GANPATBHAI MAYAJIBHAI BARIA,PANCHMAHAL vs. ITO, WARD 1, GODHRA, PANCHMAHAL

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ITA 1506/AHD/2026Status: DisposedITAT Ahmedabad01 September 2026AY 2018-194 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 quantum addition on which the penalty was levied was subsequently deleted by a co-ordinate bench, the penalty cannot survive. Therefore, the penalty order was quashed.

What were the facts?

The assessee did not file his return of income for AY 2018-19, leading to a reopened assessment and an addition for undisclosed capital gains. A penalty under Section 270A was imposed based on this addition.

What were the issues?

The primary issue was whether a penalty under Section 270A could be sustained when the underlying addition to income was deleted. The secondary issue involved the violation of the principle of natural justice.

Which sections of the Income-tax Act were involved?

Section 270A,Section 147

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “A” BENCH, AHMEDABAD

Before: SHRI NARENDRA PRASAD SINHA & SHRI TAPAS RAM MISRA

For Appellant: Shri Abbas Gulamhusainwala, CA
For Respondent: Shri Amit Pratap Singh, SR-DR
Hearing: 17.08.2026Pronounced: 01.09.2026

PER NARENDRA PRASAD SINHA, ACCOUNTANT MEMBER:

This appeal is filed by the Assessee against order of National Faceless Appeal Centre (NFAC), Delhi [hereinafter referred to as “CIT(A)”] dated 10.02.2026 for the Assessment Years (A.Y.) 2018-19 in the proceeding u/s 270A of the Income Tax Act [hereinafter referred as “the Act”].

2.

The brief facts of the case are that the assessee did not file his return of income for A.Y. 2018-19. The case of the assessee was reopened on the basis of information that he had sold a property during the year and the capital gain derived thereon was not offered to tax. The assessment

ITA No. 1506/Ahd/2026 Ganpatbhai Mayajibhai Baria Vs ITO, AY- 2018-19 2 was completed u/s. 147 of the Act on 28.03.2023 at total income of Rs. 56,98,310/-. The AO had made an addition of Rs. 56,98,305/- on account of undisclosed capital gain and had also initiated penalty proceeding u/s. 270A of the Act in this respect. Thereafter, a separate penalty order u/s. 270A of the Act was passed imposing penalty of Rs. 24,69,172/- for misreporting of income.

3.

Aggrieved with the penalty order passed by the AO, the assessee had filed an appeal before the first appellate authority, which was decided by the CIT(A) vide the impugned order and the appeal of the assessee was dismissed. Th

4.

Now, the assessee in second appeal before us. The following grounds have been taken in this appeal:

1.

Violation of Principle of Natural Justice: 1) The learned CIT(A) erred in fact and in law in passing the order against the principle of natural justice. 2) The learned CIT(A) erred in fact and in law in confirming the action of learned AO in passing the penalty order without granting an opportunity of being heard and considering the facts and material on the record. Without prejudice to the above Penalty u/s 270A: 3) The learned CIT(A) erred in fact and in law in confirming the action of AO in imposing penalty as mis-reporting of income without appreciating that the appellant has disclosed all the material facts to be substantiate to the explanation offered. 4) The Learned CIT(A) has erred in confirming the action of the Ld. AO by upholding the penalty under section 270A of Rs. 24,69,172 disregarding the legal/factual matrix of the case

ITA No. 1506/Ahd/2026 Ganpatbhai Mayajibhai Baria Vs ITO, AY- 2018-19 3 5) The learned CIT(A) erred in law and on facts in confirming penalty despite the fact that there was no misreporting of income, suppression of facts, or concealment of income by the appellant. 6) The learned CIT(A) has erred in law and on facts in sustaining the action of AO for charging 200% Penalty under section 270A which is arbitrary and bad in law 7) The appellant craves the right to add to or alter, amend, substitute, delete or modify all or any of the above grounds of appeal any time before or at the time of hearing.

5.

Shri Abbas Gulamhusainwala, the Ld. AR of the assessee submitted that the penalty u/s. 270A of the Act was imposed in respect of addition of Rs. 56,98,305/- on account of undisclosed capital gain. He explained that the assessee had filed an appeal against the quantum addition, which was decided by Co-ordinate bench of this Tribunal in ITA No. 2693/Ahd/2025 dated 12.06.2026 and the addition of Rs. 56,98,305/- as made by the AO was deleted. The Ld. AR submitted that since the quantum addition stands deleted, the penalty imposed by the AO can’t survive.

6.

Per contra, Shri Amit Pratap Singh, the Ld. SR-DR relied upon the order of the lower authorities. He, however, concurred that since the quantum addition has been deleted the penalty does not survive.

7.

We have considered the rival submissions. The AO had imposed penalty u/s. 270A of the Act in respect of addition of Rs. 56,98,305/- on account of undisclosed capital gain. Since the quantum addition stands deleted vide order of the Co-ordinate bench of this Tribunal in ITA No. 2693/Ahd/2025 dated 12.06.2026, the penalty imposed u/s. 270A of the Act, does not survive. Accordingly, the order u/s. 270A of the Act imposing penalty of Rs. 24,69,172/- is quashed.

ITA No. 1506/Ahd/2026 Ganpatbhai Mayajibhai Baria Vs ITO, AY- 2018-19 4

8.

In the result, the appeal of the assessee is allowed.

Order pronounced in the Court on 01/09/2026 at Ahmedabad.

Sd/- Sd/- (TAPAS RAM MISRA) (NARENDRA PRASAD SINHA) Judicial Member Accountant Member Dated – 01st September, 2026 (True Copy) Neelesh, Sr. PS आदेश आदेश क� आदेश आदेश क� क� �ितिलिप क� �ितिलिप �ितिलिप अ�ेिषत �ितिलिप अ�ेिषत अ�ेिषत/Copy of the Order forwarded to : अ�ेिषत 1. अपीलाथ� / The Appellant 2. ��यथ� / The Respondent. 3. संबंिधत आयकर आयु� / Concerned CIT 4. आयकर आयु�(अपील) / The CIT(A) 5. िवभागीय �ितिनिध, आयकर अपीलीय अिधकरण / DR, ITAT, 6. गाड� फाईल /Guard file. आदेशानुसार/BY ORDER, आदेशानुसार आदेशानुसार आदेशानुसार पंजीकार (Dy./Asstt.Registrar) उप उप/सहायक उप उप सहायक सहायक पंजीकार सहायक पंजीकार पंजीकार आयकर आयकर अपीलीय आयकर आयकर अपीलीय अपीलीय अिधकरण अपीलीय अिधकरण अिधकरण, अहमदाबाद अिधकरण अहमदाबाद अहमदाबाद / ITAT, Ahmedabad अहमदाबाद

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