ROOP JWELFIN PVT. LTD,DELHI vs. ACIT, CENTRAL CIRCLE 16, NCC DIT(S), JHANDEWALA EXT, NEW DELHI,

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ITA 2043/DEL/2026Status: DisposedITAT Delhi10 July 2026AY 2016-175 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 penalty under Section 271(1)(c) is not maintainable when additions are made purely on an estimate basis. Such additions are considered to be based on assumptions and presumptions, not on concrete findings of concealment or furnishing of incorrect particulars.

What were the facts?

The assessee filed appeals against the orders confirming penalties imposed under Section 271(1)(c) of the Income Tax Act. The original additions leading to the penalty were made on an estimate basis by the Assessing Officer.

What were the issues?

Whether penalty under Section 271(1)(c) is leviable when the underlying additions to income were made on an estimate basis.

Which sections of the Income-tax Act were involved?

Section 271(1)(c),Section 250,Section 153C,Section 143(3)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI BENCH “B”: NEW DELHI

Before: MS MADHUMITA ROY & SHRI KRINWANT SAHAY

For Respondent: Shri Om Prakash, CIT (DR) and Shri Mahendra Singh, Sr. DR
Hearing: 02/07/2026Pronounced: 10/07/2026

INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “B”: NEW DELHI BEFORE MS MADHUMITA ROY, JUDICIAL MEMBER AND SHRI KRINWANT SAHAY, ACCOUNTANT MEMBER ITA No. 2043/Del/2026 (A.Y 2016-17) ITA No. 2044/Del/2026 (A.Y 2015-16)

M/s Roop JwelfinPvt.Ltd. Vs. Income Tax Officer, 1165, Kucha Mahajani, Central Circle-16, NCC Chandni Chowk, Delhi- DIT(S), Jhandewalan 110006 Extension, New Delhi (Appellant) (Respondent) PAN: AADCR5997E

Assessee by : Sh. Samir Mahajan, CA Revenue by: Shri Om Prakash, CIT (DR) and Shri Mahendra Singh, Sr. DR

Date of Hearing 02/07/2026 Date of pronouncement 10/07/2026 O R D E R PER MADHUMITA ROY, J. M.: These two instant appeal filed by the assessee are

directed against the orders dated 10/10/2025 passed by the

Ld. Commissioner of Income-tax (Appeals), Delhi-26 [hereinafter

referred to as the Ld. CIT(A)] under Section 250 of the Income

Tax Act, 1961 (hereinafter referred to as ‘the Act’) arising out of

the Assessment Orders dated 28/12/2021 passed by the

Assessment Unit, Income-tax Department (hereinafter referred

to as ‘the Ld. AO’) under Section under Section 153C r.w.s.

143(3)of the Act for Assessment Year 2016-17 and 2014-15

respectively.

2.

The appeal is barred by limitation of 57 days in support of

which an application for condonation of delay has duly been filed,the

content thereof appears to be genuine. Considering the averments

made in the condonation applications the delay in filing appeals

before us iscondoned.

3.

The grounds of appeal are as under:-

“1. That on the facts and circumstances of the case, Ld. CIT(A)- 26, Delhi has grossly erred in law in confirming penalty of Rs. 1,50,084/- u/s 271(1)(c) of the Act. Penalty confirmed by Ld. CIT(A)-26, Delhi is illegal and bad in law & requires to be quashed. 2. That on facts and circumstances of the case, Ld. CIT(A)-26, Delhi has grossly erred in law in confirming penalty of Rs. 1,50,084/- imposed u/s 271(1)(c) of the Act on account of additions made on estimate basis by the Assessing Officer and additions reduced by Ld. CIT(A) again on estimate basis. Additions made on estimate basis could not be treated as concealment of income for the purpose of imposing penalty u/s 271(1)(c) of the Act. 3. That order passed by Ld. CIT(A)-26, Delhi is based on assumptions & presumptions far away from facts of the case. Orders based on assumptions and presumptions are not permitted under law and are void ab-initio. 4. That on facts and circumstances of the case, order passed by Ld. CIT(A)-26, Delhi is illegal and bad in law and has been passed without considering the submissions of the assessee. 5. That the Appellant requests for leave to add or amend the grounds of appeal before the appeal is heard or disposed off.”

4.

The question before us as to whether penalty u/s 271(1)(c) is

maintainable having regard to the addition made by the Ld. A.O., on

estimate basis which was further confirmed by the Ld. CIT(A) that

too on estimate basis. It is the case made out by the assessee that once addition is made on estimation the penalty does not lie as

addition was made on assumption and presumption and no concrete

finding on the merit of the matter alleging any disqualification of the

assessee. In this regard, he also relied upon following judgments:

“a) Vedabai alias Vaijayanatabai Baburao Patil Vs. Shantaram

Banurao Patil & Ors. (2002) 253 ITR 798 (SC),

b) Collector, Land Acquisition &Anr. vs. Mst. Katiji& Ors.

(1987) 62 CTR (SC)(Syn) 23: 1987 (28) ELT 185 (SC),

c) Ganga Sahai Ram Swarup vs. ITAT (2004) 271 ITR 512 (All)

d) Yuvraj Majajan Vs. Income Tax Officer ITA No.

958/Chd/2014 (2016) 46 CCH 0311 Chd. Trib

e)Bharat Auto Center Vs. CIT (2006) 282 ITR 366, the Hon'ble

Allahabad High Court

f) Pankaj Investments Vs. Additional Commissioner Of Income

Tax, ITA No. 1986/Mum/2013, 2967/Mum/2013 (2016) 46

CCH 0056 Mum Trib the Hon'ble Bombay Tribunal.

g) Commissioner of income tax vs. Ajaib Singh & Co. High

Court of Punjab & Haryana (2001) 170 CTR (P& H) 489: (2002)

253 ITR 630 (P& H)): (2001) 119 taxman 825 (P& H).

h). Ram Lakhan vs. DCIT (ITA No. 5456/Del/2024, AY 2017-

18).”

5.

The contention made as above by the Ld. AR has not been able

to controverted by the Ld. DR .

6.

Having regard to the fact that addition having been made on

estimate basis and the settled principle of law that once addition is

made on estimate basis the consequent penalty imposed on estimate

addition is nothing but addition made only on assumption and

presumption and could not be considered either furnishing of

incorrect particulars of income of the assessee or concealment of

income by the assessee which has also decided by all the above

Judgments relied upon by the Ld. AR and, therefore, respectfully

relying upon the same addition made in the penalty proceeding

under Section 271(1)(c) of the Act is deleted in both the matters.

7.

In the result, both the appeals filed by the assessee are

allowed.

Order pronounced in the open court on 10/07/2026.

Sd/- Sd/- (KRINWANT SAHAY) (MADHUMITA ROY) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated: 10/07/2026 R. Naheed, Sr PS

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