Perg Advertising Pvt. Ltd. Vs DCIT (ITAT Mumbai)
The assessee faced penalty under Section 271(1)(c) based on additions arising from alleged bogus purchases, where only the profit element (12.5%) was estimated and added.
The ITAT held that such additions are purely on estimate basis, without concrete evidence of concealment or furnishing inaccurate particulars. Relying on settled judicial precedents, it reiterated that penalty cannot be levied on estimated additions, especially when purchases are not fully disallowed but only profit is estimated.
Accordingly, the Tribunal deleted the penalty for AY 2010-11. For AY 2011-12, since the CIT(A) failed to consider assessee’s submissions, the matter was set aside for fresh adjudication
FULL TEXT OF THE ORDER OF ITAT MUMBAI
1. These are two appeals preferred by the same Assessee challenging the Order passed by the National Faceless Appeal Centre (NFAC), Delhi confirming the Penalty levied under Section 271(1)(c) of the Act. The appeals were heard together and are being disposed off by way of common order.
2. We would first take-up appeal for the Assessment Year 2010-2011.
ITA No.76/MUM/2026 (Assessment Year 2010-2011)
3. The present appeal preferred by the Assessee is directed against the Order, dated 15/12/2025, passed by the National Faceless Appeal Centre (NFAC), Delhi [hereinafter referred to as the ‘CIT(A)’] whereby Learned CIT(A) had dismissed the appeal against the Penalty Order, dated 31/03/2017, passed under Section 271(1)(c) of the Income Tax Act, 1961 [hereinafter referred to as ‘the Act’], for the Assessment Year 2010-2011.
