DIAGOLD,JAIPUR vs. ACIT, CEN CIR -2, JAIPUR

ITA 1822/JPR/2025Status: DisposedITAT Indore25 June 2026AY 2014-156 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that since the addition was made purely on an estimated basis without any finding of falsity in the assessee's explanation or proof of concealment, the penalty was not leviable. The defect in the penalty notice was also noted.

What were the facts?

The assessee's books were rejected due to alleged bogus purchases, and an addition was made on an estimated basis. The penalty under Section 271(1)(c) was confirmed by the CIT(A).

What were the issues?

Whether penalty under Section 271(1)(c) can be levied when additions are made on an estimated basis and whether a defective penalty notice invalidates the proceedings.

Which sections of the Income-tax Act were involved?

Section 271(1)(c),Section 145(3),Section 147,Section 143(3)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, JAIPUR BENCHES, “SMC” BENCH, JAIPUR

Before: SMT. ANNAPURNA GUPTA

Hearing: 22.06.2026Pronounced: 25.06.2026

The present appeal has been filed by the assessee against the order passed by the Office of the Commissioner of Income Tax, Appeal CIT(A), Jaipur-04 (hereinafter referred to as “Ld. CIT(A)”), dated 29.10.2025 confirming the levy of penalty under Section 271(1)(c) of the Income Tax Act, 1961 (hereinafter referred to as “the Act”).

2.

The assessee in this appeal has taken following grounds of appeal:-

1.

The Ld. CIT(A) has erred in law and on facts in confirming the penalty of Rs. 8,36,406/- levied u/s 271(1)(c) of the Act, despite the fact that the addition sustained in quantum proceedings is purely on an estimated basis by applying a GP rate, and no P a g e | 2 Diagold material was brought on record to establish concealment or furnishing of inaccurate part

The order continues below.

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