SHRI. VIJAYSINGH MADHAVRAO PATWARDHAN,MUMBAI vs. THE ASSISTANT COMMISSIONER OF INCOME TAX-26(1),MUMBAI (NOW DCIT-41(1)(1),MUMBAI), MUMBAI

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ITA 4993/MUM/2025Status: DisposedITAT Mumbai30 September 2025AY 2006-07Bench: MS. KAVITHA RAJAGOPAL (Judicial Member), SHRI OMKARESHWAR CHIDARA (Accountant Member)1 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that since the assessment order was quashed as invalid, the penalty order arising from it is also unsustainable. Therefore, the penalty levied by the Assessing Officer and upheld by the CIT(A) was deleted.

What were the facts?

The assessee's appeal was filed with a delay, which was condoned. The case involves an addition made under Section 69 of the Income Tax Act and subsequent penalty proceedings for concealment of income. The original assessment order was challenged and found to be invalid by the Tribunal in a previous proceeding.

What were the issues?

Whether a penalty can be sustained when the underlying assessment order has been quashed as invalid.

Which sections of the Income-tax Act were involved?

Section 250,Section 271(1)(c),Section 69,Section 143(3),Section 147

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “F” BENCH, MUMBAI

Before: AND SHRI OMKARESHWAR CHIDARA, AM Shri

For Appellant: Ms. Vinita Shah (virtually appeared)
For Respondent: Ms. Kavitha Kaushik (SR DR)
Hearing: 23.09.2025Pronounced: 30.09.2025

(Assessment Year: 2006-07) Shri Vijaysingh Madhavrao Assistant Commissioner of Income Patwardhan Tax-26(1), Mumbai (now DCIT- 4, Sangli Villa, 10th Road, North Vs. 41(1)(1), Mumbai Extension JVPS, Mumbai – 400051. PAN/GIR No. AGLPP8828J (Appellant) : (Respondent) Assessee by : Ms. Vinita Shah (virtually appeared) Respondent by : Ms. Kavitha Kaushik (SR DR) (Virtually appear) Date of Hearing : 23.09.2025 Date of Pronouncement : 30.09.2025 O R D E R Per Kavitha Rajagopal, J M: This appeal has been filed by the assessee, challenging the order of the learned Commissioner of Income Tax (Appeals) Delhi (‘ld. CIT(A)’ for short), National Faceless Appeal Centre (‘NFAC’ for short) passed u/s.250 of the Income Tax Act, 1961 (‘the Act'), pertaining to the Assessment Year (‘A.Y.’ for short) 2006-07.

2.

It is observed that the assessee has filed the present appeal with a delay of 69 days beyond the period of limitation for which the assessee has filed an application along with affidavit for condoning the said delay. On perusal of the same, we deem it fit to condone the delay for the reason that the assessee had ‘sufficient cause’ for the said delay. Delay condoned.

(A.Y. 2006-07) Shri Vijaysingh Madhavrao Patwardhan 3. The assessee has raised the following grounds of appeal:

1. On the facts and circumstances of the case as well as in law, the Learned CIT(A) has erred in confirming the action of the Learned Assessing Officer in levying the penalty of Rs. 1,89,60,000/-u/s.271(1)(c) of the Income Tax Act, 1961, being 300% of the tax sought to be evaded, without considering the facts and circumstances of the case.

2. On the facts and circumstances of the case as well as in law, the Learned CIT(A) has erred in confirming the action of the Learned Assessing Officer in levying a penalty of on the issue of addition made of Rs.1,89,41,053/- u/s.69 of the Income Tax Act, 1961 by treating the peak balance of Foreign bank account as alleged Unexplained Investment, without considering the facts and circumstances of the case.”

4. Brief facts of the case are that the assessee is an individual and had filed his return of income dated 31.10.2006, declaring total income at Rs. 20,29,400/- which was subsequently revised to Rs. 13,42,690/-. Assessment u/s. 143(3) of the Act was completed on 04.09.2012 where the ld. AO determined the total income at Rs. 14,32,990/-. The assessee’s case was reopened u/s. 147 of the Act based on the information that the assessee had a foreign bank account in HSBC, Geneva and the ld. AO observed that the deposits in the said account and income on account of transactions were not reported by the assessee in his return of income. The assessee contended that the assessee was NRI from 1991 to 2004 and the said deposits in the foreign account are savings of the assessee of that period and that on returning back to India in 2004, the assessee is said to have donated all his savings to his daughter. The ld. AO after duly considering the assessee’s submission passed the assessment order u/s. 143(3)/147 of the Act dated 30.03.2015, determining total income at Rs. 2,03,55,050/- after making addition of Rs. 1,89,41,053/- as unexplained investment u/s. 69 of the Act and Rs. 29,993/- as short term capital gain @10%. The ld. AO also initiated penalty proceedings (A.Y. 2006-07) Shri Vijaysingh Madhavrao Patwardhan u/s. 271(1)(c) of the Act, for concealment of income and furnishing inaccurate particulars of income. The ld. AO then passed the penalty order dated 27.08.2015, u/s. 271(1)(c) of the Act, thereby levying a penalty of Rs. 1,89,60,000/- for furnishing inaccurate particulars of income as being 300% of the tax sought to be evaded.

5. The assessee was in appeal before the first appellate authority, who vide order dated 26.03.2025 dismissed the appeal filed by the assessee and upheld the penalty levied by the ld. AO.

6. The assessee is in appeal before us, challenging the order of the ld. CIT(A).

7.

The learned Authorised Representative ('ld. AR' for short) for the assessee stated that the addition made in the hands of the assessee for the relevant A.Y. was deleted by the Tribunal by holding that the reopening of assessment and the assessment order was itself invalid. The ld. AR further contended that since the assessment order was already quashed by the Tribunal, the resultant penalty levied by the ld. AO is unsustainable and prayed that the appeal of the assessee be allowed.

8.

The learned Departmental Representative ('ld. DR' for short) for the revenue on the other hand had nothing to controvert the same.

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