DCIT-CC -8(4), MUMBAI, MUMBAI vs. AURUM PLATZ PRIVATE LIMITED, MUMBAI

The Ld. DR contended that the penalty imposed by the Ld. AO u/sec. 270A(9) of the Act amount to Rs.11,02,00,202/- was duly deleted by the Ld. CIT(A). considering the order of the ITAT by deleting the quantum addition.

It is further informed by the Ld. AR the Bench that the quantum addition was duly deleted by the Coordinate Bench of ITAT Mumbai, and accordingly by order bearing ITA No.2004 and 2005 dated 20.06.2023 on merits. The roots for levy of penalty lie in the assessment order. The Ld. AO considered the misreported income to the tune of Rs.16,09,45,739/- and tax on the above including surcharge and education cess amount to Rs.5,51,00,101/-. On that basis the 200% of the penalty was levied u/sec. 270A(9) on misreported income which come to Rs.11,02,00,202/-. The addition travelled up to Tribunal and Tribunal in ITA No.2004 and 2005/Mum/2021 vide order dated 20.06.2023 had deleted the addition on account of classification of capital gain as a business income. Since the substantive addition have been deleted, so the Ld. CIT(A) deleted the penalty levied by the Ld. AO in such disallowance. The relevant observations of the Ld. CIT(A) in para no. 6.1.3 is reproduced as below: “6.1.3. Decision: I have gone through the submissions of the appellant, the assessment order, penalty order, all the relevant records and the facts of the case. In view of the Hon'ble Tribunal's order (supra), whereby the additions made in the assessment order has been deleted, the consequential penalty levied by the AO on the same cannot sustain. In this regard, reliance is also placed on the decision of Apex Court in case of Hon'ble Supreme Court in the case of K.C. Builders vs. ACIT (135 Taxman 361)(SC), wherein the Hon'ble Apex court held that when the 2 addition made in Assessment order on the basis of which penalty was levied, are deleted, there remains no basis at all for levying the penalty and therefore, in such a case, no such penalty can survive and the same is liable to be cancelled. Thus, in view of the above discussion, penalty levied u/s 270A of Rs. 11,02,00,202/-, being 200% of tax on tax additions made by the AO, is hereby deleted. In the result, the appeal is allowed.”

We have heard the rival submissions and perused the material available on record. It is an undisputed fact that the penalty under section 270A(9) of the Act was levied solely on the basis of the quantum addition made by the Ld. AO. The said quantum addition has already been deleted by the Coordinate Bench of the Tribunal in ITA Nos. 2004 & 2005/Mum/2021 vide order dated 20.06.2023. Consequently, the very foundation for the levy of penalty no longer survives. The Ld. CIT(A), following the Tribunal's order and the settled principle laid down by the Hon'ble Supreme Court in K.C. Builders v. ACIT (135 Taxman 361), rightly held that no penalty could survive once the quantum addition had been deleted. We find no infirmity in the order of the Ld. CIT(A). Accordingly, the same is upheld, and the grounds raised by the Revenue are dismissed. 5. In the result, the appeal of the revenue bearing ITA No.2124/Mum/2026 is dismissed. Order pronounced in the open court on 28th day of July 2026. Sd/- Sd/- (BIJAYANANDA PRUSETH) (ANIKESH BANERJEE) ACCOUNTANT MEMBER JUDICIAL MEMBER Mumbai,िदनांक/Dated: 28/07/2026 SAUMYA Sr.PS Copy of the Order forwarded to: 3

अपीलाथ�/The Appellant , 2. �ितवादी/ The Respondent. 3. आयकरआयु� CIT 4. िवभागीय�ितिनिध, आय.अपी.अिध., मुंबई/DR, ITAT, Mumbai 5. गाड�फाइल/Guard file. BY ORDER, //True Copy// (Asstt. Registrar), ITAT, MUMBAI