DEEPAK SONI,HOUSE NO. MARWADI ROAD, BHOPAL vs. ITO 4(3), AAYKAR BHAWAN, BHOPAL

ITA 396/IND/2026Status: DisposedITAT Indore17 September 2026AY 2017-201812 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that since the quantum addition, which formed the basis for the penalty, was deleted in the assessee's earlier appeal, the penalty imposed thereon automatically becomes unsustainable. Consequently, the impugned order upholding the penalty was set aside.

What were the facts?

The assessee is aggrieved by a penalty order under Section 271AAC(1) of the Income Tax Act, 1961, which was upheld by the CIT(A). The penalty was imposed on an addition made under Section 69 read with Section 115BBE. The assessee's appeal before the ITAT argued that the penalty was unsustainable as the quantum addition itself had been deleted by the Tribunal in a prior order.

What were the issues?

Whether a penalty under Section 271AAC(1) can be sustained when the underlying quantum addition has been deleted by a higher appellate authority. The validity of the penalty in light of the deletion of the primary addition.

Which sections of the Income-tax Act were involved?

Section 271AAC(1),Section 69,Section 115BBE,Section 253,Section 250,Section 246A

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, INDORE BENCH, INDORE

For Appellant: Adv. & Ms
For Respondent: Shri Binay Kumar Rai, Sr.DR
Hearing: 18.08.2026Pronounced: 17.09.2026

Per Paresh M Joshi, J.M:

This is an appeal filed by the Assessee under section 253 of the income tax Act 1961,[ hereinafter referred to as the Act

for the sake of brevity] before this tribunal, as & by way of a second appeal .The Assessee is aggrieved by the order

bearing No:-ITBA/NFAC/S/250/2025-26/1084574210(1)

dated 08.01.2026 passed by the Ld. CIT(A) u/s 250 of the Act, which is hereinafter referred to as the “Impugned

order”. The Relevant Assessment year is 2017-18 and the DEEPAK SONI ITA No. 396/Ind/2026 - A.Y. 2017-18

corresponding previous year period is from 01.04.2016 to 31.03.2017. 2. Factual Matrix

2.

1 That as and by way of a Penalty order passed u/s 271AA

The order continues below.

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