2026 (3) TMI 1668

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...."learned CIT(A)"], which in turn arose from the penalty order passed under section 271(1)(c) of the Act, for the assessment year 2009-10. 2. In this appeal, the assessee has raised the following grounds: - "1. On the facts and circumstances of the case, the learned Commissioner of Income Tax (Appeal erred in confirming the penalty without appreciating that notice issued u/s 274 r.w.s. 271(1)(c) did not mention the charge under which the said notice was issued as whether it was towards "Concealment of income" or "furnishing of inaccurate particulars" and notice itself was bad in law as held by Honourable Supreme Court in case of SSA's Emerald Meadows, 242 taxman 180. 2. On the facts and circumstances of the case, the....

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....) read with section 147 of the Act, the Assessing Officer ("AO") made an addition of Rs. 18,25,326/-by estimating the profit element @12.5% on the total purchases found to be bogus. In further appeal, the learned CIT(A) upheld the addition made by the AO. 5. In the meanwhile, penalty proceedings under section 271(1)(c) of the Act were initiated separately. After considering the submissions of the assessee, the AO vide order dated 29.03.2018 passed under section 271(1)(c) of the Act levied a penalty of Rs. 3,14,364/-. The learned CIT(A), vide impugned order, dismissed the appeal filed by the assessee and upheld the penalty levied under section 271(1)(c) of the Act. 6. During the hearing, the learned Authorised Representative ("learned ....

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....imated basis of 12.5%, which was affirmed by the learned CIT(A) in quantum appellate proceedings. Therefore, the entire addition for the year under consideration has been made solely on the basis of estimates. 10. We find that the Hon'ble Rajasthan High Court in CIT v/s Krishi Tyre Retreading and Rubber Industries, reported in [2014] 360 ITR 580 (Raj.), held that where an addition is made purely on an estimate basis, no penalty under section 271(1)(c) of the Act is leviable. Similar view has been expressed by the Hon'ble Punjab & Haryana High Court in CIT v/s Sangrur Vanaspati Mills Ltd., reported in [2008] 303 ITR 53 (P&H), wherein the Hon'ble High Court held that when the addition has been made on the basis of estimate and ....