Penalty cannot be levied on income assessed on estimation basis

The assessee company is engaged in the business of construction work. The Assessing Officer applied provisions of section 145 of the Act and computed the total income at 5% of turnover and levied penalty u/s 271(1) (c) of the Act. According to circumstances of the case, the Hon’ble High Court relied on the decision pronounced in case of CIT vs. Vatika Construction P.Ltd. ITA 1246/2010 in which it was held that the Assessing Officer did not have the benefit of material, and therefore could not have, only on the basis of the assessee’s offer to be taxed at 8% on gross receipts, have conclud...