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TMI Blog2025 (2) TMI 42X X X X Extracts X X X X X X X X Extracts X X X X ..... s of appeal: "1. On the facts and in circumstances of the case and in law, order passed by the Hon'ble CIT(A) u/s. 250 of the Act, without considering the materials on records and submissions made during the penalty proceedings u/s. 271(1)(c) of the Act is bad in law. 2. On facts and circumstances of the case and in law, the Hon'ble CIT(A) has erred in upholding the penalty u/s 271(1)(c) of the Act imposed by the Income Tax Officer, National Faceless Assessment Centre, Delhi amounting to Rs. 64,857/- without considering the submission of the appellant. 3. Your appellant prays for leave to add, alter and/or amend / withdraw any and/or all the grounds of appeal adduced above. 3. The brief facts of the case are that during the cours ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he AO before passing the order u/s 271(1)(c) of the Act. As such, this contention of the appellant does not save her from the rigors of penalty u/s 271(1)(c) of the Act. (ii) As to the payment made by the appellant to buy peace of mind, reliance is placed on decision of Hon. Supreme Court of India in the case of MAKDATA Pvt. Ltd. Vs CIT-II, Vadodra [2013] reported in 38 taxmann.Com 448(SC), who vide its order in para 7 held as under:- 7. AO in our view, shall not be carried away by the plea of the assessee like 'voluntary disclosure', buy peace', 'avoid litigation', 'amicable settlement, etc to explain away its conduct. The question is whether the assessee has offered any explanation for concealment of particular ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... options" segment were eligible for set-off against "short term capital gains" amounting to Rs. 5,90,935/- However, the AO did not set-off the same despite the fact that such losses in "futures and options" were eligible for set-off against "short term capital gains", However, this specific request of the assessee was ignored by the AO, while passing the Assessment Order. However, owing to the smallness of the quantum of tax involved, in order to buy a peace of mind, the assessee decided not to litigate the matter further. However, in so far as penalty is concerned, it was submitted that such set-off of losses in the "futures and options" segment is eligible for set-off against capital gains in terms of section 71(2) of the Act. Further wit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he head "Salaries", the assessee shall not be entitled to have such loss set off against such income.]" 9. We observe that from a bare reading of section 71(2) of the Act, it is evident that losses from "future and options" trading were eligible for set-off against "short term capital gains" from sale of securities. Therefore, as per the provisions of section 71(2) of the Act, the assessee was not required to pay taxes on such "short term capital gains". However, despite this, the AO did not consider the arguments taken during the course of penalty proceedings. In our considered view, on plain reading of section 271(1)(c) of the Act, the assessee is eligible to set-off losses incurred in the "futures and options" segment of Rs. 4,07,195/- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... roceedings as well as order levying penalty u/s. 271(1)(c) of the Act on assessee, we observe that the AO has not given clear cut classification as to whether the penalty has been levied for "concealment of income" or "furnishing inaccurate particulars of income". It is a well settled principle that the AO has to give an absolute and categorical findings while levying the penalty u/s. 271(1)(c) of the Act, whether the same is being levied for "concealment of income" or "furnishing inaccurate particulars of income". Reference is made to various judicial precedents which are as follows: 12.1 In the case of Principal Commissioner of Income-tax vs. Shyam Sunder Jindal [2024] 164 taxmann.com 503 (SC)/[2024] 300 Taxman 90 (SC)[15-07-2024] Hon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ismissed. 12.3 In the case of Principal Commissioner of Income-tax (Central) vs. Goa Coastal Resorts and Recreation (P.) Ltd. [2021] 130 taxmann.com 379 (SC)/[2021] 282 Taxman 463 (SC)[31-08- 2021] he Hon'ble Supreme Court dismissed SLP against High Court's ruling that where there was no record of satisfaction by Assessing Officer in relation to any concealment of income or furnishing of inaccurate particulars by assessee in notice issued for initiation of penalty proceedings under section 271(1)(c), same being sine qua non for initiation of such proceedings, Tribunal had rightly ordered to drop penalty proceedings. 13. Accordingly, in view of the above decisions, we are of the considered view that in the absence of specific findi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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