Case Law Details
Kannappan Vijayalakshmi Vs ITO (ITAT Chennai)
The recent judgment by the ITAT Chennai in the case of Kannappan Vijayalakshmi vs ITO offers insightful perspectives on the levy of penalties under section 270A(9)(a) of the Act. The case revolved around the levy of a penalty under section 270A for an amount of Rs. 4.12 Lacs for the Assessment Year 2016-17. The penalty was confirmed by the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi, leading the assessee to further appeal.
The Core Dispute: The core contention was related to the computation of Long Term Capital Gains (LTCG) by the assessee. After the demise of her husband in 2009, the property, initially purchased by him, was registered in the name of Kannappan Vijayalakshmi. When computing LTCG, she claimed a deduction of Rs. 5 Lacs each for her son and daughter, which was disputed by the Assessing Officer (AO). The AO contested that since the property was registered in the assessee’s name, the sale considerations couldn’t be split. Therefore, a deduction of Rs. 10 Lacs was denied.
Penalty Proceedings: During the penalty proceedings, the assessee emphasized her compliance with the Hindu Succession Act, asserting that the amount belonging to her son and daughter was due to their inheritance. The AO, however, held the assessee accountable for a default under section 270A(9)(a), which addresses the misreporting of income. This led to the imposition of a penalty of Rs. 4.12 Lacs.
ITAT Chennai’s Analysis: Upon detailed scrutiny, ITAT Chennai established several undisputed facts:
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