INCOME TAX ACT, 1961

Section 271(1)(c)

Penalty under section 271(1)(c) - Penalty proceeding under section 271(1)(c) initiated for furnishing inaccurate particular of income - Quantification of alleged concealment was only on estimate basis -

Case of the revenue was that during the course of assessment proceeding upon perusal of the evidences in respect of profit disclosed by assessee, it was found that vouchers for expenditure were not kept upto the mark or were not maintained properly. While agreeing with the proposal on the part of the assessee for adopting profit @ 8% for addition, AO had never made any observation that there was any gross negligence on the part of assessee to furnish the full details regarding his claim. On the other hand, an addition being 8% of the total contract receipt was made. However, penalty proceeding under section 271(1)(c) initiated for furnishing inaccurate particular of income. Held: Admittedly AO made an addition on estimated basis. It was decided in a number of judgments that when income of assessee was determined on estimation basis of net profit, then no penalty under section 271(1)(c) could be imposed for concealment and furnishing inaccurate particulars. The penalty order was fully silent on the issue as to how the satisfaction of concealment/furnishing of inaccurate particulars of income was arrived at. The quantification of the alleged concealment/inaccurate particulars, was admittedly only an estimate. Needless to mention that it is settled principle of law that penalty is not attracted on estimated additions. Therefore, there was no justification on imposing penalty for concealment of income or furnishing of inaccurate particulars of income.

REFERRED :

FAVOUR : In assessee's favour

A.Y. : 2013-14

APPELLATE TRIBUNAL RULES, 1963

Rule 34

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