Hon'ble Judges/Coram:
N.K. Billaiya, Member (A) and Anubhav Sharma

ORDER

Anubhav Sharma, Member (J)

1. This appeal has been preferred by the Assessee against the order dated 24.09.2018 of Ld. CIT(A)-1, New Delhi (hereinafter referred as the First Appellate Authority "FAA") in appeal No. 537/17-18 arising out of an appeal before it against the penalty order dated 26.03.2018 passed u/s. 271(1)(c) of the Income Tax Act, 1961 (hereinafter referred as 'the Act') by the Ld. AO, ITO, Ward-3(2), New Delhi (hereinafter referred as the Ld. AO).

2. The appellant company had filed return of income on 30.09.2012 declaring gross total income of Rs. Nil and the case was selected for scrutiny. An assessment order u/s. 144 of the Act was passed making an ad hoc addition of Rs. 2 crores. In appeal before Ld. CIT(A), the same was reduced to Rs. 46,46,217/- while deleting Rs. 1,53,53,783/-. Thereafter, vide penalty order dated 28.02.2018, the Ld. AO had imposed penalty of Rs. 14,35,681/- @ 100% of the tax sought to be evaded u/s. 271(1)(c) of the Act and the same was sustained by the Ld. CIT(A) by impugned order dated 11.09.2018.

3. The Assessee is in appeal before the Tribunal raising following grounds of appeal:-

"1. That the learned CIT (Appeals) has erred both in law and on facts by confirming the penalty order passed by the AO under section 271(1)(c) amounting to Rs. 14,35,680/-, without appreciating the fact that the AO has not made any distinction between the two charges i.e. concealment of income and furnishing the inaccurate particulars of income thus violated the rules laid down by the Honorable Karnataka High Court in case of Manjunatha Cotton and Ginning Factory MANU/KA/2416/2012 : (2013) 359 ITR 565. (Karnataka), where in it was held that the notices under challenge are not in conformity with the law and they are void ab initio. Accordingly the said notices and all proceedings based thereon, culminating in the impugned order and quashed. This verdict was also followed by the jurisdictional ITAT recently, in case of PSB Industrial (India) Private Limited vs. ACIT (ITA No. 2002.2003.2004. and 2005/Del/2011), order pronounced on 09-11-2017.

2. That the learned CIT (Appeals) has erred both in law and on facts by confirming the penalty order passed by the AO under section 271(1)(c) that no penalty may be imposed in case the income is assessed on estimation basis. The learned CIT (Appeals) completely failed to appreciate the vital fact that against the quantum order, CIT (Appeals) has restricted the additions of the order of AO, passed under section 144/143(3) of the Act, from Rs. 2,00,00,000/- to Rs. 46,46,217/-, by just using the three (3) different tools, confirmed the rejection of books of accounts and accordingly re-estimation of the Income has been made.

3. That the learned CIT (Appeals) has erred both in law and on facts by confirming the penalty order passed by the AO under section 271(1)(c) without appreciating the fact that Learned CIT (Appeal) while passing the order, against the quantum of appeal, estimation of income has been made, by using the three (3) different tools as under:

a. Estimation of income due to negative cash Rs. 27,52,695/-

b. Estimation of expenses incurred while cash was negative Rs. 4,00,000/-

c. Estimation of income due to reduction of GP Ration From 8.84% to 7.31% Rs. 14,93,522/-

Thus, alternatively the imposition of the penalty under section