TaxTMI 
TaxTMI 
2026 (7) TMI 1025
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.... ["the Act"] for assessment-year ["AY"] 2007-08, the assessee has filed this appeal on following grounds: "1. In passing penalty order u/s 271(1)(c) imposing penalty of Rs. 37,30,939/- vide order dated 29-03-2019 and CIT(A) erred in confirming the same vide order dated 30-01-2026, it is said that the penalty is illegal, unwarranted and contrary to settled legal position. 2. In passing and upholding penalty orders u/s 271(1)(c) in light of the fact that the issue of penalty in the case of ad-hoc additions is settled by jurisdictional ITAT Surat bench in case of Ramprakash Vijayvergia ITA No. 125/Srt/2024 and in the case of Borda Brothers in ITA 1062 of 2024 of Surat. Hence, penalty being illegal, may be deleted and the impu....
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....m 12.5% to 6%. (iii) Simultaneous with completion of assessment as aforesaid, the Ld. AO also initiated penalty proceeding u/s 271(1)(c) against assessee. Ultimately, the AO passed penalty-order dated 29.03.2019 imposing a penalty of Rs. 37,30,939/- qua the addition of Rs. 1,11,69,135/- sustained by Ld. CIT(A). Aggrieved by penalty so imposed, the assessee filed appeal to Ld. CIT(A) but did not get any success. Now, the assessee has come in present appeal challenging the penalty imposed by AO and upheld by CIT(A). 3. Presently, the issue before us is the penalty imposed by Ld. AO u/s 271(1)(c) and upheld by Ld. CIT(A). 4. Ld. AR for assessee submitted that the AO has imposed penalty qua the addition of bogus purchases. Howeve....
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...., on appeal before the ld. CIT(A), the addition was restricted to Rs. 62,34,360/- which is 12.5% of the disputed/bogus purchases. The ld. AR of the assessee submits that on further appeal by revenue before the Tribunal, th addition was restricted to 5% of Gross profit. The ld. AR of the assessee submits that it is settled position under law that no penalty under Section 271(1)(c) of the Act is leviable on the addition made on estimated/ ad hoc basis. The entire penalty is to be deleted. 5. On the other hand, the Id. Sr. DR for the revenue supported the orders of lower authorities. The Id. Sr. DR for the revenue submits that the penalty to the extent of bogus purchases confirmed by the ld. CIT(A) may be upheld. 6. We have c....
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....we direct the Assessing Officer to delete the entire penalty levied vide order dated 09/03/2018. In the result, the grounds of appeal raised by the assessee are allowed. 8. In the result, this appeal of assessee is allowed." 5. Per contra, Ld. DR for revenue submitted that it is not a simple case of adhoc/estimated addition, it is a case of bogus purchases made by assessee by obtaining non-genuine bills from suppliers although the addition has been made on estimation basis. Therefore, the penalty u/s 271(1)(c) is certainly triggered and the lower authorities are right in imposing/upholding penalty. Ld. DR submitted even if there are favourable decisions of Co-ordinate Benches as relied by Ld. AR, this bench should give a conside....