Mohd Kasim Khilji Vs ITO (ITAT Jaipur)
The ITAT Jaipur considered an appeal against the order of the National Faceless Appeal Centre (NFAC) dated 11.10.2025 confirming the levy of penalty under Section 271(1)(c) of the Income-tax Act, 1961. The penalty related to Long Term Capital Gain (LTCG) of ₹8,60,275, which had not been disclosed in the original return filed under Section 139 but was subsequently disclosed through a revised computation during reassessment proceedings initiated under Section 147.
In response to a notice issued under Section 148, the assessee filed a return along with a revised computation disclosing the LTCG of ₹8,60,275. The reassessment under Section 147 accepted the income returned by the assessee. However, the Assessing Officer levied a penalty under Section 271(1)(c) on the ground that the LTCG had been disclosed only during the reassessment proceedings. The penalty amounted to ₹1,79,036, being the tax sought to be evaded.
The Tribunal disagreed with the orders of the lower authorities. It observed that it was not the Revenue’s case that the assessee disclosed the LTCG only after being cornered. The Tribunal noted that the assessee voluntarily declared the LTCG in the revised computation filed in response to the notice under Section 148 and did so before becoming aware of the reasons for reopening the assessment.
