Indian Tax Update - Assessee escapes Section 271(1)(c) penalty after surrendering Section 54F deduction due to builder default

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Assessee escapes Section 271(1)(c) penalty after surrendering Section 54F deduction due to builder default

ITAT upheld CIT(A)'s deletion of penalty under Section 271(1)(c) for inaccurate particulars regarding Section 54F deduction claim. Assessee had claimed capital gains exemption but later surrendered the deduction when construction could not be completed due to builder's default. Third member ruled that wrong claim of Section 54F deduction cannot constitute "furnishing inaccurate particulars of income" under Section 271(1)(c). ITAT established that tribunals cannot travel beyond facts recorded in lower authorities' orders or introduce new evidence from external sources without confronting the assessee, citing Kishan Chand Chella Ram precedent. Since assessee provided bona fide explanation supported by documentary evidence and disclosed all re.....


Categories: Income Tax, Highlights, TaxLaws, TaxTMI
Source: https://www.taxtmi.com/highlights?id=89990 Jul 01, 2025, 10:00 AM