SYNERGY ART FOUNDATION LTD ,MUMBAI V. DCIT, CIRCLE 8(2)(1), MUMBAI

ITA 6598/MUM/2025

AI Insights

The case involves M/s. Synergy Art Foundation Ltd., which appealed against the penalty imposed by the National Faceless Appeal Centre (NFAC) for the assessment year 2012-13. The penalty was imposed following the withdrawal of a capital loss claim of Rs.26,06,892 related to the closure of Yatra Art Funds, which the Assessing Officer (A.O.) added back to the income. The Tribunal concluded that since the assessee did not derive any benefit from the loss carry forward, the penalty for concealment of income and furnishing inaccurate particulars was unwarranted.

• Counselvise Citation: [2026] 140 COUNSELVISE.COM (IT) 826699 (ITAT-MUMBAI)
• Duration Of Justice: 2 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-01-2026
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Assessment Year: 2012-2013
• Appeal Filed On: 16-10-2025
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ARUN KANTI DATTA
• Assessee Lawyers: J. PRABHAKAR
• Section: 271(1)(c)

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL “G” BENCH, MUMBAI BEFORE SHRI SAKTIJIT DEY, VICE PRESIDENT AND SHRI JAGADISH, ACCOUNTANT MEMBER ITA No. 6598/Mum/2025 (Assessment Year: 2012-13) M/s. Synergy Art Foundation Ltd. 3rd Pasta Lane, 8/9, Colaba, Mumbai-400 005 Vs. DCIT, Circle 8(2)(1) Room No. 624, 6th Floor, Aayakar Bhawan, M. K. Road, Mumbai-400 020 PAN/GIR No. AABCS 7467 F (Appellant) : (Respondent) Appellant by : Shri J. Prabhakar – CA Respondent by : Shri Arun Kanti Datta – CIT DR Date of Hearing : 17.12.2025 Date of Pronouncement : 05.01.2026 O R D E R Per Saktijit Dey, Vice President: This is an appeal by the assessee against order dated 13.08.2025, passed by National Faceless Appeal Centre (‘NFAC’ for short), confirming the penalty imposed of Rs.8,44,632/- u/s. 271(1)(c) of the Income Tax Act, 1961 (‘the Act’ for short) for the assessment year (A.Y.) 2012-13. 2. Briefly stated the facts are, the assessee is a resident corporate entity engaged in the business of selling artworks and paintings. For the assessment year under dispute, the assessee had filed its return on 30.09.2012, declaring loss of Rs.34,84,139/-. 3. In course of assessment proceeding, the Assessing Officer (A.O. for short) noticed that the assessee had claimed capital loss of Rs.26,06,892/- on account of closure of an investment named as Yatra Art Funds. When the A.O. called upon the assessee to furnish Printed from counselvise.com 2 ITA No. 6598/Mum/2025 (A.Y. 2012-13) M/s. Synergy Art Foundation Ltd. vs. DCIT the details and justify its claim, the assessee in its reply dated 11.03.2015 withdrew the claim. Accordingly, the A.O. added back the sum to the income of the assessee. Based on such addition, the A.O. initiated proceedings for imposition of penalty u/s. 271(1)(c) of the Act. Though the assessee furnished its explanation, objecting to imposition of penalty, however, the A.O. passed an order imposing penalty of Rs.8,44,632/-, alleging concealment of income as well as furnishing of inaccurate particulars of income. 4. Challenging the imposition of penalty, though, the assessee filed an appeal before the first appellate authority, however, penalty was sustained. 5. Before us, ld. Counsel appearing for the assessee submitted that the loss claimed by the assessee is revenue neutral as the assessee has only sought for carry forward of loss. Therefore, there is no case of imposition of penalty u/s. 271(1)(c) of the Act. 6. Per contra, ld. Departmental Representative (ld. DR for short) strongly relied upon the observations of A.O. and first appellate authority. 7. We have considered rival submissions and perused the materials available on record. On perusal of the computation of income furnished by the assessee along with the return of income, it is observed that in the year under consideration, the assessee had returned loss. The computation of income further reveals that the assessee has claimed carry forward of loss of Rs.26,06,892/-. Essentially, the assessee would have derived benefit had the carry forward of loss been allowed as the said loss would have been available for set off against future income. No such benefit has been availed by the assessee. That being the case, in our view, there cannot be a situation for imposition of Printed from counselvise.com 3 ITA No. 6598/Mum/2025 (A.Y. 2012-13) M/s. Synergy Art Foundation Ltd. vs. DCIT penalty u/s. 271(1)(c) of the Act. Accordingly, we delete the penalty-imposed u/s. 271(1)(c) of the Act. 8. In the result, the appeal filed by the assessee is allowed. Order pronounced in the open court on 05.01.2026 Sd/- Sd/- (Jagadish) (Saktijit Dey) Accountant Member Vice President Mumbai; Dated : 05.01.2026 Roshani, Sr. PS Copy of the Order forwarded to : 1. The Appellant 2. The Respondent 3. The CIT(A) 4. CIT - concerned 5. DR, ITAT, Mumbai 6. Guard File BY ORDER, (Dy./Asstt. Registrar) ITAT, Mumbai Printed from counselvise.com "