Penalty under Section 271(1)(c) not leviable where additions are purely estimate-based; absence of deliberate concealment defeats penalty.

Where additions are made solely on estimate without evidence of deliberate concealment, penalty under section 271(1)(c) cannot be sustained; the legal principle applied is that estimate-based quantification of income, unsupported by specific evidence of concealment or inaccurate particulars, does not justify the statutory penalty, and assessment steps under reassessment and regular assessment recording estimation do not by themselves establish concealment, resulting in a decision favourable to the assessee.

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Issues: Whether penalty under section 271(1)(c) of the Income-tax Act, 1961 is leviable where the impugned addition has been made purely on the basis of estimate (estimated disallowance for bogus purchases).

Analysis: The impugned penalty was imposed after an addition based on estimated non-genuine purchases. Precedents establish that when additions are made purely on an estimate and not supported by concrete evidence of concealment or inaccurate particulars, penalty under section 271(1)(c) is not sustainable. The authorities relied upon apply the legal principle that estimate-based quantification of income, without specific evidence of deliberate concealment, does not justify imposing the statutory penalty. The statutory provisions involved include Section 271(1)(c) (penalty for concealment or furnishing inaccurate particulars), and the assessment steps under Section 147 and Section 143(3) which record that the quantum was determined by estimate.

Conclusion: Penalty under section 271(1)(c) of the Income-tax Act, 1961 is not leviable where the addition has been made solely on an estimate; decision is in favour of the assessee.

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