Mumbai ITAT Deletes Section 270A Penalty on Estimated Income and Defective Show-Cause Notice

Advertisement Balaji Chain Vs ITO (ITAT Mumbai) Mumbai ITAT Deletes Section 270A Penalty on Estimated Income and Defective Show-Cause Notice The Mumbai ITAT deleted a penalty of ₹32.89 lakh levied under Section 270A, holding that penalty cannot survive where the underlying addition is based merely on estimation of income. The Assessing Officer had alleged out-of-books transactions of ₹13.44 crore, rejected the books of account, and estimated profit at 3.5%, resulting in an addition of ₹47.06 lakh. The Tribunal observed that when income is ultimately determined on an estimated basis, i...