DCIT, CENTRAL CIRCLE 3, NEW DELHI, NEW DELHI vs. TREMENDOUS MINING AND MINERALS PVT. LTD., NEW DELHI
Facts
The Revenue appealed the deletion of a penalty of Rs. 24,33,37,500/- levied under section 271(1)(c) of the IT Act. The penalty was based on an unexplained share application money addition of Rs. 25,00,00,000/-. The assessee argued that since the quantum addition on which the penalty was based was already deleted by the ITAT, the penalty should not survive.
Held
The Tribunal held that the penalty in dispute would not survive as the coordinate bench of the ITAT had already deleted the quantum addition. Therefore, the CIT(A) was justified in deleting the penalty.
Key Issues
Whether a penalty levied under section 271(1)(c) can survive after the deletion of the quantum addition upon which it was based by a coordinate bench of the ITAT.
Sections Cited
271(1)(c), 275(1)(A)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, DELHI BENCH ‘C’, NEW DELHI
IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH ‘C’, NEW DELHI BEFORE SHRI M. BALAGANESH, ACCOUNTANT MEMBER AND SHRI SUDHIR KUMAR, JUDICIAL MEMBER
ITA No. 7251/DEL/2025 (Assessment Year : 2012-13)
DCIT, CENTRAL CIRCLE-3, NEW DELHI vs. TREMENDOUS MINING ROOM NO. 333, E-A ARA CENTRE, AND MINERALS PVT LTD. JHANDEWALAN EXTENSION, CABIN NO. 1, 1205 89 NEW DELHI – 110 055 HEMKUNT CHAMBER NEHRU PLACE, SOUTH DELHI, DELHI (APPELLANT) (RESPONDENT) ASSESSEE BY : Shri Ashwani Kumar, CA REVENUE BY : Shri Om Prakash, Sr. DR. Date of Hearing : 12.03.2026 Date of Order : 27.03.2026 O R D E R PER SUDHIR KUMAR, JM :
This appeal is preferred by the Revenue against the order of ld. Commissioner of Income-tax (Appeals)-23, New Delhi (hereinafter referred to ‘Ld. CIT (A)’) dated 30.8.2025 for AY 2012-13 on the following grounds:- 1. That the Ld. CIT(A) erred in directing deletion of penalty without considering the provisions of section 275(1)(A) of the Act in proper prospective, as the said section empowers the AO to modify the penalty only after the appellate proceedings in the quantum matter have attended finality. 2. The appellant craves leave to add, amend, alter, vary or without any of
the above grounds of appeal at the time of hearing. 3. That on the facts and in the circumstances of the case and in law, the CIT(A) erred in deleting the penalty of Rs. 24,33,37,500/- levied u/s. 271(1)(c) of the Act without appreciating that the penalty was rightly imposed by the AO for furnishing inaccurate particulars / concealment of income in respect of unexplained share application money of Rs. 25,00,00,000/-. 4. That the CIT(A) erred in holding that the basis for levey of penalty ceased to exist merely because the ITAT deleted the quantum addition, without considering the fact that the Department may file a further appeal against the deletion of quantum addition before Hon’ble High Court , and, thereforee, the issue has not attained finality. 5. That the Ld. CIT(A) erred in law and on facts in relying solely upon the order of the Hon’ble ITAT in quantum appeal without examining the independent satisfaction recorded by the AO for concealment of income and without appreciating that penalty proceedings are distinct and separate from assessment proceedings.
At the time of hearing, Ld. A.R. for the Assessee, stated that the quantum addition on which the penalty has been imposed, has already been deleted by the ITAT, ‘C’ Bench, New Delhi in ITA No. 157/Del/2023 (AY 2012-13) vide Order dated 09.07.2025. In this behalf he filed the copy of the Tribunal’s Order dated 09.07.2025 in assessee’s own case and submitted that since quantum addition has been deleted and as a result thereof, the penalty does not survive and may be deleted as such. He submitted that in view of the aforesaid factual matrix, Ld. CIT(A) has rightly deleted the penalty vide his order dated 30.8.2025 by holding that no cause exists to levy the penalty on the assessee because the penalty is imposed on alleged income / addition of Rs. 25,00,00,000/- and quantum addition of Rs. 25,00,00,000/- has been deleted by the ITAT, Delhi, hence, it is requested that the order of the Ld. CIT(A) may be affirmed by dismissing the appeal of the Revenue.
Per contra, Ld. DR. relied upon the penalty order of the AO and reiterated the contentions made in the grounds of appeal. 4. We have heard the rival contentions and perused the records, especially the aforesaid Coordinate Bench decision dated 09.07.2025. We find considerable cogency in the contention of the Ld. AR for the assessee that in assessee’s own case in ITA No. 157/Del/2023 (AY 2012-13) vide Order dated 09.07.2025, the Coordinate Bench of Delhi Tribunal had already deleted the quantum addition on which the penalty has been imposed, thus, in our considered view, the penalty in dispute will not survive, thus, the Ld. CIT(A) rightly deleted the penalty in dispute. In view of the aforesaid factual matrix, we uphold the action of the Ld. CIT(A) in deleting the penalty in dispute by dismissing the Appeal filed by the Revenue. 5. In the result, the appeal filed by the Revenue stands dismissed.
Sd/- Sd/-
(M. BALAGANESH) (SUDHIR KUMAR) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated : 27.03.2026 SRBHATNAGGAR
