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2019 (12) TMI 201 - AT - Income TaxPenalty levied u/s 271B - non maintenance of accounts - HELD THAT:- In the instant case, when the books of account are not maintained, the AO did not initiate any proceedings for not maintaining the books of account. AO obviously satisfied that the books of account were not maintained for good and sufficient reasons. When the AO accepted the fact that the books of account are not maintained, there is no reason for him to levy penalty u/s 271B. In view of the above observations, we set aside the order of CIT(A) and delete the penalty levied u/s 271B of the Act Penalty u/s 271(1)(c) - assessee concealed his income by suppressing the gross receipts and hence, worked out the penalty on the amount of tax sought to be evaded u/s 271(1)(c) - additions on which the penalty was imposed was estimated after applying the net profit rate and that it was a settled law that penalty on ad hoc disallowance or addition made on estimate basis was not attracted - HELD THAT:- The Hon’ble Delhi High Court in CIT vs. Aero Traders Pvt. Ltd. [2010 (1) TMI 32 - DELHI HIGH COURT] has held that no penalty u/s 271(1)(c) can be imposed when income is determined on estimate basis. Similar view has been taken in the case of Harigopal Singh vs. CIT [2002 (8) TMI 65 - PUNJAB AND HARYANA HIGH COURT] and CIT vs. Subhash Trading Company [1995 (11) TMI 37 - GUJARAT HIGH COURT] . In view of the foregoing precedents including the one from the Hon’ble Jurisdictional High Court, it is apparent that when the bedrock of instant penalty is the estimate of net profit, the same cannot be sustained. Accordingly, we set aside the order of the Ld. CIT (Appeals) and direct the AO to delete the penalty.
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