MONEEKA MALHOTRA,NEW DELHI vs. A O, DELHI

This assessee’s appeal for assessment year 2012-13, arises against the Commissioner of Income Tax (Appeals)/National Faceless Appeal Centre [in short, the “CIT(A)/NFAC”], Delhi’s DIN and order no. ITBA/NFAC/S/250/2023-24/1063592683(1), dated 29.03.2024 involving proceedings under section 271(1)(c) of the Income-tax Act, 1961 (hereinafter referred to as ‘the Act’).

Heard both the parties. Case file perused.

It emerges at the outset that both the learned lower authorities have levied the impugned section 271(1)(c) penalty of Rs.87,516/- in Assessing Authority’s order passed on 16th March, 2022 and upheld in the lower appellate discussion. Thereby, admittedly held the assessee to have furnished inaccurate particulars of her taxable income relating to the alleged bogus long- term capital gains derived from sale of shares amounting to Rs.7,83,000/- which stood declared during the course of scrutiny at her behest.

Faced with this situation, the Revenue vehemently argues that the impugned penalty in such an instance of bogus long-term capital gains indeed deserves to be upheld. We find no merit in the Revenue’s stand in support of the impugned penalty for the precise reason that the above quantum issue of bogus long-term capital gains is a highly debatable one involving subjective appreciation of the relevant facts which does not automatically attract section 271(1)(c) penalty going by CIT Vs. Reliance Petro Products (2010) 322 ITR 158 (SC). We accordingly accept the assessee’s instant sole