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TMI Blog2021 (4) TMI 304X X X X Extracts X X X X X X X X Extracts X X X X ..... d by the AO u/s.271(1)(c) of the Income Tax Act to the tune of Rs. 2,04,100/- which may kindly be deleted. 2. On the facts and circumstances of the case and in law, the learned CIT appeals is not justified in confirming the penalty order of the AO looking to the decision of the Honourable Supreme Court of India, Civil Appeal No.2463 of 2010 arising out of SLP No.27161 of 2008 in the case of CIT, Ahmedabad Vs. Reliance Petro Products Pvt. Ltd. The penalty levied by the AO may kindly be deleted." 2. The solitary grievance of the assessee in this appeal is levy of penalty by the Assessing Officer u/s.271(1)(c) of the Income Tax Act, 1961 (hereinafter referred to as "the Act‟) and as confirmed by the Ld. CIT(Appeals). 3. The brief fac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the time of hearing, the Ld. Counsel for the assessee submitted that these were the disallowances made by the Assessing Officer on estimation basis and it is the settled legal position that there cannot be any imposition of penalty u/s.271(1)(c) of the Act in respect of disallowances made on such estimation basis. 6. The Ld. Counsel for the assessee submitted that the assessee had made bona-fide disclosures through all the necessary particulars in the return of income and computation statement. Mere disallowance of a claim made bona-fide would not amount to concealment of particulars of income or furnishing inaccurate particulars of such income to warrant imposition of penalty u/s.271(1)(c) of the Act. To support such contention, the Ld. C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... whether there is "concealment of income‟ or "furnishing of inaccurate particulars of income‟. More so, when the disallowances have been enforced by the Ld. CIT(Appeals) on estimation basis, in such scenario, the settled legal position is that no penalty u/s.271(1)(c) of the Act cannot be imposed. We find strength from the following decisions of the Hon'ble High Courts: i) CIT vs. Aero Traders Pvt. Ltd., 322 ITR 316 (Del) ii) CIT Vs. Subhash Trading Co., 221 ITR 110 (Guj.) iii) Harigopal Singh Vs. CIT, 258 ITR 85 (P & H) 9. We find that the Hon'ble Delhi High Court in CIT vs. Aero Traders Pvt. Ltd.(supra.) has held that no penalty u/s.271(1)(c) of the Act can be imposed when income is determined on estimate basis. The rel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tter of penalty for concealment of income. Penalty being a quasi criminal proceeding there is a duty cast on the AO to establish the guilt of the assessee in concealing the income or furnishing of inaccurate particulars of such income. As stated the seizure of the books of the police is not an act of the assessee. No motives can be attributed to the non-availability of books of accounts to examine and verify the various claims made by the appellant." 6. Aggrieved by this order, the Revenue filed an appeal before the Tribunal. The Tribunal, after hearing the submissions made on behalf of the Revenue, came to the conclusion that the CIT(A) had taken the correct decision in deleting the penalty. The operative portion of the impugned order dt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n view of the foregoing precedents of the Hon'ble Courts, it is apparent that when the bedrock of instant penalty is on the estimated addition, the same cannot be sustained. 10. Therefore, keeping in view the totality of the facts and circumstances of the case, we are of the considered view that in this case, the additions were made on the basis of estimation and as discussed in the cases referred above, the penalty cannot be levied on the basis of estimated additions and thus, it is not a fit case for levying penalty. Accordingly, we set aside the order of the Ld. CIT(Appeals) and direct the Assessing Officer to delete the penalty from the hands of the assessee. 11. In the result, appeal of the assessee is allowed. Order pronounced on 0 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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