Penalty under section 270A fails where the addition is based only on estimated income and no concealment is conclusively established.

Penalty under section 270A cannot be sustained where the underlying addition is made purely on estimation of income, because an estimated adjustment does not by itself establish concealment or misreporting with the requisite certainty. The Tribunal followed the coordinate bench view in the assessee's own case on the same point and quashed the penalty.

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Issues: Whether penalty imposed under section 270A, initiated under section 274 of the Income-tax Act, 1961, could be sustained when the underlying addition was made purely on estimation of income.

Analysis: The addition forming the basis of penalty was made on an estimated basis. The governing principle applied was that penalty cannot be levied where the assessed addition is founded on estimation alone and does not rest on a conclusive determination of concealment or misreporting. The Tribunal also followed the coordinate bench decision in the assessee's own case on the same point.

Conclusion: The penalty was held to be unsustainable and was quashed in favour of the assessee.

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