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Facts
The assessee's appeal pertains to a penalty levied under Section 271(1)(c) of the Income Tax Act, 1961, for AY 2015-16. The penalty was imposed for furnishing inaccurate particulars of income, leading to a quantum addition of Rs. 4,54,583/- based on re-estimation of business profits.
Held
The Tribunal held that not every quantum disallowance automatically attracts penalty under Section 271(1)(c). The case involved a subjective issue of profit re-estimation related to business turnover, which could not be covered under the penal provision.
Key Issues
Whether penalty under Section 271(1)(c) is leviable for a subjective issue of profit re-estimation arising from business turnover differences.
Sections Cited
271(1)(c)
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Income Tax Appellate Tribunal, DELHI BENCH ‘SMC’, NEW DELHI
Before: Sh. Satbeer Singh Godara
Asstt. Year : 2015-16 Roopchand Jewellers Delhi, Vs CIT(A)/NFAC, GF-3, Ground Floor, Tolstoy House, Delhi 15-17, Tolstoy Marg, New Delhi-110001 (APPELLANT) (RESPONDENT) PAN No. AAIFR7169P Assessee by: Sh. Ravi Kumar, CA Revenue by : Sh. Akhilesh Kumar Yadav, Sr. DR Date of Hearing: 02.06.2025 Date of Pronouncement: 02.06.2025 ORDER This assessee’s appeal for Assessment Year 2015-16, arises against the CIT(A)/NFAC, Delhi’s DIN & order No. ITBA/NFAC/S/250/2023-24/1059498922(1) dated 09.01.2024, in proceedings u/s 271(1)(c) of the Income Tax Act, 1961 (in short “the Act”).
Heard both the parties at length. Case file perused.
A perusal of the case file indicates at the outset that both the learned lower authorities have held the assessee to have furnished inaccurate particulars of income for the purpose of levying section 271(1)(c) penalty of Rs.1,40,466/- pertaining to the corresponding quantum addition of Rs.4,54,583/-, made on account of difference in business income after re-estimation of the profits element therein.
This being the clinching factual position, I hereby quote CIT vs. Reliance Petroproducts (P) Ltd. (2010) 322 ITR 158 (SC) that it is not each and every quantum disallowance which would automatically attract the impugned penalty provision, to delete the penalty levied in the assessee’s hands in very terms. It is reiterated that the assessee’s instant case involves a subjective issue of re-estimation of profits it’s the business turnover which could hardly be covered under the above penal provision. Deleted accordingly.