Penalty 271(1)(C) in case of loss

[anil goenka]

In course of Scrutiny ACIT added some expenses & issued penalty notice u/s 271(1)(C). The Ld CIT(A) allow partly. For the confirming part the ACIT was to impose penalty u/s 271(1)(C). 

Total income as calculated by ACIT under section 143(3) is loss and order  U/s 250/143(3) computation is also for loss. Till date the assessee has not utilized the full B/f Loss as claim in the Return.

If the assessee do not set off b/f loss amounting to confirming disallowance  is he get benefit u/s 271(1)(C)

AI Summary

Penalty under section 271(1)(c) may not apply where additions are ad hoc, estimated, or genuinely disputed-appeal recommended.
Levy of penalty under section 271(1)(c) hinges on the nature and merit of additions: ad hoc or estimated disallowances, genuinely disputed claims partly allowed on appeal, prima facie allowability, prior allowance, or bona fide mistakes ordinarily preclude penalty; merits and arguability remain determinative despite retrospective amendments, and taxpayers should pursue appellate remedies while noting carried forward losses generally must be set off.