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Facts
The assessee appealed an order confirming a penalty levied under Section 271(1)(c) of the Income Tax Act. The penalty was based on additions made for unverified purchases, which were later restricted by the Tribunal to 12.5% as the profit element.
Held
The Tribunal held that the penalty was validly levied as the additions were on account of bogus purchases, and only the profit element was added, indicating concealment of income. The contention that the penalty was levied on estimated profits was rejected.
Key Issues
Whether penalty under Section 271(1)(c) is leviable when the addition is restricted to the profit element of bogus purchases, and not on estimated profits.
Sections Cited
271(1)(c), 143(3), 147
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Income Tax Appellate Tribunal, “G” BENCH, MUMBAI
Before: SHRI SAKTIJIT DEY, HON’BLE & SHRI NARENDRA KUMAR BILLAIYA, HON’BLE
O R D E R
PER NARENDRA KUMAR BILLAIYA, AM:
This appeal by the assessee is preferred against the order dated 01/10/2024 by NFAC, Delhi [hereinafter ‘the ld. CIT(A)], pertaining to AY 2009-10.
The sum and substance of the grievance of the assessee is that the ld. CIT(A) erred in confirming the levy of penalty u/s 271(1)(c) of the Act amounting to Rs. 1,84,771/- on alleged estimated profits on the addition of unverified purchases. The roots of the levy of penalty lie in the assessment order dated 30/03/2015 framed u/s 143(3) r.w.s. 147 of the Act wherein, during the course of the scrutiny assessment proceedings, on the basis of the information received from the Sales-tax authorities, the AO came to know that the assessee has made bogus