Ram Lakhan Vs DCIT (ITAT Delhi)
The Income Tax Appellate Tribunal (ITAT) in Delhi recently heard an appeal from Ram Lakhan, a transporter who had a penalty levied against him by the Deputy Commissioner of Income Tax (DCIT) for the Assessment Year 2017-18. The penalty of Rs. 15,601 was imposed under Section 270A of the Income Tax Act, 1961, and was based on an estimated addition of Rs. 1,17,000 to his income. This addition was calculated on the assumption that he operated 13 tempos, while he claimed to own only 10.
Ram Lakhan’s counsel argued that a penalty cannot be levied on an addition to income that is based on estimation rather than actual figures, a principle supported by judicial precedents. The counsel also cited a previous order from a Coordinate Bench of the ITAT dated January 15, 2025, which had ruled in the assessee’s own case that such a penalty was unsustainable. The Department’s representative could not counter this argument.
Considering these arguments and the precedent set by the Coordinate Bench, the ITAT found the penalty to be legally unsustainable. Consequently, the tribunal quashed the penalty and allowed the assessee’s appeal. The order was pronounced on May 30, 2025.
