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“penalty u/s 271(1)(c)”

PenaltySection 271(1)(c)Section 271(1)(c)2,277 judgments

The decision most relied on for penalty u/s 271(1)(c) is CIT v. Atul Mohan Bindal (9 SCC 589), cited in 200 judgments on BharatTax.

Leading authorities on penalty u/s 271(1)(c)

CIT v. Atul Mohan Bindal

9 SCC 589 · 2009 · Supreme Court

citing judgments

The Supreme Court clarifies the scope of penalty under Section 271(1)(c), holding that for its applicability, conditions stated in the provision must strictly exist, and making an incorrect claim in law does not automatically amount to furnishing inaccurate particulars of income.

CIT v. Subhash Trading Co. Ltd.

221 ITR 110 · 1996 · High Court

citing judgments

Penalty under Section 271(1)(c) of the Income Tax Act cannot be levied when an addition to income is based purely on an estimate, without concrete evidence proving concealment of income or furnishing of inaccurate particulars.

Prasanna Dugar v. CIT

70 Taxmann.com 175 · 2016 · Supreme Court

citing judgments

Penalty under section 271(1)(c) can be levied even if the assessee voluntarily discloses income after detection by the department or subsequent to a search, especially when the explanation provided is not bona fide or cannot be substantiated.

Ganga Iron & Steel Trading Co. v. Commissioner of Income Tax

135 Taxmann.com 244 · 2022 · High Court

citing judgments

A notice imposing penalty under section 271(1)(c) of the Income Tax Act is invalid if it shows non-application of mind by the Assessing Officer regarding the specific grounds for levying the penalty.

CIT v. Dhillon Rice Mills

256 ITR 447 · 2002 · High Court

citing judgments

Penalty under section 271(1)(c) is not leviable when additions to income are made on the basis of estimation, rather than on concrete evidence of concealment. Deletion of such a penalty is upheld.

ACIT v. Gebilal Kanhaialal HUF

348 ITR 561 · 2012 · Supreme Court

citing judgments

Section 271AAA penalty deletion can be based on the Apex Court's decision in ACIT v. Gebilal Kanhaialal HUF (2012) 348 ITR 561, particularly when there was no specific question put to the assessee about the manner of earning undisclosed income.

CIT v. Norton Electronics Systems (P) Ltd.

41 Taxmann.com 280 · 2014 · High Court

citing judgments

Penalty under Section 271(1)(c) is not sustainable when the income addition is made on an estimated basis without clinching material suggesting concealment or inaccurate particulars.

New Holland Tractors (India) (P.) Ltd. v. CIT

49 Taxmann.com 573 · 2014 · High Court

citing judgments

The charge of concealment of income and furnishing of inaccurate particulars of income may overlap. A taxpayer's conduct can be considered bonafide even if their submissions were rejected in the quantum appeal.

Judgments citing penalty u/s 271(1)(c)

Dy. Commissioner of Income Tax, Mumbai vs. Kanakia Spaces Realty Private Limited, Mumbai

In the result, the appeal filed by the Revenue is dismissed

ITA 6133/MUM/2025[2011-12]Status: DisposedITAT Mumbai20 Jan 2026AY 2011-12

Bench: Shri Om Prakash Kant () & Shri Sandeep Singh Karhail () Assessment Year: 2011-12 Dy. Commissioner Of Income Tax Kanakia Spaces Realty Room No. 420, Kautilya Bhawan, Private Limited Vs. G Block, Bandra Kurla Complex, Plot No. 8, Vilco Centre, 3Rd Mumbai- 400051 Floor, Subhash Road, Opp Garware House, Vile Parle East, Mumbai- 400057 Pan No. Aaccc 4199 F Appellant Respondent Assessee By : Ms. Shweta Vardhan : Shri. Hemanshu Joshi, Sr Dr Revenue By Date Of Hearing : 25/11/2025 : 20/01/2026 Date Of Pronouncement Order

