No penalty can be levied if the assessment is made on “Protective basis” or if the concerned addition is made on the basis of estimation:

AO levied penalty on addition made in respect of income from coaching classes. Hon’ble ITAT observed that the in the original assessment, the said addition was made on “Protective basis”. Secondly, such addition was made on the basis of estimation of tuition income. Thirdly, in the assessment order, AO had initiated penalty proceedings for concealing the particulars of income and for furnishing inaccurate particulars of income which shows that there was no clear cut finding as to the type of default committed by the assessee. In light of the above, Hon’ble ITAT deleted the said penalty.

[Sonalben Pareshkumar Dave vs. ITO – ITA No.2318 to 2323/Ahd/2012]