Sunil Kumar Somani Vs ACIT (ITAT Kolkata)
The ITAT Kolkata reviewed the case of Sunil Kumar Somani vs. ACIT, where the Assessing Officer (AO) disallowed a short-term capital loss (STCL) adjustment of ₹5,53,954 claimed by the assessee for AY 2015-16. The AO found that the loss had already been adjusted in the previous assessment year (2014-15). Upon being informed, the assessee admitted the error and argued that it was inadvertent, not intentional. Despite this, the AO imposed a penalty under Section 271(1)(c) of the Income Tax Act, alleging that the claim was unjustified. The penalty was later upheld by the Commissioner of Income Tax (Appeals) [CIT(A)].
On appeal, the Tribunal examined the evidence and found that the AO’s discovery of the excessive loss claim was based solely on records from the preceding year. There was no independent evidence suggesting an intentional attempt to suppress taxable income. While the Tribunal upheld the AO’s disallowance of the STCL adjustment and the associated tax and interest, it ruled that the penalty lacked justification. The Tribunal emphasized that mistakes arising from oversight, without evidence of malintent, do not warrant penalties under Section 271(1)(c). Accordingly, the penalty was deleted, and the appeal was allowed in favor of the assessee.
