Case Law Details
Sanchit Vinod Jain Vs National Faceless Assessment Centre (ITAT Mumbai)
Sanchit Vinod Jain filed an appeal against the order that confirmed the AO’s (Assessing Officer) decision to impose a penalty under section 271(1)(c) of the Income Tax Act, 1961. This penalty, amounting to Rs.11,088, arose due to discrepancies between the assesse’s reported income and the assessed value.
Transaction Scrutiny: The AO observed an investment in the penny stock scrip of M/s Sun Asian during assessment proceedings. Upon further examination, a transaction was detected where the assessee sold 2800 shares of M/s Sun Asian, resulting in a total transaction value of Rs.13,60,884. The assessee clarified this transaction by stating that even though a LTCG of Rs.12,90,844 was earned, they had offered a higher amount (Rs.13,25,000) as per the IDS. However, the AO identified that the full sale amount wasn’t covered under the IDS, thus treating the entire sale proceeds as bogus.
Assessee’s Standpoint: The assessee contested the AO’s claim by arguing that they had genuinely disclosed the LTCG from the penny stock sale under the IDS. They pointed out that the AO only added the difference of Rs.35,884 to the assessed income, which was the discrepancy between the total sale proceeds and the amount disclosed under the IDS.
ITAT Mumbai’s Verdict: Upon evaluating the presented facts, the ITAT Mumbai highlighted that the assessee had rightfully declared the LTCG in their income return. Furthermore, they acknowledged the disclosure of the LTCG under the IDS scheme, which exceeded the actual amount. Given this voluntary disclosure, the tribunal found no reason to charge the assessee with the concealment of material particulars. Consequently, the penalty levied against the assessee, amounting to Rs.35,884, was ruled as untenable.
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