PERIWAL POLYMERS PVT LTD,NEW DELHI vs. JCIT, CENTRAL CIRCLE CENTRAL RANGE-04 DELHI, NEW DELHI

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ITA 2439/DEL/2025Status: DisposedITAT Delhi17 July 2026AY 2020-213 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 since the quantum assessment orders, which formed the basis for the penalties, were quashed, the penalties could not be sustained. The Tribunal relied on a Gujarat High Court decision where penalty proceedings were quashed along with the reopening of assessment.

What were the facts?

The assessee's appeals before the ITAT concerned the levy of penalty under Section 271DA of the Income Tax Act. The assessment orders for the relevant years had been previously quashed by the ITAT due to a mechanical approval by the Addl. CIT.

What were the issues?

Whether penalty under Section 271DA can be sustained when the underlying assessment orders have been quashed. The validity of penalty proceedings initiated subsequent to the quashing of assessment orders.

Which sections of the Income-tax Act were involved?

Section 271DA,Section 153D

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI BENCH “A” NEW DELHI

Before: SHRI ANUBHAV SHARMA & SHRI SANJAY AWASTHI

For Appellant: Adv & Sh. Jaind Jaiswal, Adv
For Respondent: Shri Jitender Singh, CIT DR
Hearing: 14.07.2026

ITA Nos.2438, 2439, 2440 & 2472/DEL/2025 PERIWAL POLYMERS PVT. LTD. IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “A” NEW DELHI BEFORE SHRI ANUBHAV SHARMA, JUDICIAL MEMBER AND SHRI SANJAY AWASTHI, ACCOUNTANT MEMBER ITA Nos.2438 to 2440/DEL/2025 Assessment Years: 2019-20 to 2021-22 M/S PERIWAL POLYMERS PVT. LTD., Vs. JCIT, 134, DDA Sheds Okhla Industrial Central Circle, Area, Phase-II, New Delhi, Central Range-04, New Delhi, Delhi 110020. Delhi 110055. C/o Dr. Ravi Gupta, B-41, LGF, Kailash Colony, New Delhi. PAN No. AAACP5324M Appellant Respondent & ITA No.2472/DEL/2025 Assessment Year: 2018-19 M/S PERIWAL POLYMERS PVT. LTD., Vs. JCIT, 134, DDA Sheds Okhla Industrial Central Circle, Area, Phase-II, New Delhi, Central Range-04, New Delhi, Delhi 110020. Delhi 110055. C/o Dr. Ravi Gupta, B-41, LGF, Kailash Colony, New Delhi. PAN No. AAACP5324M Appellant Respondent Assessee by Sh. Gagan R Khandelwal, Adv & Sh. Jaind Jaiswal, Adv Sh. Ansh Khandelwal, AR Revenue by Shri Jitender Singh, CIT DR Date of hearing: 14.07.2026 Pronouncement on 17.07.2026 O R D E R PER BENCH: 1. This is a batch of four appeals which have a common issue of levy of penalty u/s 271DA of the Income Tax Act, 1961 (hereafter as “the Act”).

ITA Nos.2438, 2439, 2440 & 2472/DEL/2025 PERIWAL POLYMERS PVT. LTD. 2. Right at the outset, the Ld. AR placed on record the orders of ITAT in the assessee’s own case in the quantum matter for the four years under consideration, whereby the assessment orders themselves have been quashed for all the assessment years from 2018-19 to 2021-22 [ITA Nos. 2429 to 2432, order dated 25.02.2026]. It was pointed out by the Ld. AR that the approval given by Ld. Addl. CIT u/s 153D of the Act was determined to be mechanical and without application of mind and thereby the assessment orders were quashed, even though the grounds on merit were not adjudicated. It was the submission that the present appeals before this Bench were directly emanating from the quantum orders in those appeals (supra) and therefore the impugned orders also deserved to be quashed.

2.1 The Ld. DR, on the other hand, stated that since the grounds on merit had not been adjudicated, hence, the penalty needed to be judged on the basis of fact finding done by the Ld. AO and affirmed by the Ld. CIT(A). To this extent, the Ld. DR took us through the detailed order of the Ld. CIT(A) in this regard.

3.

We have carefully considered the rival submissions and have gone through the documents before us. While it is true that in quashing the quantum assessment orders the coordinate bench of ITAT has not actually dealt with the merits of the case, however, since the genesis of the impugned penalties are the orders in quantum only, hence, it is felt that

ITA Nos.2438, 2439, 2440 & 2472/DEL/2025 PERIWAL POLYMERS PVT. LTD. once the foundation is demolished then the building cannot stand d’hors the foundation. We are fortified in this assessment of the situation by the case of Shardaben Hashmukhbhai Patel reported in 186 taxmann.com 110 (Gujarat) [2026]. In para 7 of this order the Hon’ble High Court has observed as under in respect to penalty u/s 271DA of the Act: -

“Since the Court is of the opinion that, in the case of the mother of the assessee, who is the co-owner of the land in question, the reopening of assessment has already been quashed and set aside, the subsequent proceedings for initiation of penalty; along with the show cause notice, are also liable to be quashed and set aside. [para 7]” Considering the discussion above, it deserves to be held that the impugned penalties cannot be sustainable in the eyes of law.

4.

In the result, appeals of the assessee are allowed.

Order pronounced in the open court on 17.07.2026 Sd/- Sd/- (ANUBHAV SHARMA) (SANJAY AWASTHI) JUDICIAL MEMBER ACCOUNTANT MEMBER Dated: 17.07.2026 *Kavita Arora, Sr. P.S. Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI

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