodity derivatives. The said income was already admitted in the return of income filed by the assessee. Consequently, penalty proceedings were initiated u/s 271(1)(c) for concealment of income. The assessee, inter-alia, defended its stand on the ground that it did not really earned any real income and the total investments were ultimately lost. Only to buy peace, the assessee returned the income in two years and claimed the loss in third year. However, Ld. AO imposed penalty of Rs.0.79 Lacs on the ground that if the case had not been reopened, the income would have not been taxed in the hands of the assessee. The ld. CIT(A) confirmed the penalty against which the assessee is in further appeal before us. The penalty of Rs.0.77 Lacs was levied as well as confirmed for AY 2013-14 on similar lines.

3.

Upon perusal of facts, it emerges that the assessee has already declared the income in the return of income and the same has been accepted. The concealment of income has to be in the return of income filed by the assessee. Secondly, the assessee has not earned any real income and overall there is a loss for the assessee. Considering these facts, it is not a fit case for levy of penalty. By deleting the same, we allow the appeals for both the years. & 1100/Chny/2022 - 3 -

4.

Both the appeal stands allowed.

Order pronounced on 23rd January, 2023.

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