MOHD KHALID,SAMBHAL vs. ITO WARD 1(5), SAMBHAL

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ITA 3875/DEL/2026Status: DisposedITAT Delhi29 July 2026AY 2018-192 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 a penalty cannot survive if the underlying quantum addition is absent. Since the quantum issue was remitted for re-adjudication, the penalty order was also set aside.

What were the facts?

The assessee's appeal is against a penalty order under section 271AAC(1) for AY 2018-19. The quantum appeal related to the same assessment year was previously set aside by the tribunal for fresh adjudication.

What were the issues?

Whether penalty under Section 271AAC(1) can be sustained when the quantum addition is set aside for fresh adjudication.

Which sections of the Income-tax Act were involved?

Section 271AAC(1)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI BENCHES, ‘F’ NEW DELHI

Before: SHRI VIKAS AWASTHY

Pronounced: 29.07.2026

आदेश / ORDER PER AMITABH SHUKLA, AM This appeal filed by the assessee is directed against the separate order of Ld. Commissioner of Income Tax (Appeals)/National Faceless Appeal Centre, New Delhi, dated 11.03.2026, arising out of penalty order dated 01.09.2023 passed under section u/s 271AAC(1) of the Act for the Assessment Year 2018-19. The word ‘Act’ herein this order would mean Income Tax Act, 1961. 2. At the outset, ld. Counsel for the assessee submitted that this tribunal has decided the quantum appeal in favour of the appellant in terms of their order in ITA No.3874/Del/2026, dated 25.06.2026 by setting aside the issue for afresh re-adjudication

ITA 3875/DEL/2026 Mohd. Khalid

by the ld. CIT(A) and that therefore the present appeal which is contesting the penalty u/s 271AAC deserves to be allowed in assessee’s favour. 3. The ld. DR concurred with the arguments of the appellant and did not object to the proposal. 4. We have heard rival submissions in the light of material placed on records. It is trite law that no penalty survives once quantum addition is absent. In the present case, the quantum stands remitted back to ld. CIT(A) for re-adjudication de novo. Accordingly, we set-aside the order of ld. CIT(A) confirming penalty imposed u/s 271AAC by the ld. Assessing Officer vide his order dated 01.09.2023 and remit the matter back to ld. CIT(A) for re-adjudication de novo. The ground of appeal raised by the assessee is therefore allowed for statistical purposes. 5. In the result, the appeal of the assessee is allowed for statistical purposes. Order pronounced in the open court on 29th July, 2026.

Sd/- Sd/- [VIKAS AWASTHY] [AMITABH SHUKLA] JUDICIAL MEMBER ACCOUNTANT MEMBER Dated: 29.07.2026 Shekhar Copy forwarded to: 1. Appellant 2. Respondent 3. PCIT 4. CIT(A) 5. DR Asst. Registrar, ITAT, New Delhi,

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