Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2021 (7) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2021 (7) TMI 460 - AT - Income TaxPenalty u/s 271(1)(c) - Power of CIT(A) to issue directions to the AO for levy of penalty on Estimation of income - Low GP - HELD THAT:- CIT(A) has proceeded as if he is setting in revision of the order u/s 263 and he has done enhancement. Enhancement is also on a very absurd reasoning that the GP is very low. Reasoning adduced by the assessee has totally been ignored. Just because the GP rate is low as compared to earlier years that is not conclusive proof that income is suppressed. Hon'ble Punjab & Haryana High Court in the case of Commissioner of Income Tax Vs. Ajay Kumar Singla [2014 (10) TMI 709 - PUNJAB & HARYANA HIGH COURT] has held that lower GP may be cause for investigation but that is not the cause for increase in the assessment. Hence, this limb of learned CIT(A)’s decision is totally devoid of cogency and the same is liable to be quashed An assessment based upon low GP without recording any reason of inaccurate particulars involved is not sustainable. Thereafter learned CIT(A) has given direction to the Assessing Officer to levy penalty equivalent to 100% tax under section 271(1)(c) of the Act. Mere estimate of income cannot fasten liability upon the assessee u/s.271(1)(c) of the Act. In Reliance petro products, it was held that mere disallowance cannot ipso facto fasten liability u/s.271(1)(c) of the Act. Further, it is settled law that learned CIT(A) has no power whatsoever to remit the matter to the Assessing Officer to pass a penalty order as per his direction. In this view of the matter order of learned CIT(A) is perverse and is liable to be quashed. - Decided in favour of assessee.
|