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 filing return & during assessment, there existed divergent judicial views, including earlier Calcutta High Court decisions in Shreyasi Ganguli & Bhagawati Prasad Agarwal granting exemption on identical facts. Where two views are possible & Assessee had disclosed all primary facts, denial of exemption by a later judgment does not ipso facto attract penalty. Reiterating that penalty proceedings are independent & not automatic on confirmation of addition, ITAT deleted the penalty in full. Appeal allowed.
FULL TEXT OF THE ORDER OF ITAT KOLKATA
These two appeals filed by the assessee against the separate orders of the ld. CIT(A), National Faceless Appeal Centre (NFAC), Delhi, both dated 25.12.2024 for the assessment year 2015-2016 against the confirmation of penalty levied u/s.270(1)(c) of the Act.
