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TMI Blog2012 (4) TMI 606X X X X Extracts X X X X X X X X Extracts X X X X ..... ring on record any judicial verdict, to support their conclusion. In view of the above facts, it is pertinent to refer to the decision of the jurisdictional High Court, in the case of Harigopal Singh vs CIT (2002 (8) TMI 65 - PUNJAB AND HARYANA High Court) whereby it has been categorically held that penalty cannot be levied when income has been estimated. Having regard to the above legal and factual discussion, the order of CIT(A), upholding the levy of penalty, is set aside. Thus, the appeal of the assessee is allowed. - ITA No. 843/Chd/2009 - - - Dated:- 17-4-2012 - Ms. SUSHMA CHOWLA, JUDICIAL MEMBER AND SHRI MEHAR SINGH, ACCOUNTANT MEMBER For the Appellant: Shri Arun Singla For the Respondent: Shri Akhilesh Gupta ORD ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fore, the mere additions or disallowances or estimation of income cannot be made the foundation, for levy of penalty u/s 271(1) (c) of the Act. Ld. DR placed reliance on the order of lower authorities. 6. The Assessing Officer in the penalty order u/s 271(1) (c) of the Act, for the assessment year 2003-04, levied penalty at ₹ 1,17,523/-, on the ground of addition made on the foundation of estimated high NP rate of 12% as against shown by the assessee at 10%. 7. The Ld. CIT(A), upheld the findings of the Assessing Officer ignoring the submissions filed by the assessee-appellant before him. The assessee-appellant cited following decisions, to support his contention:- 1) CIT Vs Nadir Ali Co. [106 ITR 151 (All.)] 2) CIT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g the upholding of penalty levied by the Assessing Officer. 10. We have heard the rival submissions and have also perused the materials available on record. Perusal of the findings of the CIT(A), as well as that of Assessing Officer are a clear reflection of perception of such authority, in the matter of levy of penalty u/s 271(1) (c) of the Act. The levy of penalty is discretionary and not mandatory u/s 271(1) (c) of the Act. The provisions of section 271(1) (c) of the Act being penal in character, must be strictly interpreted. Both the Assessing Officer and CIT(A), failed to bring material on record, to demonstrate that the case falls under the provisions of section 271(1) (c) of the Act. Needless to say that levy of penalty under such ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... see have been rejected by the CIT(A), in a single stroke, without demonstrating how the same are not applicable to the facts of the assessee s case. However, it is pertinent to mention here that the Revenue Authorities failed, to bring on record any judicial verdict, to support their conclusion. In view of the above facts, it is pertinent to refer to the decision of the jurisdictional High Court, in the case of Harigopal Singh vs CIT (2002) 258 ITR 85 (P H) whereby it has been categorically held that penalty cannot be levied when income has been estimated. Having regard to the above legal and factual discussion, the order of CIT(A), upholding the levy of penalty, is set aside. Thus, the appeal of the assessee is allowed. 11. In the resul ..... X X X X Extracts X X X X X X X X Extracts X X X X
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