Tax Tribunal Rules No Penalty for Ad-Hoc 20% Expense Disallowance; Cites Supreme Court and High Court Precedents.

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....The Income Tax Appellate Tribunal (ITAT) held that no penalty u/s 271(1)(c) can be imposed for an ad-hoc disallowance of 20% of expenses made by the Assessing Officer. The ITAT relied on the Supreme Court's decision in CIT vs. Reliance Petro Products (P) Ltd., which stated that merely making an unsustainable claim, without any inaccuracy in furnishing particulars of income, does not attract penalty. The ITAT cited various High Court decisions, including CIT vs. Ajaib Singh and Co., Naranbhai Veerabhai and Co., and Addl. CIT vs. Delhi Cloth and General Mills Co. Ltd., which held that no concealment penalty can be imposed for disallowance of expenses on an estimated basis. Since the major amount was already deleted by the CIT(A)/NFAC, and the.........