ITAT deletes Addition and Penalty u/s 271(c) on Estimated Income [Read Order]

The  New Delhi Bench of the Income Tax Appellate Tribunal (ITAT) recently deleted the addition and penalty under section 211(c) of the Income Tax Act 1961, on estimated income.

An application was filed by the assessee Mohd. Jawed,for condoning the delay of 798 days. The tribunal considered the fact that the assessee was a senior citizen and was undergoing treatment for a heart ailment.

 Additionally, they took into account that the assessee had sent the appeal memo to the registry, along with the appeal fee, on 14/12/2018 itself. Although filing the appeal through courier service was not permissible, the tribunal adopted a liberal view considering the age and health conditions of the assessee. As a result, the delay of 798 days in filing the appeal was condoned

The assessment order under Section  147/144 was passed on total income of Rs. 16,85,210/- the penalty proceedings under Section  271 (1)(c) of the Income Tax Act were initiated for furnishing inaccurate particulars of income and concealment of income. During the penalty proceedings, the Assessing Officer  imposed a penalty of Rs. 28,000/-. The order passed under Section 271(1)(c) had been challenged by the assessee before the CIT(A), the. CIT(A)  dismissed the appeal filed by the Assessee.

Counsel for the Assessee P. N. Bhatia brought to the notice of the Bench that the Assessee had preferred an Appeal against the assessment order  before the CIT(A) wherein the Appeal has been partly allowed by the CIT(A) and upheld the addition of Rs. 4,30,010/- and the addition made on account of cash deposit of Rs. 12,55,200/- has been deleted.

He also contended that the penalty proceedings had been initiated on the estimations worked out by the Department after giving appeal effect to the order of CIT(A). Therefore submitted that no penalty proceedings are maintainable on the estimated addition.

Counsel for the revenue S. L. Anuragi  had not disputed the above facts but relied on the orders of the Lower Authorities and prayed for dismissal of the Appeal.

The bench, consisting of two members, a Judicial Member Yogesh Kumar and an Accountant Member Anil Chaturvedi, observed that the additions were made/sustained by the CIT(A) on the basis of estimation and the penalty cannot be levied on the basis of estimated additions and therefore, the Assessee cannot be subjected to levying penalty.

In result, the appeal filed by the assessee was allowed.

To Read the full text of the Order CLICK HERE

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