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TMI Blog2023 (12) TMI 1320X X X X Extracts X X X X X X X X Extracts X X X X ..... Therefore, penalty levied u/s 271(1)(c) cannot be sustained as per the judgment of Mohammed Farhan A Shaikh [ 2021 (3) TMI 608 - BOMBAY HIGH COURT (LB) ] Further, we note that in the quantum proceedings, the AO made addition of the entire alleged bogus purchases. CIT(A) and thereafter, the Tribunal restricted the addition to 12.5% of the alleged bogus purchases. The addition has been made in the hands of the Appellant on account of bogus purchase was on estimation basis and therefore, we hold that CIT(A) was not correct in rejecting the contention of the Appellant that no penalty u/s 271(1)(c) of the Act can be levied in the present case as the additions in the quantum proceedings were made/sustained on estimate basis. Our view draws stren ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Ld. CIT(A) wrongly confirmed penalty u/s 271(1)(c) by ignoring that Ld. A.O. has levied penalty, on peak credit of Rs.1002379/- as addition made in quantum order dtd. 05-03-15 by A.O and that addition was reduced by estimated rate of 12.5% = Rs125297/- in quantum order dtd. 03-06-19 by Ld. CIT(A) and that quantum order of CIT(A) was confirmed by Honorable ITAT in their quantum order dtd. 10-03-21 and levy of penalty u/s 271(1)(c) on estimated addition is bad-in-law. 3. When the appeal was taken for hearing none present on behalf of the Appellant. On perusal of the memorandum of appeal, we find that the solitary issue raised in the present appeal pertains to the levy of penalty under Section 271(1)(c) of the Act. We have perused the penalt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as the addition was based upon estimation on income. However, the CIT(A) was not convinced and dismissed the aforesaid appeal vide order, dated 28/02/2023. 7. The Appellant is now in appeal before us challenging the order dated 28/02/2023, passed by the CIT(A) on the grounds reproduced in paragraph 2 above. 8. We have perused the Assessment Order, dated 05/03/2015, passed under Section 143(3) read with Section 147 of the Act, penalty order, dated 16/03/2022, passed under Section 271(1)(c) of the Act and the order, dated 28/02/2023, passed by the CIT(A) under Section 250 of the Act; and have heard the Learned Departmental Representative who relied upon the aforesaid orders. We note that in paragraph 6.1 of the order impugned, the CIT(A) has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rollary; nevertheless, it must stand on its own. These proceedings culminate under a different statutory scheme that remains distinct from the assessment proceedings. Therefore, the assessee must be informed of the grounds of the penalty proceedings only through statutory notice. An omnibus notice suffers from the vice of vagueness. (Emphasis supplied) 10. It is admitted position that in the present case, penalty notice was issued under Section 274 read with 271 of the Act without deleting or striking off the inapplicable part. Thus, the statutory notice issued to the Appellant does not inform the Appellant about the charge against the Appellant whether penalty under Section 271(c) of the Act was sought to be levied for concealment of parti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The matter travelled to the Tribunal, the Tribunal restricted the addition to 12.5% of the alleged bogus purchases. The addition has been made in the hands of assessee on account of bogus purchase merely on estimations. It is an accepted legal position that no penalty under section 271(1)(c) of the Act can be levied where additions are made on estimate. [Re: CIT Vs. Krishi Tyre Re-trading Rubber Industries 360 ITR 580(Raj.), CIT Vs. Subhash Trading Company 221 ITR 110 (Guj.), CIT Vs. Sangrur Vanaspati Mills Ltd. 303 ITR 53 (P H)]. 5. We further find that the notice issued under section 274 r.w.s. 271(1)(c) of the Act dated 18.03.2015 and the subsequent notice issued under section 271(1)(c) of the Act dated 15.03.2019 falls short of the lega ..... X X X X Extracts X X X X X X X X Extracts X X X X
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