MR. VARUN SRINIVASAN,CHENNAI vs. CIT(IT),, CHENNAI

आयकर अपीलीय अिधकरण, ’ए’ �ायपीठ, चे�ई IN THE INCOME-TAX APPELLATE TRIBUNAL ‘A’ BENCH, CHENNAI �ी इंटूरी रामाराव, लेखा सद� एवं �ी एस.एस. िव�ने� रिव, �ाियक सद� के सम� । Before Shri Inturi Rama Rao, Accountant Member & Shri S.S. Viswanethra Ravi, Judicial Member आयकर अपील सं./I.T.A. No.885/Chny/2026 िनधा�रण वष�/Assessment Year: 2017-18 Mr. Varun Srinivasan, Vs. The CIT (IT), 133, Cholan Street Alwarthirunagar, Chennai. Chennai, 600087, Tamil Nadu. [PAN: FCJPS4295F] (अपीलाथ�/Appellant) (��थ�/Respondent) अपीलाथ� की ओर से / Appellant by : Mr. D. Anand, Advocate ��थ� की ओर से/Respondent by : Ms. R. Anita, CIT सुनवाई की तारीख/ Date of hearing : 10.06.2026 घोषणा की तारीख /Date of Pronouncement : 21.07.2026 आदेश /O R D E R PER S.S. VISWANETHRA RAVI, JUDICIAL MEMBER: This appeal filed by the assessee is directed against the order dated 08.01.2026 passed by the ld. Commissioner of Income Tax (Appeal), Chennai-16 for the assessment year 2017-18.

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considered the under-reported income as ₹80,00,000 instead of the entire income disclosed by the assessee in the return of income in response to the notice under section 148 of the Act amounting to ₹1,58,74,960. The ld. AR drew our attention to the penalty order at page Nos. 3 to 5 of the paper book and argued that the said order merged with the order of the ld. CIT(A) passed on 22.08.2024 at page Nos. 15 to 19 of the paper book. He vehemently argued that the ld. CIT(A), vide para No. 3.2, held that the assessee is eligible to claim expenses of ₹80,00,000 being premium paid under section 57 of the Act as per the order dated 22.08.2024 passed by the ld. CIT(A) in the quantum appeal. He vehemently argued that since the assessee is eligible to claim expenses on account of premium paid, which clearly shows the merger of the penalty order in the quantum appeal, the ld. PCIT has no jurisdiction to hold that the penalty order dated 08.12.2023 is erroneous and prejudicial to the interest of the Revenue. He referred to the order of this Tribunal in the case of Anotra Realtors Pvt. Ltd. in ITA No. 1451/Chny/2024 dated 14.08.2024 and argued that the Tribunal held that the revision order passed by the PCIT under section 263 of the Act is invalid.

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Chennai-16, and submits that the computation of taxable income, credit of prepaid taxes, eligible deduction, payable net tax liability, etc., are dealt with in the computation sheet and demand notice under section 156 of the Act, which form part of the assessment order and are also enclosed for payment of tax. She argued that the argument of the ld. AR is not acceptable for the reason that the penalty proceedings as well as the assessment proceedings are independent of each other. The ld. PCIT rightly exercised his jurisdiction under section 263 of the Act in treating the penalty order as erroneous and prejudicial to the interest of the Revenue.

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grounds vide para No. 3.2 of the said order, which is at page No. 18 of the paper book. Therefore, we find force in the arguments of the ld. AR that since the penalty order merged with the order of the ld. CIT(A), no revision can be invoked under section 263 of the Act in treating the penalty order passed under section 270A of the Act vide order dated 08.12.2023 as erroneous and prejudicial to the interest of the Revenue. Thus, the order of the ld. PCIT invoking the jurisdiction under section 263 of the Act is not justified and is accordingly set aside. Thus, the grounds raised by the assessee are allowed.

Order pronounced on 21st July, 2026 at Chennai.

Sd/- Sd/- (INTURI RAMA RAO) (S.S. VISWANETHRA RAVI) ACCOUNTANT MEMBER JUDICIAL MEMBER Chennai, Dated, 21.07.2026 MM/- आदेश की �ितिलिप अ�ेिषत/Copy to: 1. अपीलाथ�/Appellant, 2.��थ�/ Respondent, 3. आयकर आयु�/CIT, Chennai/Madurai/Coimbatore/Salem 4. िवभागीय �ितिनिध/DR &

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Digitally signed MANIS by MANISH MISHRA H Date: 2026.07.23 MISHRA 09:49:00 +05'30'