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Judgment
PER MADHUMITA ROY, J. M.:
These two instant appeal filed by the assessee are directed against the orders dated 10/10/2025 passed by the Ld. Commissioner of Income-tax (Appeals), Delhi-26 [hereinafter referred to as the Ld. CIT(A)] under Section 250 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) arising out of the Assessment Orders dated 28/12/2021 passed by the Assessment Unit, Income-tax Department (hereinafter referred to as ‘the Ld. AO’) under Section under Section 153C r.w.s. 143(3)of the Act for Assessment Year 2016-17 and 2014-15 respectively.
The appeal is barred by limitation of 57 days in support of which an application for condonation of delay has duly been filed,the content thereof appears to be genuine. Considering the averments made in the condonation applications the delay in filing appeals before us iscondoned.
The grounds of appeal are as under:-
“1.That on the facts and circumstances of the case, Ld. CIT(A)-26, Delhi has grossly erred in law in confirming penalty of Rs. 1,50,084/- u/s 271(1)(c) of the Act. Penalty confirmed by Ld. CIT(A)-26, Delhi is illegal and bad in law & requires to be quashed.
2.That on facts and circumstances of the case, Ld. CIT(A)-26, Delhi has grossly erred in law in confirming penalty of Rs. 1,50,084/- imposed u/s 271(1)(c) of the Act on account of additions made on estimate basis by the Assessing Officer and additions reduced by Ld. CIT(A) again on estimate basis. Additions made on estimate basis could not be treated as concealment of income for the purpose of imposing penalty u/s 271(1)(c) of the Act.
3.That order passed by Ld. CIT(A)-26, Delhi is based on assumptions & presumptions far away from facts of the case. Orders based on assumptions and presumptions are not permitted under law and are void ab-initio.
4.That on facts and circumstances of the case, order passed by Ld. CIT(A)-26, Delhi is illegal and bad in law and has been passed without considering the submissions of the assessee.
5.That the Appellant requests for leave to add or amend the grounds of appeal before the appeal is heard or disposed off.”
The question before us as to whether penalty u/s 271(1)(c) is maintainable having regard to the addition made by the Ld. A.O., on estimate basis which was further confirmed by the Ld. CIT(A) that too on estimate basis. It is the case made out by the assessee that once addition is made on estimation the penalty does not lie as addition was made on assumption and presumption and no concrete finding on the merit of the matter alleging any disqualification of the assessee. In this regard, he also relied upon following judgments:
“a)Vedabai alias Vaijayanatabai Baburao Patil Vs. Shantaram Banurao Patil & Ors. (2002) 253 ITR 798 (SC),
b)Collector, Land Acquisition &Anr. vs. Mst. Katiji& Ors. (1987) 62 CTR (SC)(Syn) 23: 1987 (28) ELT 185 (SC),
c)Ganga Sahai Ram Swarup vs. ITAT (2004) 271 ITR 512 (All)
d)Yuvraj Majajan Vs. Income Tax Officer ITA No. 958/Chd/2014 (2016) 46 CCH 0311 Chd. Trib
e)Bharat Auto Center Vs. CIT (2006) 282 ITR 366, the Hon'ble Allahabad High Court
f)Pankaj Investments Vs. Additional Commissioner Of Income Tax, ITA No. 1986/Mum/2013, 2967/Mum/2013 (2016) 46 CCH 0056 Mum Trib the Hon'ble Bombay Tribunal.
g)Commissioner of income tax vs. Ajaib Singh & Co. High Court of Punjab & Haryana (2001) 170 CTR (P& H) 489: (2002) 253 ITR 630 (P& H)): (2001) 119 taxman 825 (P& H).
h). Ram Lakhan vs. DCIT (ITA No. 5456/Del/2024, AY 2017-18).”
The contention made as above by the Ld. AR has not been able to controverted by the Ld. DR .
Having regard to the fact that addition having been made on estimate basis and the settled principle of law that once addition is made on estimate basis the consequent penalty imposed on estimate addition is nothing but addition made only on assumption and presumption and could not be considered either furnishing of incorrect particulars of income of the assessee or concealment of income by the assessee which has also decided by all the above Judgments relied upon by the Ld. AR and, therefore, respectfully relying upon the same addition made in the penalty proceeding under Section 271(1)(c) of the Act is deleted in both the matters.
In the result, both the appeals filed by the assessee are allowed.