Paranjape Pendse Associates Vs. DCIT, Circle – 3, Pune

Parties Involved

Facts Summary

The assessee, a partnership firm engaged in the business of builders and developers, filed its return of income on 26.11.2014 declaring total income of Rs.22,54,389/-. The case was selected for scrutiny under CASS, and statutory notices under sections 143(2) and 142(1) of the Income Tax Act, 1961 were issued. However, there was non-compliance from the assessee, leading the Assessing Officer to complete the assessment under sections 144 r.w.s. 143(3) of the Act on 20.12.2016. The Assessing Officer determined the total income at Rs.1,90,22,532/- and made several additions, including adhoc disallowance of 20% of total expenses, disallowance of 20% of unsecured loans, and addition on account of sale of immovable property. The CIT(A) deleted some of these additions in appeal, but sustained an addition of Rs.2,50,000/- on lump sum. The Assessing Officer levied a penalty of Rs.57,69,152/- under section 271(1)(c) of the Act, which was confirmed by the CIT(A) / NFAC. The assessee appealed against this order.…

Legal Issues

• 1. Whether the penalty levied under section 271(1)(c) of the Act is justified.

Judgment Outcome

Decided in favour of Assessee.

Precedents Relied Upon

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