Gunjan Agarwal Vs ITO (ITAT Surat)
Income Tax Appellate Tribunal (ITAT) Surat bench has deleted a penalty of Rs. 1,53,834/- imposed under Section 271(1)(c) of the Income Tax Act, 1961, on Gunjan Agarwal for the Assessment Year 2008-09. The Tribunal’s decision was based on the principle that a penalty for concealment of income or furnishing inaccurate particulars cannot be sustained when the underlying income addition is made purely on an estimated basis.
The assessee had challenged the order of the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi, which had confirmed the penalty. Among the grounds of appeal, the assessee specifically contended that the penalty was levied on additions made through “estimate, guesswork, conjectures and surmises,” and that there was “neither concealment of income nor furnishing of inaccurate particulars” in this regard. The assessee also highlighted that the appellate order was passed ex-parte, without providing a proper opportunity of being heard.
Crucially, the ITAT noted that a significant portion of the original quantum addition of Rs. 5,12,779/- had already been deleted by the Surat Bench of the Tribunal in an earlier order dated May 5, 2019 (ITA No.1451/Ahd/2015). In that quantum appeal, the Tribunal had upheld an addition of only Rs. 36,730/-. This minor remaining addition, as observed by the ITAT in the current penalty appeal, was confirmed “only on estimated basis” by applying a Gross Profit (GP) rate due to a deficit in the quantity of goods sent for job-work versus goods received.
