ASHOK PATIL,PUNE vs. INCOME-TAX OFFICER, WARD - 2 (2), JALGAON

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ITA 1118/PUN/2019Status: DisposedITAT Pune19 July 2022AY 2012-133 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 disallowance of expenditure on an estimation basis, without evidence of deliberate concealment or furnishing inaccurate particulars of income, does not warrant a penalty under Section 271(1)(c). Therefore, the levy of penalty was not justified.

What were the facts?

The Assessing Officer disallowed 40% of the total expenditure claimed by the assessee on an estimation basis. The CIT(A) confirmed this disallowance. The assessee appealed against the penalty levied under Section 271(1)(c) based on this disallowance.

What were the issues?

Whether penalty under Section 271(1)(c) is sustainable when the disallowance of expenditure is based on estimation and there is no evidence of deliberate concealment or furnishing inaccurate particulars of income.

Which sections of the Income-tax Act were involved?

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

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “A” BENCH, PUNE

Before: SHRI INTURI RAMA RAO & SHRI S.S. VISWANETHRA RAVI

For Appellant: Shri K. Srinivasan
For Respondent: Shri Arvind Desai

आदेश / ORDER

PER S.S. VISWANETHRA RAVI, JM :

1.

This appeal by the assessee against the order dated 27-05-2019 passed by the Commissioner of Income Tax (Appeals)-1, Nashik [‘CIT(A)’] for assessment year 2012-13.

2.

The assessee raised four grounds of appeal amongst which the only issue emanates for our consideration is as to whether the CIT(A) is justified in confirming the penalty levied u/s. 271(1)(c) of the Act in the facts and circumstances of the case.

3. Heard both the parties and perused the material available on record. The AO in his order passed u/s. 143(3) r.w.s. 147 of the Act made disallowance of expenditure @ 40% out of total expenditure claimed vide Para No. 9 of his order. The CIT(A) confirmed the same. The contention of ld. AR, Shri K. Srinivasan is that the penalty as imposed u/s. 271(1)(c) of the Act is not maintainable on the basis of estimation of expenditure and placed reliance on the decision of ITAT, Lucknow Bench in the case of Pankaj Kumar Gupta in for A.Y. 2012-13. The ld. DR, Shri Arvind Desai placed reliance on the order of CIT(A). Admittedly, the AO disallowed expenditure as claimed by the assessee on estimation basis. The AO disallowed such expenditure on estimation basis for not furnishing supporting claim and it is not safe to conclude that the assessee has deliberately concealed the income or furnished inaccurate particulars of income. The AO did not bring on record to show that there was any malafide intention on the part of the assessee in concealing the income or furnishing in accurate particulars of income and there was omission while filing the return of income. Therefore, in view of the same, levy of penalty in the present case is not warranted and the order of CIT(A) is not justified. Thus, the grounds raised by the assessee are allowed.

4.

In the result, the appeal of assessee is allowed.

Order pronounced in the open court on 19th July, 2022.

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