SPHERE,SURAT vs. ITO, WARD-1(3)(1), SURAT

ITA 95/SRT/2026Status: DisposedITAT Surat23 September 2026AY 2008-097 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that penalty under Section 271(1)(c) is not leviable on additions made on an ad-hoc or estimated basis. Following previous decisions of coordinate benches with identical facts, the Tribunal found the penalty unsustainable in law.

What were the facts?

The assessee firm, engaged in the diamond business, faced a re-opened assessment for AY 2008-09 due to allegations of bogus purchases. The Assessing Officer (AO) made an addition of Rs. 30,53,137/-, which was later reduced to Rs. 1,52,656/- by the CIT(A). Subsequently, a penalty of Rs. 9,43,420/- was levied under Section 271(1)(c).

What were the issues?

Whether penalty under Section 271(1)(c) can be imposed on additions made on an ad-hoc or estimated basis, especially when the quantum of addition has been reduced at various appellate stages.

Which sections of the Income-tax Act were involved?

Section 271(1)(c)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, SURAT BENCH, SURAT

Before: MS. SUCHITRA KAMBLE & SHRI B.M. BIYANI

For Appellant: Shri Sapnesh Sheth, Advocate
For Respondent: Shri Ashish Kumar, Sr.DR
Hearing: 21.09.2026Pronounced: 23.09.2026

Per B.M. Biyani, A.M.: Feeling aggrieved by the order of first appeal dated 04.11.2025 passed by learned Commissioner of Income-tax-National Faceless Appeal Centre, Delhi [“Ld. CIT(A)”], which in turn arises out of the penalty-order dated 25.03.2022 passed by learned National Faceless Assessment Centre, Delhi

Sphere ITA No. 95/SRT/2026 - AY 2008-09

[“Ld. AO”] u/s 271(1)(c) of Income-tax Act, 1961 [“the Act”] for assessment- year [“AY”] 2008-09, the assessee has filed this appeal on following grounds:

“1. On the facts and circumstances of the c

The order continues below.

Read the full judgment

A free account opens 10 full judgments a month. Re-reading one you have already opened does not count again.

Create a free accountSign in

See plans and prices

The summary, the parties, the sections and the citations above are open to everyone and always will be. Only the text of the order and the PDF are metered.

More judgments on Section 271(1)(c)

All 25,141 judgments and leading authorities on Section 271(1)(c) →

Recent GST High Court judgments

Search GST case law →