Penalty No penalty should be levied on the basis of deeming provision under section 50C(1)

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The Tax Publishers Income Tax--Penalty No penalty should be levied on the basis of deeming provision under section 50C(1) Akhilesh Kumar Sah The Karnataka High Court in S. Chandrashekar v. ACIT [(2021) 432 ITR 330 Karn] has observed that it is a settled rule of statutory interpretation with regard to taxing statute that a taxpayer cannot be taxed without clear words for that purpose, and every Act of the Parliament has to be read as per its natural construction of words. Penalty under section 271(1)(c) of the Income Tax Act, 1961 (for short, 'the Act') is being imposed in many cases these days in case of difference between actual sale consideration and circle value of the property. The penalty should not be imposed as section 50C is a deeming provision of the Act. Similar should be the case in the new section 270A of the Act. 1. Introduction In Bankimbhai Natverbhai Patel v. ITO [ITA No 45/Ahd/2022 (AY: 2015-16)] decided on 13-12-2023 by ITAT, Ahmedabad, appeal was filed by assessee against the order passed by the CIT (A), National Faceless Appeal Centre, Delhi (for short, 'NFAC'). One of the ground raised by assessee in appeal was that CIT(A) erred in law and on facts of the case in confirming the order of the Assessing Officer (for short 'AO') of levying penalty under section 271(1)(c) of the Act. SUBSCRIBE FOR FULL CONTENT

The Tax Publishers

Income Tax--Penalty

No penalty should be levied on the basis of deeming provision under section 50C(1)

Akhilesh Kumar Sah

The Karnataka High Court in S. Chandrashekar v. ACIT [(2021) 432 ITR 330 Karn] has observed that it is a settled rule of statutory interpretation with regard to taxing statute that a taxpayer cannot be taxed without clear words for that purpose, and every Act of the Parliament has to be read as per its natural construction of words.

Penalty under section 271(1)(c) of the Income Tax Act, 1961 (for short, 'the Act') is being imposed in many cases these days in case of difference between actual sale consideration and circle value of the property. The penalty should not be imposed as section 50C is a deeming provision of the Act. Similar should be the case in the new section 270A of the Act.

1. Introduction

In Bankimbhai Natverbhai Patel v. ITO [ITA No 45/Ahd/2022 (AY: 2015-16)] decided on 13-12-2023 by ITAT, Ahmedabad, appeal was filed by assessee against the order passed by the CIT (A), National Faceless Appeal Centre, Delhi (for short, 'NFAC'). One of the ground raised by assessee in appeal was that CIT(A) erred in law and on facts of the case in confirming the order of the Assessing Officer (for short 'AO') of levying penalty under section 271(1)(c) of the Act.