ITA No. 4056/MUM/2024

Parties Involved

Facts Summary

Briefly stated, facts of the case are that in view of information received by the Assessing Officer that the assessee had obtained bogus accommodation entry bills, the Assessing Officer in the assessment completed u/s 143(3) r.w.s. 147 of the Act dated 12.03.2016 made the addition amounting to Rs.11,30,963/- and initiated the penalty proceedings for furnishing inaccurate particulars of income. On further appeal by the assessee against the addition made in the assessment order, the Ld. First Appellate Authority partly confirm the addition to the extent of Rs.1,41,374/- (being 12.5% of Rs.11,30,995/-). In view of the part disallowance sustained by the Ld. CIT(A), the Assessing Officer issued a fresh show cause notice proposing to levy of penalty u/s 271(1)(c) of the Act. The assessee submitted his explanation before the Assessing Officer, but the submissions of the assessee were rejected and the AO held the assessee was guilty of filing inaccurate particulars under the provisions of Act and liable for levy of penalty ranging from 100% of the tax sought to be evaded to 300% of tax sought to be evaded. The Assessing Officer noted that assessee had deliberately misguided the revenue by indulging fraudulent method for inflating the expenses showing bogus purchases to reduce the income and therefore, he levied penalty @ 300% of tax sought to be evaded amounting to Rs.1,31,052/-. On further appeal, the Ld. CIT(A) deleted the penalty following the decision of the Hon’ble Madras High C…

Legal Issues

• 1. Whether penalty can be levied for additions made on estimate basis?

Judgment Outcome

Decided in favour of Revenue.

Precedents Relied Upon

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