Levy of penalty u/s 271(1)(c)

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

21 September 2013 While filing the Income tax return, due to different opinions received on the taxability of loss on Commodity trading through exchange, the same was claimed as a loss and adjusted with the business income of the assessee. However to play safe and insulate myself from interest etc, in case if the same is selected for scrutiny and disallowed the advance tax, etc was paid on the business income without considering the loss.

The case was selected for scrutiny, the ITO disallowed the loss claim saying that the loss has no connection with the normal business. I did not go in appeal on the disallowance to avoid unneccesay litigation and expenses. But the ITO levied penalty saying that you have concealed income U/S 271. Thus inspite of paying taxes on the income, a demand has arised due to levy of peanlty.

My query is whether the penalty can be appealed and chances of getting the releif, if so, can any of the experts give reference of any case laws/ judgement etc, favouring the assessee's appeal that can be quoted.

I will be very much obliged, if any information can be given in this matter

Nikhil Kaushik

Nikhil Kaushik (Expert)
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21 September 2013 Yes. You can contest the levy of penalty. The penalty proceedings are separate from the main assessment and you have every right to contest if you feel aggrieved.

There must be numerous cases that you can:

174 Taxman 507

96 TTJ 508

272 ITR 323

97 TTJ 139

296 ITR 193

270 ITR 156 (this case law should squarely apply to the factum of ur case.

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Querist : Anonymous

Querist : Anonymous (Querist)

21 September 2013 Thanks for a very quick response

Querist : Anonymous

Querist : Anonymous (Querist)

30 December 2014 Please refer to your reply above citing several judgement. Can you please let me know where can I get the copy of the cases referred by you. Thanks and Best Regards, Meanwhile WISH YOU ALL A VERY HAPPY NEW YEAR ALSO