For Appellant: Ms. Shweta Vardhan

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

donation of Kanakia Spaces Realty Private Limited Kanakia Spaces Realty Private Limited Rs. 3,00,00,000/-, The AO has also initiated penalty u/s 271(1)(c) of Rs. 3,00,00,000/ , The AO has also initiated penalty u/s 271(1)(c) of the Act in assessment order ... assessment order u/s 143(3) r.w.s 147 dated has quashed the assessment order u/s 143(3) r.w.s 147 dated 21.03.2016, then the penalty u/s 271(1)(c) of the Act levied by the AO 21.03.2016, then the penalty u/s 271(1)(c) of the Act levied

DCIT-3(1)(1), Mumbai vs. Relcon Infraprojects Ltd., Mumbai

ITA 7070/MUM/2025[2020-21]Status: DisposedITAT Mumbai19 Jan 2026AY 2020-21

Bench: SHRI VIKRAM SINGH YADAV, ACCOUNTANT MEMBER SHRI RAHUL CHAUDHARY (Judicial Member)

For Appellant: Shri Ravikant PathakFor Respondent: Shri Annavaran Kosuri

Section 132Section 143(3)Section 153ASection 270ASection 271(1)(c)Section 68

additions sustained on estimate basis. It is an accepted fact that whenever an addition is made on the basis of estimate, penalty u/s 271(1)C is not leviable. There is no scope to levy penalty under the said section. Accordingly, in the given set of facts, the penalty levied ... purchase by CIT(A) and ITAT. Thus, it is clear that the additions all through have been made on estimation basis. The penalty u/s 271(1)(c) of the Act has been levied on the estimated addition by the AO, which has been deleted

DCIT-3(1)(1), Mumbai vs. Relcon Infraprojects Ltd., Mumbai

ITA 7069/MUM/2025[2019-20]Status: DisposedITAT Mumbai19 Jan 2026AY 2019-20

Bench: SHRI VIKRAM SINGH YADAV, ACCOUNTANT MEMBER SHRI RAHUL CHAUDHARY (Judicial Member)

For Appellant: Shri Ravikant PathakFor Respondent: Shri Annavaran Kosuri

Section 132Section 143(3)Section 153ASection 270ASection 271(1)(c)Section 68

additions sustained on estimate basis. It is an accepted fact that whenever an addition is made on the basis of estimate, penalty u/s 271(1)C is not leviable. There is no scope to levy penalty under the said section. Accordingly, in the given set of facts, the penalty levied ... purchase by CIT(A) and ITAT. Thus, it is clear that the additions all through have been made on estimation basis. The penalty u/s 271(1)(c) of the Act has been levied on the estimated addition by the AO, which has been deleted

DCIT-3(1)(1), Mumbai vs. Relcon Infraprojects Ltd., Mumbai

ITA 7068/MUM/2025[2018-19]Status: DisposedITAT Mumbai19 Jan 2026AY 2018-19

Bench: SHRI VIKRAM SINGH YADAV, ACCOUNTANT MEMBER SHRI RAHUL CHAUDHARY (Judicial Member)

For Appellant: Shri Ravikant PathakFor Respondent: Shri Annavaran Kosuri

Section 132Section 143(3)Section 153ASection 270ASection 271(1)(c)Section 68

additions sustained on estimate basis. It is an accepted fact that whenever an addition is made on the basis of estimate, penalty u/s 271(1)C is not leviable. There is no scope to levy penalty under the said section. Accordingly, in the given set of facts, the penalty levied ... purchase by CIT(A) and ITAT. Thus, it is clear that the additions all through have been made on estimation basis. The penalty u/s 271(1)(c) of the Act has been levied on the estimated addition by the AO, which has been deleted

DCIT-3(1)(1), Mumbai vs. Relcon Infraprojects Ltd., Mumbai

ITA 7067/MUM/2025[2017-18]Status: DisposedITAT Mumbai19 Jan 2026AY 2017-18

Bench: SHRI VIKRAM SINGH YADAV, ACCOUNTANT MEMBER SHRI RAHUL CHAUDHARY (Judicial Member)

