Debatable Claim Cannot Trigger Penalty: ITAT Quashes 271(1)(c) for Denied LTCG Exemption

Bijaya Tah Vs ITO (ITAT Kolkata) Penalty Can’t Survive Where Law Was Debatable: denial of exemption by a later judgment does not ipso facto attract penalty- ITAT Deletes 271(1)(c) Penalty on Denied LTCG Exemption Assessee had claimed exemption u/s 10(38) on LTCG arising from sale of shares of Kailash Auto Group amounting to ₹35.05 lakh. Though ITAT initially allowed the claim, the jurisdictional High Court later reversed the Tribunal’s view & restored the quantum addition, following which penalty u/s 271(1)(c) was levied &  confirmed by CIT(A). Tribunal held that at the time of ...