SH. JOGENDRA KUMAR,MUZAFFARNAGAR vs. ITO, MUZAFFARNAGAR

The only grievance of the assessee in this appeal relates to the sustenance of penalty of Rs. 5,024/- levied by the AO u/s 271(1)(c) of the Income Tax Act, 1961 (hereinafter referred to as the Act).

Facts of the case in brief are that the assessee filed the return of income on 30.09.2008 declaring taxable income of Rs. 2,49,360/-. However, the assessment was framed at an income of Rs. 3,06,092/- by estimating enhanced figures of gross receipts. On the appeal of the 2 Jogendra Kumar assessee, the ld. CIT(A), Muzaffarnagar had allowed part relief and consequently taxable income was determined at Rs. 2,65,620/-. The AO initiated the penalty proceedings u/s 271(1)(c) of the Act because there was difference of Rs. 16,260/- between the income shown in the return of income and as determined after the order of the First Appellate Authority. The AO levied the penalty of Rs. 5,024/- u/s 271(1)(c) of the Act.

Being aggrieved the assessee carried the matter to the ld. CIT(A) who sustained the penalty.

Now the assessee is in appeal. The ld. Counsel for the assessee submitted that there was no concealment of income and the income was determined by the AO as well as by the ld. CIT(A) on the basis of estimation, therefore, penalty u/s 271(1)(c) of the Act was not leviable.

In his rival submissions the ld. DR supported the order of the authorities below.

I have considered the submissions of both the parties and carefully gone through the material available on the record. In the present case, it is an admitted fact that the AO made the addition by an estimating the enhanced figures of the gross receipts shown by the assessee. The ld. CIT(A) also sustained the addition on estimate basis. In the instant case when the income has been determined on estimate basis, it cannot be 3 Jogendra Kumar said that the assessee concealed the income or furnished inaccurate particulars of income. Therefore, the penalty levied u/s 271(1)(c) of the Act on estimated addition was not justified. It is also noticed that the AO in the penalty order nowhere stated that the assessee concealed the income or furnished inaccurate particulars of income. He levied the penalty u/s 271(1)(c) of the Act by simply stating that there was difference of Rs. 16,260/- between the income shown in the return of income as determined after appeal. I, therefore, considering the totality of the facts as discussed hereinabove delete the penalty levied by the AO and sustained by the ld. CIT(A) amounting to Rs. 5,024 u/s 271(1)(c) of the Act.

In the result, the appeal of the assessee is allowed. (Order Pronounced in the Court on 30/11/2015)