DHUNJI FRAMROZE TITINA,MUMBAI vs. ITO 5 (1)(1), MUMBAI

आदेश/ ORDER

PER VIKAS AWASTHY, JM:

This appeal by the assessee is directed against the order of Commissioner of Income-Tax (Appeals)-10, Mumbai [in short ‘the CIT(A)’] dated 21.12.2017 for the Assessment Year 2009-10, confirming levy of penalty under section 271(1)(c) of the Income Tax Act, 1961 [hereinafter referred to as ‘the Act’].

2. Shri Girish Dave appearing on behalf of the assessee submitted, that in regular assessment proceedings under section 143(3), the income returned by assessee was accepted without any addition vide order dated 14.11.2011. The assessee in return of income had claimed Short Term Capital Loss (STCL) which was accepted by the Assessing Officer. Subsequently, the assessment was re- opened under section 147 r.w.sec. 148 to disallow assessee’s claim of carry forward of STCL to following Assessment Years. Penalty under section 271(1)(c) of the Act was initiated for claiming carry forward of STCL. The ld. AR pointed that even in the re-assessment proceedings, the returned income was accepted without making any addition/disallowance vide order dated 03.09.2014. The Assessing Officer vide order dated 12.03.2015 levied penalty under section 271(1)(c) in respect of assessee’s claim of carry forward of loss in the original return of income. The ld. AR pointed that though in the return of income the assessee has claimed carry forward of loss, however, in the subsequent Assessment Years the claim was withdrawn. This fact was pointed to the assessee in re-assessment proceedings and even in the penalty proceedings. The ld. AR submitted that the assessee is a NRI. In reply to show-cause notice, the assessee has submitted that inadvertently claim of carry forward of losses was not corrected in the return. In any case there was no affect on the income declared as the taxes were paid on the declared income. Even in subsequent 2

ITA 2879 Mum 2018-Shri Dhunji Framroze Titina Assessment Year the assessee had made no claim of carry forward of losses. The mistake of claiming carry forward of loss in the return for the impugned Assessment Year was an inadvertent bonafide mistake and hence, no penalty should have been levied for making such claim. The ld. AR in support of his submissions placed reliance on the following decisions: