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Facts
The revenue filed three appeals against the orders of the NFAC, Delhi, which had deleted penalties levied under various sections of the Income-tax Act for AY 2020-2021. The penalties were for alleged underreporting of income and unexplained cash credits.
Held
The Tribunal held that the amounts involved in the penalty orders were below the threshold limit prescribed by the CBDT circular dated 17.09.2024. Therefore, the appeals deserved to be dismissed.
Key Issues
Whether the appeals filed by the revenue against the deletion of penalties are maintainable when the penalty amounts are below the threshold limit prescribed by CBDT circular.
Sections Cited
250, 270A, 143(3), 144B, 270A(3), 143(1)(a), 36(1)(iii), 271AAC(1), 68, 271B, 44AB
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Before: SHRI PAWAN SINGH & SMT. RENU JAUHRI
O R D E R PER BENCH :- These three appeals are filed by the revenue against the orders of the National Faceless Appeal Centre (NFAC), Delhi [CIT(A)] dated 13.03.2025 passed u/s. 250 of the Income-tax Act, 1961 [hereinafter referred to as “Act”] for Assessment Year 2020-2021.
The revenue has raised the following grounds in these appeals.
A.Y. 2020-21 “1. On the facts and circumstances of the case, the Ld. CIT(A) has erred in deleting an amount of Rs.53,10,165/- levied u/s.270A of the Act without appreciating the fact that the assessee under reported income in consequence of misreporting amounting to Rs.1,47,99,790/- as per order u/s.143(3) r.w.s. 144B of the I T Act as the provisions of 3658 & 3659/Mum/2025 A.Y. 2020-21 Girish Shamji Chheda section 270A(3) of the Act would be the difference between the amount of income assessed and the amount of income determined u/s.143(1)(a) of the I T Act.
2. On the facts and circumstances of the case, the CIT(A) has erred in disallowance u/s. 36(1)(iii) of the Act as interest expenses of Rs.1,47,99,790/-, that the entire process is treated as assessee's business and as per section, direct nexus of the amount taken by the assessee for the investment is also proven. The expense claimed is also treated as business expenses.
3. The appellant prays that the order of the National Faceless Appeal Centre (NFAC), Delhi on the above grounds be reversed and that of the AO be restored.
4. The appellant craves leave to amend or alter any ground or submit additional ground which may be necessary.” A.Y. 2020-21 “1. On the facts and circumstances of the case, the Ld. CIT(A) has erred in deleting an amount of Rs.25,91,727/- levied u/s. 271AAC(1) of the Act without appreciating the fact that the assessee is liable for penalty as the income determined includes referred to in section 68 as unexplained cash credits amounting to Rs.3,61,16,600/- 2. On the facts and circumstances of the case, the CIT(A) has erred in allowing the disallowance u/s.68 as unexplained cash credits of Rs.3,61,16,600/- as the assessee failed to prove the genuineness and creditworthiness of transactions of unsecured loans. The onus of proving the above is cast upon the assessee.
3. The appellant prays that the order of the National Faceless Appeal Centre (NFAC), Delhi on the above grounds be reversed and that of the AO be restored.
4. The appellant craves leave to amend or alter any ground or submit additional ground which may be necessary.”
A.Y. 2020-21 “1. On the facts and circumstances of the case, the Ld. CIT(A) has erred in deleting an amount of Rs.1,50,000/- levied u/s.271B of the Act without appreciating the fact that the assessee is liable to get his accounts audited u/s.44AB of the I.T. Act, 1961 as the total turnover of the assessee during the year under consideration exceeded Rs.1 crore and also the fact that the entire interest expenses of Rs.1,47,99,790/- claimed by the assessee under the head 'Income from Other Sources' is treated as assessee’s business income as the direct nexus of the amount taken by the assessee for the investment is proven, treating the same as business expenses.
2. The appellant prays that the order of the National Faceless Appeal Centre (NFAC), Delhi on the above grounds be reversed and that of the AO be restored.
The appellant craves leave to amend or alter any ground or submit additional ground which may be necessary.”
3658 & 3659/Mum/2025 A.Y. 2020-21 Girish Shamji Chheda 3. At the outset Ld. AR, pointed out that amounts involved in all the three appeals against the penalty order u/s. 270A, 271AAC and 271B are below the threshold limit prescribed by the CBDT vide circular dated 17.09.2024, and hence these deserve to be dismissed. We have perused the penalty orders and it is seen that penalty imposed in all the three cases is below the threshold monetory limit of Rs. 60 lacs prescribed by the CBDT vide above mentioned circular. In view of above, all the three appeals of the revenue are hereby dismissed.
In the result, all the three appeals of the revenue are dismissed.
Order is pronounced in the open court on 24.09.2025