ITAT Deletes Section 271(1)(c) Penalty on Estimated Income for Fabric Trader

Pawan Kumar Gupta Vs ITO (ITAT Delhi) In a significant ruling, the Income Tax Appellate Tribunal (ITAT) Delhi has set aside a penalty of Rs. 96.62 lakh imposed on Pawan Kumar Gupta, proprietor of M/s. Garima Trading Co., for Assessment Years 2013-14 and 2014-15. The tribunal held that penalty under Section 271(1)(c) of the Income-tax Act, 1961, cannot be levied on additions made purely on an estimated basis. The case involved an individual engaged in the business of trading in fabrics. The assessment for AY 2013-14 was completed under Section 143(3) of the Act, with the Assessing Officer (AO) ...