For Appellant: Shri Ravikant PathakFor Respondent: Shri Annavaran Kosuri

Section 132Section 143(3)Section 153ASection 270ASection 271(1)(c)Section 68

additions sustained on estimate basis. It is an accepted fact that whenever an addition is made on the basis of estimate, penalty u/s 271(1)C is not leviable. There is no scope to levy penalty under the said section. Accordingly, in the given set of facts, the penalty levied ... purchase by CIT(A) and ITAT. Thus, it is clear that the additions all through have been made on estimation basis. The penalty u/s 271(1)(c) of the Act has been levied on the estimated addition by the AO, which has been deleted

DCIT-3(1)(1), Mumbai vs. Relcon Infraprojects Ltd., Mumbai

ITA 7066/MUM/2025[2016-17]Status: DisposedITAT Mumbai19 Jan 2026AY 2016-17

Bench: SHRI VIKRAM SINGH YADAV, ACCOUNTANT MEMBER SHRI RAHUL CHAUDHARY (Judicial Member)

For Appellant: Shri Ravikant PathakFor Respondent: Shri Annavaran Kosuri

Section 132Section 143(3)Section 153ASection 270ASection 271(1)(c)Section 68

additions sustained on estimate basis. It is an accepted fact that whenever an addition is made on the basis of estimate, penalty u/s 271(1)C is not leviable. There is no scope to levy penalty under the said section. Accordingly, in the given set of facts, the penalty levied ... purchase by CIT(A) and ITAT. Thus, it is clear that the additions all through have been made on estimation basis. The penalty u/s 271(1)(c) of the Act has been levied on the estimated addition by the AO, which has been deleted

DCIT 3(1)(1), Mumbai vs. Relcon Infraprojects Ltd, Mumbai

ITA 7065/MUM/2025[2015-16]Status: DisposedITAT Mumbai19 Jan 2026AY 2015-16

Bench: SHRI VIKRAM SINGH YADAV, ACCOUNTANT MEMBER SHRI RAHUL CHAUDHARY (Judicial Member)

For Appellant: Shri Ravikant PathakFor Respondent: Shri Annavaran Kosuri

Section 132Section 143(3)Section 153ASection 270ASection 271(1)(c)Section 68

additions sustained on estimate basis. It is an accepted fact that whenever an addition is made on the basis of estimate, penalty u/s 271(1)C is not leviable. There is no scope to levy penalty under the said section. Accordingly, in the given set of facts, the penalty levied ... purchase by CIT(A) and ITAT. Thus, it is clear that the additions all through have been made on estimation basis. The penalty u/s 271(1)(c) of the Act has been levied on the estimated addition by the AO, which has been deleted

DCIT-3(1)(1), Mumbai vs. Relcon Infraprojects Ltd., Mumbai

ITA 7064/MUM/2025[2014-15]Status: DisposedITAT Mumbai19 Jan 2026AY 2014-15

Bench: SHRI VIKRAM SINGH YADAV, ACCOUNTANT MEMBER SHRI RAHUL CHAUDHARY (Judicial Member)

For Appellant: Shri Ravikant PathakFor Respondent: Shri Annavaran Kosuri

Section 132Section 143(3)Section 153ASection 270ASection 271(1)(c)Section 68

additions sustained on estimate basis. It is an accepted fact that whenever an addition is made on the basis of estimate, penalty u/s 271(1)C is not leviable. There is no scope to levy penalty under the said section. Accordingly, in the given set of facts, the penalty levied ... purchase by CIT(A) and ITAT. Thus, it is clear that the additions all through have been made on estimation basis. The penalty u/s 271(1)(c) of the Act has been levied on the estimated addition by the AO, which has been deleted

Pramod Kumar Gupta, Bhopal vs. DCIT Circle 5 (1)- Bhopal, Bhopal

In the result appeal of the assessee is allowed, penalty is

ITA 690/IND/2025[2010-11]Status: DisposedITAT Indore16 Jan 2026AY 2010-11

Bench: Shri B.M. Biyani & Shri Paresh M Joshi

Section 143(3)Section 145Section 145(3)Section 246ASection 250Section 253Section 271(1)(c)

dated 28.03.2013. It is pertinent to mention that in para 5 of the “Impugned Assessment Order” it is recorded as under:- “Penalty u/s 271(1)(c) is being initiated separately.” 2.3 That the assessee being aggrieved by the aforesaid “Impugned Penalty Order” dated 31.03.2017 prefers the first appeal u/s 246A ... u/s 271(1)(C) either about “concealment of income” or “about furnishing of inadequate particulars”. It was also finally submitted that no penalty u/s 271(1)(C) can be imposed basis estimation. Per Page 8 of 16 Pramod Kumar Gupta ITA No. 690/Ind/2025 - A.Y.2010-11 contra the Id. DR has placed

