BIMLESH GOYAL,DELHI vs. ACIT, CENTRAL CIRCLE-14, DELHI

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ITA 3837/DEL/2026Status: DisposedITAT Delhi27 July 2026AY 2013-145 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the penalty imposed under Section 271(1)(c) was illegal as it was based on an ad-hoc estimation and judicial precedents suggest no penalty can be levied in such cases. Therefore, the penalty order was set aside.

What were the facts?

The assessee's appeal against a penalty order was dismissed by the CIT(A) for delay. The penalty was levied under Section 271(1)(c) following an addition made during reassessment proceedings. The assessee argued that the CIT(A) erred by not condoning the delay and by confirming the penalty without considering the merits.

What were the issues?

Whether penalty under Section 271(1)(c) can be levied on additions made based on ad-hoc estimation. Whether the CIT(A) erred in dismissing the appeal due to delay without adjudicating on merits.

Which sections of the Income-tax Act were involved?

Section 271(1)(c),Section 147,Section 148,Section 142(1),Section 250

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI BENCH “F”, NEW DELHI

Before: SHRI VIMAL KUMAR & SHRI MANISH AGARWAL

For Appellant: Ms. Nisha Garg, CA
For Respondent: Ms. Harpreet Kaur Hansra, Sr. DR
Hearing: 22.07.2026Pronounced: 27.07.2026

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “F”, NEW DELHI BEFORE SHRI VIMAL KUMAR, JUDICIAL MEMBER AND SHRI MANISH AGARWAL, ACCOUNTANT MEMBER ITA No. 3837/Del/2026, A.Y. 2013-14 Bimlesh Goyal Vs. ACIT, E-206, Central Circle-14, Indra Gali No. 3 Delhi Shahdara Chhajju Pur Babar Pur, Delhi �थायीलेखासं./जीआइआरसं./PAN/GIR No: AEFPG9025Q Appellant .. Respondent Appellant by : Ms. Nisha Garg, CA Respondent by : Ms. Harpreet Kaur Hansra, Sr. DR Date of Hearing 22.07.2026 Date of Pronouncement 27.07.2026 O R D E R PER VIMAL KUMAR, JM:

The appeal filed by the Appellant/assessee is against order dated 17.02.2026 of Ld. Commissioner of Income Tax (Appeal), Delhi-26 (hereinafter referred to as ‘the CIT(A)’) u/s 250 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) arising out of penalty order dated 23.07.2025 of Ld. Assessing Officer / Assessment Unit (hereinafter referred to

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as ‘the AO’) in pursuance of assessment order dated 24.03.2022 for Assessment Year 2013-14.

2.

Brief facts of the case are that the proceedings u/s 147 of the Act were initiated and notice u/s 148 of the Act dated 28.03.2021 was issued. The assessee was issued notices u/s 142(1) of the Act dated 06.02.2022, 19.02.2022, 02.03.2022 and show cause notice dated 05.03.2022. The assessee submitted documents i.e. balance sheet, audit report from 26AS, bank statements, stock register etc. On completion of proceedings, Ld. AO vide order dated 24.03.2022 made addition of Rs. 5,12,000/-. Separate penalty proceedings u/s 271(1)(c) were initiated which culminated in order dated 23.07.2025 by Ld. AO. Against penalty order dated 23.07.2025 of Ld. AO, the assessee filed appeal before Ld. CIT(A) which was dismissed along with application for condonation of delay of 150 days in filing the appeal.

3.

Being aggrieved, the appellant/assessee preferred appeal on following grounds:

1.

