Nil estimate penalty not sustained where 80J relief remained uncertain and income could not be accurately determined.

Penalty under section 273(a) was not leviable where the assessee's nil estimate was filed against an uncertain income position arising from disputed and carry-forward relief under section 80J. The estimate could not be treated as knowingly untrue because the correct tax position depended on whether the relevant reliefs were allowable and carried forward, and the Revenue did not show that the assessed income, after those reliefs, would still justify penalty. On those facts, the nil estimate under section 212 was not false in the statutory sense required, and cancellation of the penalty was upheld.

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Issues: Whether penalty under section 273(a) of the Income-tax Act, 1961 was leviable where the assessee filed a nil estimate in the backdrop of disputed and carry-forward relief under section 80J.

Analysis: The estimate filed by the assessee could not be treated as knowingly untrue when the allowability and carry-forward effect of relief under section 80J remained uncertain. The appellate authority found that the income position could not be correctly determined without allowing the relevant reliefs, and that the Revenue had not shown that the assessed income, after giving such relief, would still have supported a penalty. On the facts, the assessee's nil estimate under section 212 was not shown to be false in the statutory sense required for penalty.

Conclusion: The penalty under section 273(a) was not sustainable and the cancellation of the penalty was upheld.

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