Axis Bank Limited, Ahmedabad vs. The ACIT, Circle-1(1)(1), Ahmedabad

In the result, the appeal of the assessee is partly allowed

ITA 1125/AHD/2025[2015-16]Status: DisposedITAT Ahmedabad16 Jan 2026AY 2015-16

Bench: Ms. Suchitra Raghunath Kamble & Shri Narendra Prasad Sinha

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

income under the Act, which was confirmed by Ld. CIT as well as by the Tribunal. Thereafter the AO had imposed the penalty u/s 271(1)(c) of the Act for furnishing the wrong particulars of income by the assessee. 7. The Ld. Sr. Counsel submitted, at the outset, that ... proceedings are different and merely because the addition has been confirmed in appeal, the same cannot be a ground for levy of penalty u/s 271(1)(c) of the Act. Submissions of the Revenue: 11. Per contra, Shri. Sher Singh, the ld. Sr. DR submitted that the AO had initiated

Axis Bank Limited, Ahmedabad vs. The ACIT, Circle-1(1)(1), Ahmedabad

In the result, the appeal of the assessee is partly allowed

ITA 1124/AHD/2025[2014-15]Status: DisposedITAT Ahmedabad16 Jan 2026AY 2014-15

Bench: Ms. Suchitra Raghunath Kamble & Shri Narendra Prasad Sinha

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

income under the Act, which was confirmed by Ld. CIT as well as by the Tribunal. Thereafter the AO had imposed the penalty u/s 271(1)(c) of the Act for furnishing the wrong particulars of income by the assessee. 7. The Ld. Sr. Counsel submitted, at the outset, that ... proceedings are different and merely because the addition has been confirmed in appeal, the same cannot be a ground for levy of penalty u/s 271(1)(c) of the Act. Submissions of the Revenue: 11. Per contra, Shri. Sher Singh, the ld. Sr. DR submitted that the AO had initiated

Axis Bank Limited, Ahmedabad vs. The ACIT, Circle-1(1)(1), Ahmedabad

In the result, the appeal of the assessee is partly allowed

ITA 1123/AHD/2025[2013-14]Status: DisposedITAT Ahmedabad16 Jan 2026AY 2013-14

Bench: Ms. Suchitra Raghunath Kamble & Shri Narendra Prasad Sinha

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

income under the Act, which was confirmed by Ld. CIT as well as by the Tribunal. Thereafter the AO had imposed the penalty u/s 271(1)(c) of the Act for furnishing the wrong particulars of income by the assessee. 7. The Ld. Sr. Counsel submitted, at the outset, that ... proceedings are different and merely because the addition has been confirmed in appeal, the same cannot be a ground for levy of penalty u/s 271(1)(c) of the Act. Submissions of the Revenue: 11. Per contra, Shri. Sher Singh, the ld. Sr. DR submitted that the AO had initiated

Axis Bank Limited, Ahmedabad vs. The ACIT, Circle-1(1)(1), Ahmedabad

In the result, the appeal of the assessee is partly allowed

ITA 1122/AHD/2025[2012-13]Status: DisposedITAT Ahmedabad16 Jan 2026AY 2012-13

Bench: Ms. Suchitra Raghunath Kamble & Shri Narendra Prasad Sinha

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

income under the Act, which was confirmed by Ld. CIT as well as by the Tribunal. Thereafter the AO had imposed the penalty u/s 271(1)(c) of the Act for furnishing the wrong particulars of income by the assessee. 7. The Ld. Sr. Counsel submitted, at the outset, that ... proceedings are different and merely because the addition has been confirmed in appeal, the same cannot be a ground for levy of penalty u/s 271(1)(c) of the Act. Submissions of the Revenue: 11. Per contra, Shri. Sher Singh, the ld. Sr. DR submitted that the AO had initiated

