Penalty u/s 271(1)(c) not imposable for application of section 50C of Income Tax Act

Shailendra Vs ITO (ITAT Delhi)

ITAT Delhi held that penalty under section 271(1)(c) of the Income Tax Act cannot be imposed on the basis of legal fiction of section 50C of the Income Tax Act.

Facts- The present appeal filed by the assessee for the assessment year 2009- 10 is directed against the order of Ld. CIT(A), Meerut dated 03.05.2018. The assessee has mainly raised the ground that no penalty U/s 271 (1)(c) can be imposed to assess the capital gain as per the provisions of section 50C/2(14) of the IT Act and CIT(A) is in error to confirm the same.

Conclusion- Held that penalty cannot be imposed on the basis of legal fiction of section 50C of the Act. He therefore, directed to work out the concealed capital gain in accordance with the sale value of the I do not see any infirmity into the direction of Ld.CIT(A). It would be open before the AO even to decide whether the land in question was a capital asset or not. Therefore, grounds raised by the assessee are rejected.

FULL TEXT OF THE ORDER OF ITAT DELHI

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