MORPHEUS DEVELOPERS PVT LTD,DELHI vs. DCIT, CIRCLE 16(1), DELHI

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ITA 3049/DEL/2026Status: DisposedITAT Delhi12 August 2026AY 2017-183 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 noted that a coordinate bench had previously set aside the quantum assessment order and restored the matter to the AO for a fresh decision. Since the penalty order's basis was the quantum assessment, the penalty order lost its substratum.

What were the facts?

The assessee appealed against a penalty order passed under Section 270A of the Income Tax Act for AY 2017-18. The penalty was based on an assessment order that was subsequently challenged.

What were the issues?

Whether a penalty order under Section 270A can sustain when the underlying assessment order, which quantifies the under-reported income, is set aside.

Which sections of the Income-tax Act were involved?

Section 270A

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI BENCHES, NEW DELHI

Before: SHRI ANUBHAV SHARMA

Pronounced: 12.08.2026

PER SHRI ANUBHAV SHARMA, JUDICIAL MEMBER:

This appeal is preferred by the assessee against the order dated 19.01.2026 of the Ld. National Faceless Appeal Centre (NFAC), Delhi (hereinafter referred as Ld. First Appellate Authority or in short Ld. ‘FAA’) in DIN & Order No:

ITA 3049/DEL/2026 MORPHEUS DEVELOPERS PVT LTD

ITBA/NFAC/S/250/2025-26/1084928672(1) arising out of the order dated 28.02.2022 u/s 270A of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) passed by NFAC, Delhi for AY: 2017-18.

2.

On hearing both sides, our attention was drawn to order dated 14.01.2026 in ITA No. 5428/Del/2025 for AY: 2017-18 wherein Coordinate Bench has allowed the assesse’s appeal in statistical purposes and the exparte assessment order has been set aside and matter has been restored to AO with direction to the AO to give fresh opportunity to the assesse and decide the issue afresh. As the penalty under Section 270A of the Act, has basis in an assessment order for quantifying under-reported income, the impugned order being outcome of the quantum assessment order, penalty order looses its substratum. Accordingly, the appeal is allowed and the impugned penalty order is quashed.

Order passed in the open court on 12.08.2026

Sd/- Sd/- AMITABH SHUKLA ANUBHAV SHARMA ACCOUNTANT MEMBER JUDICIAL MEMBER Delhi Dated: 12.08.2026 Rohit, Sr. PS

ITA 3049/DEL/2026 MORPHEUS DEVELOPERS PVT LTD

Copy to:

MORPHEUS DEVELOPERS PVT LTD, 1, MAIN ROAD, MAUJPUR DELHI, 1 NEW DELHI-110053, DELHI

DCIT, CIRCLE 16(1), 2 -, NEW DELHI-110002, DELHI

3 THE PCIT / CIT, 4 THE D.R., ITAT, DELHI BENCH 5 GUARD FILE

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