ACIT, CENTRAL CIRCLE-2(1), HYDERABAD vs. SREE NAGENDRA CONSTRUCTIONS, KHAMMAM

ITA 2319/HYD/2026Status: DisposedITAT Hyderabad23 October 2026AY 2016-174 pages
AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that the appeals of the Revenue were dismissed. The Tribunal disagreed with the Ld. DR's submissions. It found that the case was not one of furnishing inaccurate particulars or concealment of income. Although the assessee could not upload the return, the computation of income was uploaded and not disputed, with taxes paid on 3% net profits. The Tribunal noted that while the AO estimated net profit at 8% on an ad-hoc basis, which was reduced to 5% by the Ld. CIT(A), this did not constitute furnishing inaccurate particulars or concealment. Therefore, the Tribunal found no infirmity in the Ld. CIT(A)'s order and upheld it. The operative direction was that the Revenue's appeals were dismissed.

What were the facts?

The Revenue filed appeals against the orders of the Ld. CIT(A) for Assessment Years 2015-16 and 2016-17. The appeals were filed with a delay of 22 days, which was condoned. The assessee, Sree Nagendra Constructions, engaged in civil contract works, initially showed net profits at 3%. The Assessing Officer (AO) selected the case for scrutiny under Section 143(3) and estimated profits at 8%. The Ld. CIT(A) reduced this to 5%. The AO initiated penalty proceedings under Section 271(1)(c) for furnishing inaccurate particulars and concealment of income. The Ld. CIT(A) deleted the penalty, stating the AO had not specified the inaccuracies or concealment and that the estimation was ad-hoc.

What were the issues?

1. Whether the Ld. CIT(A) erred in deleting the penalty levied under Section 271(1)(c) of the Income Tax Act, 1961, for furnishing inaccurate particulars of income and concealment of income, despite the assessee's income being estimated by the AO? Assessee's Contention: The Ld. AR relied on the findings of the Ld. CIT(A). Revenue's Contention: The Ld. DR argued that the assessee had concealed its income and that the case was covered under Explanation-1 to Section 271(1)(c) because the assessee initially did not file a return of income, and income was later discovered. The Ld. DR also argued that the penalty was attracted due to the estimated profits.

Which sections of the Income-tax Act were involved?

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

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, HYDERABAD BENCHES, HYDERABAD

Before: SANJAY GARG & SHRI MADHUSUDAN SAWDIA

Per Sanjay Garg, Judicial Member:

The captioned appeals have been preferred by the Revenue against the separate orders of the Learned Commissioner of Income Tax (Appeals)-12, Hyderabad (hereinafter referred to as “Ld. CIT(A)”), dated 15/04/2026 and for the Assessment Year (AY) 2015-16 and 2016-17, respectively.

ITA 2318 & 2319/HYD

The order continues below.

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