2024 (3) TMI 1011 - AT - Income Tax

Tribunal Upholds Deletion of Penalty; No Penalties on Estimated Additions Without Disputed Sales for AY 2011-12.

The Tribunal dismissed the Revenue's appeal, affirming the deletion of the penalty under Section 271(1)(c) of the Income Tax Act, 1961, for the assessment ... Penalty levied u/s 271(1)(c) - Estimation of income - bogus purchases - addition of 12.5% of the total purchases - HELD THAT:- As decided in MUKESH SHALIGRAM SHARDA [2023 (4) TMI 678 - ITAT MUMBAI] no penalty u/s 271(1)(c) is leviable on estimated additions. Thus the impugned order deleting the penalty levied u/s 271(1)(c) of the Act is upheld. As a result, grounds raised by the Revenue are dismissed. Issues:The appeal challenges the deletion of penalty u/s 271(1)(c) of the Income Tax Act, 1961 by the learned Commissioner of Income Tax (Appeals) for the assessment year 2011-12.Details:The Revenue contested the deletion of penalty u/s 271(1)(c) of the Act. The assessee did not appear during the hearing, leading to an ex-parte decision. The Assessing Officer had added 12.5% of total purchases due to insufficient proof of their genuineness. Subsequently, a penalty of Rs. 1,41,020 was levied u/s 271(1)(c).The learned CIT(A) referred to a similar case before the Tribunal and decided to delete the penalty based on the Tribunal's ruling. The Tribunal had held that penalties cannot be levied on estimated additions alone, especially when sales corresponding to the purchases are not disputed. Citing various court decisions, the penalty was deemed unjustified and was directed to be deleted.The Tribunal upheld the decision of the learned CIT(A) to delete the penalty u/s 271(1)(c) based on the precedent set by the coordinate bench. Consequently, the Revenue's appeal was dismissed, and the penalty deletion was affirmed.In conclusion, the appeal challenging the deletion of penalty u/s 271(1)(c) was dismissed by the Tribunal, following the decision based on the coordinate bench's ruling.