The CIT(A) erred in law and on facts in dismissing the appeal and in passing the impugned ex-parte order in gross violation of principles of natural justice by merely alleging that the assessee has not requested for condonation for delay in filing appeal a) ignoring that the assessee has fiied the appeal within the prescribed time on 21/01/2026 (i.e. 30 days of the service of the order as the assessment order dated 23/07/2025 was received by the assessee on 27/12/2025 as mentioned in the For:n 35) and (b) without adjudicating on the merits of the grounds of appeal raised by the appellant. Thus, the CIT(A)

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order should be set aside and remanded back to the lower authorities for fresh adjudication. 2. Without prejudice to Ground no. 1, the CIT(A) erred in law and on facts in confirming the penalty of Rs. 1,10,545/- u/s 271(1)(c) of the Act ignoring that penalty cannot be levied for estimated additions and ignoring the facts, submissions and evidence placed on record by the assessee. Thus, the penalty so levied should be deleted. 3. The appellant craves the leave to add, substitute, modify, 3 DLEETE OR amend all OR any ground of appeal either before OR at the time of hearing. 4. Ld. Authorized Representative for appellant/assessee submitted that Ld. CIT(A) vide ex parte order dismissed application for condonation of delay of 150 days in filing appeal ignoring the submissions made in Form 35. Ld. CIT(A) erred in confirming penalty of Rs. 1,10,545/- u/s 271(1)(c) of the Act ignoring submissions and evidences. Photo copies of order dated 13.06.2024 of ld. CIT(A) and ITAT order dated 19.12.2024 in the case of assessee for the relevant year were submitted. Hon’ble ITAT vide order dated 19.12.2024 upheld the action to the extent of impugned accommodation entries @1% only. Hon’ble ITAT Mumbai in case of Mun Gems vs. ACIT in order dated 31.07.2023 held that nearly because adhoc GP rate has been applied on alleged bogus purchases to the factor in suppression of alleged gross profit. No penalty can be levied for furnishing inaccurate particulars of the income or concealing particulars of the income.

5.

Ld. Departmental Representative relied on impugned orders.

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6.

From examination of record in light of aforesaid rival contentions, it is crystal clear that Ld. CIT(A) vide impugned order dated 17.02.2016 dismissed the application for condonation of delay of 150 days in filing appeal and the appeal against penalty order dated 23.07.2025 imposing penalty of Rs. 1,10,545/- u/s 271(1)(c) of the act.

6.1 Hon’ble ITAT, Delhi in ITA Nos. 3689 & 3690.Del.2024 titled as Bimlesh Goyal vs. ACIT for assessment year 2013-14 had upheld action of lower authorities to the extent of impugned accommodation entries were to be assessed @ 1% only in year 2013-14.

6.2 Hon’ble ITAT, Mumbai in Munn Gems vs. ACIT in order dated 31.07.2023 reported at [2023] 155 taxmann.com1 (Mumbai-Trib.) in para 4 observed as under:

“4. After hearing both the parties and perused the material on record, we find that before the ld. AO not only during the course of assessment proceedings but also during the penalty proceedings assessee had submitted the explanation that all the purchases were from the books and payments have been made through account payee cheques and ultimately addition has been sustained on purely adhoc estimate of gross profit rate. From the perusal of the records, it is seen that the assessee has submitted the quantitative details of purchases alongwith stock register entry and corresponding export sales which was also verified from the customer appraisal report. Once, the source of payment of purchases have been made through books of accounts and through account payee cheques and there is corresponding sales, then merely because some adhoc GP rate has been applied on such alleged bogus purchases to factor in suppression of alleged gross profit, no penalty can be levied for furnishing of

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inaccurate particulars of income or concealing particulars of income, which Id. AO has held in his penalty order that penalty is being levied under both the limbs, which itself shows his satisfaction is vague. Accordingly, penalty levied on such adhoc estimate cannot be sustained in the present case and hence same is deleted. Since, we have already deleted the penalty, the legal issue raised in the additional ground become purely academic.” 7. In view of above material facts i.e. submissions of balance sheet, audit report, Form 26AS, bank statements, stock register etc. before Ld. Lower authorities, application of adhoc GP rate by following judicial precedents, it is held that the imposition of penalty of Rs. 1,10,545/- u/s 271(1)(c) of the Act, vide penalty order dated 23.07.2025 being illegal, is hereby set aside. The ground of appeal No. 2 is accepted and grounds of appeal no. 1 & 3 being academic in nature are left open.

8.

In the result, the appeal filed by the appellant/assessee is allowed.

Order pronounced in the open court on 27.07.2026

Sd/- Sd/- (MANISH AGARWAL) (VIMAL KUMAR) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated: 27.07.2026 Binita, Sr. PS Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI

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