NIKHIL KUMAR BANSAL,MORENA vs. ITO, MORENA

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ITA 148/AGR/2026Status: DisposedITAT Agra02 June 2026AY 2020-213 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that no penalty can be levied on an estimated addition, as even the statute recognizes immunity from penalty on estimated income. Therefore, the penalty levied under Section 270A(9) was deleted.

What were the facts?

The Assessing Officer (AO) made an addition to the assessee's income based on estimated profit from ingenuine purchases. The assessee accepted this addition to avoid litigation. The AO then levied a penalty under Section 270A(9) for underreporting and misreporting of income, which was upheld by the CIT(A).

What were the issues?

Whether penalty under Section 270A(9) is leviable on an addition made on an estimated basis. Whether the principle that penalty cannot be levied on estimated income applies even when the penalty is for misreporting.

Which sections of the Income-tax Act were involved?

Section 270A,Section 270A(9)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, AGRA BENCH “SMC”: AGRA

For Appellant: Shri Shiv Kumar Agarwal, CA
For Respondent: Shri Anil Kumar, Sr. DR
Hearing: 21/05/2026Pronounced: 02/06/2026

INCOME TAX APPELLATE TRIBUNAL AGRA BENCH “SMC”: AGRA BEFORE SHRI M. BALAGANESH, ACCOUNTANT MEMBER

ITA No. 148/AGR/2026 (Assessment Year: 2020-21) Nikhil Kumar Bansal, Vs. ITO, Maa Gumano Devi Trading Morena, MP Compnay, Nainagarh Road, Morena, MP (Appellant) (Respondent) PAN: BJRPB3949L Assessee by : Shri Shiv Kumar Agarwal, CA Revenue by: Shri Anil Kumar, Sr. DR Date of Hearing 21/05/2026 Date of pronouncement 02/06/2026

O R D E R 1. The appeal in ITA No. 148/AGR/2026 for AY 2020-21, arises out of the order of the National Faceless Appeal Centre (NFAC), Delhi [hereinafter referred to as ‘ld. CIT(A)’, in short] dated 22.01.2026 against the order of assessment passed u/s 270A of the Income-tax Act, 1961 (hereinafter referred to as ‘the Act’) dated 11.09.2025 by the Assessing Officer, Assessment Unit, Income Tax Department (hereinafter referred to as ‘ld. AO’).

2.

The only issue to be decided in this appeal is as to whether the ld CIT(A) was justified in confirming the penalty levied u/s 270A(9) of the Act in the facts and circumstances of the instant case.

3.

I have heard the rival submissions and perused the material available on record. The quantum assessment was completed after making an addition on account of ingenuine purchases by estimating the profit element @12.5 percent thereon. The assessee is engaged in trading of mustard cake, mustard oil and related commodities. The assessee submitted that the business carried on by him is high volume, law margin, where goods are generally purchased true brokers

ITA No. 148/AGR/2026 Nikhil Kumar Bansal

and sold to various parties. The addition made in the quantum assessment @ 12.5% of purchases made from M/s. Shyam Radhe Trading Company, was accepted by the assessee by not preferring further appeal in order to avoid protracted litigation. The ld AO initiated penalty proceedings and proceeded to levy penalty u/s 270A(9) of the Act alleging that the estimated addition made on account of profit element of purchases constitute under reporting of income in consequence of mis-reporting of income and levied penalty of Rs. 1,10,240/- thereon. This action of ld AO was upheld by the ld CIT(A).

4.

It is pertinent to note that the addition made in the quantum assessment @ 12.5% of purchases itself was on estimated basis. The law is very clear that no penalty could be levied on an estimated addition. In fact, in the case of under reporting of income, the provision of Section 270A(vi) of the Act provide for granting immunity from levy of penalty on an estimated addition. This goes to prove that even the statue recognizes the fact that penalty shall not be leviable on an estimated income. Even though the penalty in the instant case has been levied for miss reporting of income. The principle that the penalty shall not be leviable on an estimated income still survives. Considering the same, I have no hesitation to delete the penalty levied u/s 270A(9) of the act in the sum of Rs. 1,10,240/- in the facts and circumstances of the instant case. Accordingly, grounds raised by the assessee are allowed.

5.

In the result, the appeal of the assessee is allowed.

Order pronounced in the open court on 02/06/2026.

-Sd/- (M. BALAGANESH) ACCOUNTANT MEMBER Dated: 02/06/2026 A K Keot Copy forwarded to 1. Applicant Page | 2

ITA No. 148/AGR/2026 Nikhil Kumar Bansal

2.

Respondent 3. CIT 4. CIT (A) 5. DR:ITAT ASSISTANT REGISTRAR ITAT, AGRA BENCH

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