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2023 (4) TMI 1159 - AT - Income TaxPenalty u/s 271(1)(c) - additions made on estimation basis - HELD THAT - It is seen from the records that the additions were made on the basis of estimation and part relief was granted by the Appellate Authority. AO ought not to have imposed penalty. We therefore, considering the binding precedent as relied by the Ld. Counsel for the assessee, direct the AO to delete the penalty imposed u/s 271(1)(c) of the Act to the assessee. Grounds raised by the assessee are hence, allowed.
Issues involved:
The appeal challenges the penalty imposed u/s 271(1)(c) of the Income Tax Act, 1961 for the assessment year 2008-09 based on additions made on estimation basis. Summary: The assessment for the year 2008-09 was framed u/s 143(3) of the Income Tax Act, determining the total income at INR 34,81,720. The Assessing Officer initiated penalty proceedings u/s 271(1)(c) of the Act and imposed a penalty of INR 8,31,893. In the quantum appeal, the Ld.CIT(A) reduced the addition to INR 21,60,817. Subsequently, the AO imposed a penalty of INR 8,31,893 u/s 271(1)(c) of the Act. The assessee appealed to the Ld.CIT(A), who partially allowed the appeal by directing the AO to re-compute the penalty for an income of INR 7,63,083. The assessee then appealed to the Tribunal against the sustained penalty. The Ld. Counsel for the assessee argued that the penalty order did not specify the charge and was imposed solely on the basis of income estimation. He cited a precedent to support his argument. The Ld. JCIT DR opposed these submissions and supported the Assessing authority's orders. After hearing both parties and examining the records, the Tribunal observed that the additions were indeed based on estimation, and part relief was granted by the Appellate Authority. Considering the circumstances, the Tribunal concluded that the penalty should not have been imposed. Relying on the precedent cited by the Ld. Counsel for the assessee, the Tribunal directed the AO to delete the penalty imposed u/s 271(1)(c) of the Act. Consequently, the grounds raised by the assessee were allowed, and the appeal was deemed successful. The Tribunal pronounced the order in the open Court on 22/03/2023.
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