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| The Tax Publishers2020 TaxPub(DT) 4124 (Guj-HC) INCOME TAX ACT, 1961
Section 260A
Incidence of penalty under section 271(1)(c) is not automatic and should not be imposed merely because it is lawful to do and considering the smallness of amount involved, it would be expedient to give benefit of doubt to the assessee owing to mitigating circumstances, since assessee had supported the face value of transactions with bills and payments, therefore, it was difficult to hold that the explanation offered by assessee was blatantly false and no substantial question of law.
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Appeal (High Court) - Penalty under section 271(1)(c) - Bogus LTCG claim of assessee on transaction in penny stocks -
The substantial question of law raised by Revenue before this court as to whether Tribunal was correct in law and on facts in deleting the penalty levied under section 27(1)(c) on bogus LTCG claim of the assessee on transaction in penny stocks of a Group concern of accommodation entry providers. Held: Incidence of penalty under section 271(1)(c) is not automatic and should not be imposed merely because it is lawful to do. Considering the smallness of the amount involved, it would be expedient to give benefit of doubt to the assessee owing to mitigating circumstances viz; the absence of copy of statement of owner of the said group concern or any other substantive material. Assessee had supported the face value of transactions with bills and payments. In the backdrop of ambiguity in circumstances, it was difficult to hold that the explanation offered by assessee was blatantly false. Therefore, penalty was deleted and no substantial question of law.
REFERRED :
FAVOUR : In assessee's favour
A.Y. :
IN THE GUJARAT HIGH COURT
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