ITAT reversed penalties imposed under s271(1)(c) and s271AAB...

ITAT reversed penalties imposed under s271(1)(c) and s271AAB against assessee regarding disputed cash expenses and labor payments. AO's additions were initially made at 50%, reduced to 35% by CIT(A), and further reduced to 20% by Coordinate Bench. Despite CIT(A)'s observation of assessee's alleged malafide intent and mens rea, ITAT held that penalties cannot be imposed on additions made purely on estimate basis, following established precedent. The Tribunal noted AO's irresponsible approach and lack of judicial discipline in penalty proceedings, particularly given the Coordinate Bench's prior findings on quantum additions. Appeal allowed in assessee's favor with complete deletion of penalties.