Axis Bank Limited, Ahmedabad vs. The ACIT, Circle-1(1)(1), Ahmedabad

In the result, the appeal of the assessee is partly allowed

ITA 1121/AHD/2025[2011-12]Status: DisposedITAT Ahmedabad16 Jan 2026AY 2011-12

Bench: Ms. Suchitra Raghunath Kamble & Shri Narendra Prasad Sinha

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

income under the Act, which was confirmed by Ld. CIT as well as by the Tribunal. Thereafter the AO had imposed the penalty u/s 271(1)(c) of the Act for furnishing the wrong particulars of income by the assessee. 7. The Ld. Sr. Counsel submitted, at the outset, that ... proceedings are different and merely because the addition has been confirmed in appeal, the same cannot be a ground for levy of penalty u/s 271(1)(c) of the Act. Submissions of the Revenue: 11. Per contra, Shri. Sher Singh, the ld. Sr. DR submitted that the AO had initiated

Prem Lata Verma, Aligarh, Uttar Pradesh vs. DCIT, Circle 4(1)(1), Aligarh, Uttar Pradesh

In the result, assessee’s appeal is allowed

ITA 441/AGR/2025[2016-17]Status: DisposedITAT Agra15 Jan 2026AY 2016-17

Bench: : Shri S. Rifaur Rahman & Shri Sunil Kumar Singhassessment Year: 2016-17

Section 10(1)Section 139Section 144Section 147Section 148Section 234BSection 250Section 271(1)(c)Section 68

assessee. 5. Ground No. 5: That the Ld. AO has erred in law as well as on facts by levying the penalty u/s 271(1)(c) of the Act and by charging the interest u/s 234B of the Act. Ground No. 6: That the appellant reserves the right

Klin Industries, Sandha Khamidana, Junagadh vs. The ACIT, Circle, Junagadh

In the result, the appeal of the assessee is allowed

ITA 857/RJT/2025[2014-15]Status: HeardITAT Rajkot15 Jan 2026AY 2014-15

Bench: Dr. Arjun Lal Saini

For Appellant: Shri R.B. Shah, ARFor Respondent: Shri Gopi Nath Chaubey, Sr. DR

Section 115JSection 142(1)Section 143(3)Section 144Section 147Section 148Section 250Section 271(1)(c)Section 273BSection 80J

upon the various judgments, the assessing officer had concluded that the case of the assessee was a fit case for levying of penalty u/s 271(1)(c) of the Act. Accordingly, the assessing officer ITA No. 857/Rjt/2025 A.Y 14-15 Klin Industries was satisfied that the case of the assessee ... case for levy of penalty u/s 271(1)(c) of the Act, for concealment of particulars income of Rs.20,70,660/- and therefore assessing officer levied penalty of Rs.6,21,198/-, being 100% of tax sought to be evaded. 4. Aggrieved by the order of the Assessing Officer, the assessee

Income Tax Officer 2(1), Bhopal vs. Devi Singh, Bhopal

Appeal is dismissed being devoid of any

ITA 201/IND/2024[2010-11]Status: DisposedITAT Indore13 Jan 2026AY 2010-11

Bench: Shri Siddhartha Nautiyal & Shri B.M. Biyani

Section 142(1)Section 144Section 147Section 148Section 2(14)Section 271(1)(c)

dismissed revenue’s quantum-appeal and upheld the CIT(A)’s order deleting the addition of capital gain made by AO, the penalty u/s 271(1)(c) cannot survive in absence of underlying addition. Hence, we also approve the order passed by Ld. CIT(A) deleting the impugned penalty

Income Tax Officer 2(1), Bhopal vs. Devi Singh, Bhopal

Appeal is dismissed being devoid of any

ITA 20/IND/2024[2010-11]Status: DisposedITAT Indore13 Jan 2026AY 2010-11

Bench: Shri Siddhartha Nautiyal & Shri B.M. Biyani

Section 142(1)Section 144Section 147Section 148Section 2(14)Section 271(1)(c)

dismissed revenue's quantum-appeal and upheld the CIT(A)'s order deleting the addition of capital gain made by AO, the penalty u/s 271(1)(c) cannot survive in absence of underlying addition. Hence, we also approve the order passed by Ld. CIT(A) deleting the impugned penalty

