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Facts
The assessee appealed against a penalty levied under section 271(1)(c) of the Income-tax Act, 1961. The initial addition was for alleged bogus purchases, which was restricted by the CIT(A) to an estimated profit element of 12.5%. The ITAT had upheld this reduced addition in the quantum appeal.
Held
The Tribunal held that penalty under section 271(1)(c) is not leviable when the addition sustained is based purely on estimation, rather than on concrete evidence of concealment or inaccurate particulars. The Tribunal relied on consistent rulings from various High Courts and its coordinate benches.
Key Issues
Whether penalty under section 271(1)(c) is sustainable when the addition to income is based on an estimated profit element, not on direct proof of concealment or inaccurate particulars.
Sections Cited
271(1)(c), 271(1)
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Before: SHRI NARENDER KUMAR CHOUDHRY & SHRI PRABHASH SHANKAR
PER PRABHASH SHANKAR [A.Μ.] :- The present appeal arising from the appellate order dated 18.09.2025 is filed by the assessee against the order passed by the Learned Commissioner of Income-tax (Appeals)/National Faceless Appeal Centre, Delhi [hereinafter referred to as “CIT(A)