PREMCHAND MITHAILAL GUPTA,MUMBRA vs. INCOME TAX OFFICER, WARD 3(2), THANE, THANE

आदेश / ORDER

PER SHRI MAKARAND VASANT MAHADEOKAR, JUDICIAL MEMBER: This appeal by the assessee is directed against the order dated 21.02.2026 passed by the learned Commissioner of Income- tax (Appeals), National Faceless Appeal Centre, Delhi [hereinafter referred to as "the CIT(A)"], under section 250 of the Income-tax Act, 1961 [hereinafter referred to as "the Act"], for the assessment year 2013-14, arising from the penalty order dated 13.01.2022 passed under section 271(1)(c) of the Act. The assessee has raised the following grounds of appeal: 1. The learned CIT(A) erred in passing the ex-parte order against the appellant. 2. The learned CIT(A) erred in confirming the penalty of INR 15,29,550 levied by the Assessing officer under Section 271(1)(c) of the Income tax Act, 1961. The CIT(A) erred in not appreciating that appellant had only deposited cash of INR 16,50,000 in Axis Bank, however the same was reported thrice in AIR and CIB information of the Income tax department. It is submitted that the quantum appeal is also pending before the CIT(A). Each one of the above grounds of appeal is without prejudice to the above. The appellant reserves the right to add, alter or amend to the above grounds of appeal. 2. Briefly stated, the assessment in the case of the assessee was completed under section 147 read with sections 144 and 144B of the Act vide order dated 25.09.2021, determining the total income at Rs.49,50,000/-. The said amount represented cash deposits treated by the Assessing Officer as unexplained investment under section 69 of the Act. Consequent thereto, the Assessing Officer initiated penalty proceedings under section 271(1)(c) of the Act and, vide order dated 13.01.2022, levied penalty of Rs.15,29,550/- , being 100 per cent of the tax sought to be evaded. 3. Aggrieved by the penalty order, the assessee preferred an appeal before the learned CIT(A). The learned CIT(A), vide the impugned order dated 21.02.2026, dismissed the appeal and

ITA 4469/MUM2026 PREMCHAND MITHAILAL GUPTA upheld the penalty levied by the Assessing Officer. The assessee is, therefore, in appeal before us. 4. During the course of hearing before us, the learned Authorised Representative reiterated the facts of the case and submitted that the assessee’s appeal against the assessment order, from which the impugned penalty proceedings have arisen, is presently pending adjudication before the learned CIT(A). It was, therefore, submitted that the question of levy and sustainability of the penalty should be considered only after the quantum appeal is adjudicated and the fate of the underlying addition is determined. 5. The learned Departmental Representative raised no objection to restoration of the penalty proceedings to the file of the Assessing Officer for a fresh decision after disposal of the quantum appeal pending before the learned CIT(A). 6. We have considered the rival submissions and perused the material available on record. It is an undisputed position before us that the penalty under section 271(1)(c) of the Act has been levied with reference to the addition of Rs.49,50,000/- made in the assessment order dated 25.09.2021 and that the assessee’s quantum appeal challenging the said assessment order is presently pending before the learned CIT(A). Thus, the very foundation on which the impugned penalty has been levied is yet to attain adjudication at the first appellate stage. 7. In these circumstances, adjudication of the penalty appeal at this stage would be premature, since the sustainability and quantum of the penalty would necessarily depend upon the outcome of the quantum appeal. We, therefore, consider it just and appropriate to set aside the impugned order of the learned CIT(A) and restore the issue relating to the levy of penalty under section 271(1)(c) of the Act to the file of the Assessing Officer. 8. The Assessing Officer is directed to await the adjudication of the quantum appeal by the learned CIT(A) and thereafter decide the penalty proceedings afresh, in accordance with law and having regard to the outcome of the quantum appeal. Needless to state, the Assessing Officer shall afford a reasonable opportunity of being heard to the assessee before passing the fresh order. The assessee shall also furnish a copy of the order passed by the learned CIT(A) 3

ITA 4469/MUM2026 PREMCHAND MITHAILAL GUPTA in the quantum appeal and shall cooperate in the proceedings. We have not expressed any opinion on the merits of the addition or the leviability of penalty. 9. Accordingly, the grounds raised by the assessee are allowed for statistical purposes. 10. In the result, the appeal filed by the assessee is allowed for statistical purposes. Order pronounced in the open court on 18.08.2026.

Sd/- Sd/- CHALLA NAGENDRA PRASAD MAKARAND VASANT MAHADEOKAR (JUDICIAL MEMBER) (ACCOUNTANT MEMBER)

Mumbai, Dated 18/08/2026 Soumili, PS आदेश की �ितिलिप अ�ेिषत/Copy of the Order forwarded to : 1. अपीलाथ� / The Appellant 2. ��थ� / The Respondent. 3. संबंिधत आयकर आयु� / The CIT(A) 4. आयकर आयु�(अपील) / Concerned CIT 5. िवभागीय �ितिनिध, आयकर अपीलीय अिधकरण, मु�बई / DR, ITAT, Mumbai 6. गाड� फाईल / Guard file.

आदेशानुसार/ BY ORDER, स�ािपत �ित //True Copy// उप/सहायक पंजीकार ( Asst. Registrar) आयकर अपीलीय अिधकरण, मु�बई मु�बई मु�बई / ITAT, Mumbai मु�बई 4