KIRTI MILIND RANKA,PUNE V. INCOME TAX OFFICER, PUNE

ITA 2176/PUN/2025

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The case involves Kirti Milind Ranka, the appellant, who appealed against the penalty imposed by the Income Tax Officer (ITO) for claiming an excess speculation loss in the revised income tax return for the Assessment Year 2016-17. Initially, the assessee reported separate losses in the original return, which were later consolidated under one head in the revised return due to an error by the tax consultant. The ITO treated this as furnishing inaccurate particulars of income, leading to a penalty. The Commissioner of Income Tax (Appeals) dismissed the appeal as barred by limitation, prompting the assessee to approach the Tribunal. The Tribunal, after considering the circumstances, concluded that the error was clerical and not intentional, thus setting aside the penalty.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 788604 (ITAT-PUNE)
• Duration Of Justice: 2 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-11-2025
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: misc
• Appeal Filed On: 22-09-2025
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: MILIND DEBAJE; VIRTUAL
• Assessee Lawyers: PAWAN JAIN
• Keywords: Set aside; Speculation loss; Revised return
• Section: 271(1)(c)

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL PUNE “SMC” BENCH : PUNE BEFORE SHRI MANISH BORAD, ACCOUNTANT MEMBER & SHRI VINAY BHAMORE, JUDICIAL MEMBER I.T.A.No.2176/PUN/2025 (Assessment Year 2016-2017) Kirti Milind Ranka, C-303, Leela Garden, Road No.10, Kalyani Nagar, Pune-411006 PAN : BTSPR 3309 H vs. ITO, Ward-7(2), Pune (Appellant) (Respondent) For Assessee : Shri Pawan Jain, CA For Revenue : Shri Milind Debaje, JCIT (virtual) Date of Hearing : 19.11.2025 Date of Pronouncement : 26.11.2025 ORDER PER : MANISH BORAD, AM This appeal at the instance of the assessee is directed against the order of National Faceless Appeal Centre (NFAC)/ Commissioner of Income Tax (Appeals), Delhi [“CIT(A)”], dated 25/08/2025 passed under section 250 of the Income Tax Act, 1961 (“Act”), which is arising out of penalty order u/s. 271(1)(c) of the Act, dated 16/03/2022 for the Assessment Year (AY) 2016-17. Printed from counselvise.com 2 ITA.No.2176/PUN./2024 (Kirti Milind Ranka) 2. The sole grievance of the assessee relating to levy of penalty u/s. 271(1)(c) of the Act at Rs. 8,51,835/-. 3. Brief facts of the case are that the assessee is in individual and e-filed return of income for A.Y. 2016-17 on 29/07/2016 declaring total income of Rs. 5,15,710/-. In the original return, the assessee reported speculation loss at Rs.81,21,392/- and short term capital loss at Rs. 33,25,597/-. Subsequently, upon advice from the CPC assessee got the accounts audited, as turnover has exceeded Rs. 1.00 crore. The revised return was filed by the Tax Consultant, who consolidated both types of losses and shown them as speculation loss at Rs.1,14,61,428/-. In the scrutiny proceedings carried out u/s.143(3) of the Act after duly serving valid notices, Ld.AO accepted the returned income. However, Ld.AO initiated penalty proceedings u/s. 271(1)(c) of the Act for excess claim of speculation loss of Rs. 33,40,036/-. Subsequently, penalty proceedings were initiated by issuing notice u/s. 274 of the Act and finally, penalty order framed on 16/03/2022 levying penalty of Rs. 8,51,835/- on account of furnishing inaccurate particulars of income under the head „speculation loss‟ to the extent of Rs. 33,40,036/-. 4. Aggrieved, assessee challenged the penalty order before the Ld.CIT(A), but Ld.CIT(A) without dealing with the case on Printed from counselvise.com 3 ITA.No.2176/PUN./2024 (Kirti Milind Ranka) merits, dismissed the appeal being barred by limitation. Now, the assessee is in appeal before this Tribunal. 5. Learned counsel for the assessee raised two fold arguments, firstly challenging the validity of the penalty order being barred by limitation, and secondly on merits, he contended that due to inadvertent mistake of the Tax Consultant, the wrong figures have been punched in the return and there is no malafide intention of the assessee to claim excess speculation loss. 6. On the other hand, ld. Ld. Departmental Representative (DR) supported the orders of both the lower authorities. 7. We have heard rival contentions and perused the records placed before us. So far as legal issue raised by the learned counsel for the assessee challenging the validity of penalty order being barred by limitation, he requested for not pressing this legal ground and therefore same is dismissed as not pressed. 8. So far as merits of the case are concerned, we find that the assessee during the year, has incurred two types of losses, namely speculation loss of Rs. 81,21,392/- and short term capital loss of Rs. 33,25,597/-. These two losses were separately shown in the original return and all the particulars pertaining thereto were furnished in the income tax return. Subsequently, on receiving notice from CPC, the assessee got Printed from counselvise.com 4 ITA.No.2176/PUN./2024 (Kirti Milind Ranka) its books of accounts audited and again prepared a revised return. While filling the details of losses, the person who was given responsibility for filing the return, both the types of losses have been shown under one head i.e. „speculation loss and short term capital loss‟ at Rs. 1,14,61,428/-. Thus, there occurred a mismatch between the original return and revised return and gave rise to issue of excess claim of speculation loss of Rs. 33,40,036/-, which came to the attention of Ld.AO and he/she treated it as furnishing of inaccurate particulars of income and thereafter has levied penalty. 9. We on going through the records, find that the assessee has furnished particulars of losses under the heads „speculation loss‟ and „short term capital loss‟ in the original return, but due to inadvertent mistake at the end of the Tax Consultant, the consolidated figure has been shown under the head „speculation loss‟. It is not a case of malafide intention of the assessee on furnishing inaccurate particulars of income to evade taxes. There is a complete absence of mens rea of evading taxes. Under these given facts and circumstances, we are of the view that section 271(1)(c) of the Act should not have been invoked by Ld.AO and should have sympathetically considered the facts giving rise to such clerical mistake and claim of wrong speculation loss. We, accordingly, set aside the impugned order and delete the penalty levied u/s.271(1)(c) of Printed from counselvise.com 5 ITA.No.2176/PUN./2024 (Kirti Milind Ranka) the Act at Rs. 8,51,835/- and allow the grounds of appeal raised by the assessee on merits. 10. In the result, appeal of the Assessee is partly allowed as per terms indicated herein above. Order pronounced in the open Court on 26.11.2025. Sd/- Sd/- [VINAY BHAMORE] [MANISH BORAD] JUDICIAL MEMBER ACCOUNTANT MEMBER Pune, Dated 26th November, 2025 vr/- Copy to 1. The appellant 2. The respondent 3. The CIT(A), Pune concerned. 4. D.R. ITAT, “SMC” Bench, Pune. 5. Guard File. By Order //True Copy // Assistant Registrar, ITAT, Pune. Printed from counselvise.com "