Prime Products Limited, Kanpur vs. D.C.I.T. Circle 2(1)(1), Kanpur

In the result, the appeal of the assessee is allowed for statistical purposes

ITA 514/LKW/2025[2013-14]Status: DisposedITAT Lucknow13 Jan 2026AY 2013-14

Bench: Sh. Kul Bharat & Sh. Nikhil Choudharya.Y. 2013-14 M/S Prime Products Ltd., 87/8, Kalpi Vs. The Dy. Cit, Road, Kanpur Circle-2(1)(1), Kanpur Pan: Aaacp8239K (Appellant) (Respondent) Assessee By: Sh. Ashish Jaiswal, C.A. Revenue By: Sh. R.R.N. Shukla, Addl Cit Dr Date Of Hearing: 28.10.2025 Date Of Pronouncement: 13.01.2026 O R D E R Per Nikhil Choudhary, A.M.: This Is An Appeal Filed By The Assessee Against The Orders Of The Ld. Cit(A), Nfac In Confirming The Penalty Under Section 271(1)(C) Levied By The Ld. Assessing Officer On 23.01.2022 For The Assessment Year 2013-14. The Grounds Of Appeal Are As Under:- “1. That On The Facts & In Law, The Order Passed By Ld. Cit (Appeals), Nfac U/S 250 Of The Act Is Bad In Law. 2 That On The Facts & In Law, The Ld. Cit(Appeals), Nfac Has Erred In Upholding Action Of Learned Ao In Levying Penalty Of Rs. 94,000/- Under Section 271(1)(C) Of The Income Tax Act, 1961. 3 That On The Facts & In Law, The Notice Issued For Levy Of Penalty Under Section 274 R.W.S 271(1)(C) Dated 14/02/2020 Is Vague & Defective Since, It Does Not Specify The Limb Under Which Penalty Under Section 271(1)(C) Was Initiated. 4 That On The Facts & In Law, The Ld. Cit(A) Nfac Has Erred In Not Appreciating That The Assessee Had Offered An Explanation. The Penalty Proceedings & The Consequent Order Are Invalid & Void Ab Initio As The Same Were Initiated & Levied Solely On The Basis Of An Affidavit Without Independent Evidence Of Concealment.

For Appellant: Sh. Ashish Jaiswal, C.AFor Respondent: Sh. R.R.N. Shukla, Addl CIT DR

Section 132Section 153ASection 250Section 271(1)Section 271(1)(C)Section 271(1)(c)Section 274Section 69

NFAC HAS FAILED TO APPRECIATE THAT "CONCEALMENT OF INCOME OF RS. 3,13,000/- WAS NEITHER DELIBERATE NOR INTENTIONAL, HENCE THE PENALTY U/S 271(1)(C) IS NOT SUSTAINABLE. 6 THAT THE ALLEGED INCOME OF RS.3,13,000/-ADDED U/S 69 BASED ON SEIZED DOCUMENTS IS ITSELF DISPUTED AND UNDER

Flourish Techno & Real Estate Private Limited, R T Nagar, Bangalore vs. Income Tax Officer- Ward 3(1)(1), ITO, Bangalore

In the result, the appeal filed by the assessee is dismissed

ITA 2435/BANG/2024[2016-17]Status: DisposedITAT Bangalore12 Jan 2026AY 2016-17

Bench: Shri Waseem Ahmed & Shri Soundararajan K.Assessment Year : 2016-17

For Appellant: NoneFor Respondent: Shri Balusamy N, JCIT-DR

Section 142(1)Section 143(2)Section 250Section 271(1)(c)Section 68

wilful and deliberate attempt to avoid tax, on the part of the appellant which is an important condition for imposing penalty u/s 271(1)(c). The Appellant prays to consider his submissions before passing the order in this appeal to meet ends of justice and erase the tax demand assessed