2024 (6) TMI 102

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....Faceless Assessment Centre, Delhi, u/s. 271(1)(c) the Income-tax Act(hereinafter referred to as the "Act"), dated 09.09.2021 for Assessment Year 2010-11. 2. Grounds taken by the assessee are reproduced as under: "1. On the facts, and in circumstances of the case, and in law, learned Commissioner of Income-tax (Appeal) erred in upholding action of the Assessing Officer in imposing penalty under section 271 (1) (c) of the Income-tax Act 1961 amounting to Rs. 154,250 being tax sought to be evaded on estimated addition sustained @ 6% of alleged bogus purchases without appreciating that the addition of alleged non-genuine purchases was made on a difference of opinion; and there was neither concealment of income nor filing of inaccura....

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....was made being 12.5% of Rs. 81,07,970/- held as unproved/unexplained purchases. Consequently, penalty proceedings u/s. 271(1)(c) were initiated by issuing a notice u/s. 274 r.w.s. 271(1)(c) of the Act. 4. In the quantum appeal, before the ld. CIT(A) the addition made was reduced to Rs. 4,86,478/- by adopting 6% instead of 12.5% on the unproved/unexplained purchases of Rs. 81,07,970/-. Assessee took up the matter before the Co-ordinate Bench of ITAT, Mumbai in appeal No. ITA 5473/Mum/2018 which was dismissed vide order dated 11.09.2019 by confirming the percentage adopted by ld. CIT(A) of 6%. 4.1. Subsequent to the order of Tribunal, penalty proceedings were taken up by the ld. Assessing Officer who levied a penalty of Rs. 1,54,250/- b....

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....see had submitted that in a case of estimation of income/disallowance, no penalty u/s. 271(1)(c) is warranted. In the present case, the explanation of the assessee though not accepted in its entirety, there is no material on the basis of which it would be held that the same was not bonafide. In other words, the explanation given by the assessee has not been disproved. 7.1. It is a settled position that on the addition /disallowance made on an estimate basis, no penalty u/s. 271(1)(c) is leviable. For the purpose of levying penalty under 271(1)(c), the AO has to clearly prove that the assessee has concealed the particulars of his income or has furnished inaccurate particulars of his income. Considering the undisputed fact that addition on....