KARMIC ENERGY PRIVATE LIMITED,DELHI vs. INCOME TAX OFFICER WARD 14(2), DELHI

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ITA 1681/DEL/2026Status: DisposedITAT Delhi17 July 2026AY 2016-173 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal held that the CIT(A) should adjudicate the quantum appeal before the penalty appeal, as the penalty's foundation lies in the quantum assessment order. The impugned order was set aside.

What were the facts?

The assessee's appeal is against an order upholding a penalty under Section 271(1)(c). The assessee argued that the penalty appeal was decided while the quantum appeal, which forms the basis for the penalty, was still pending before the CIT(A).

What were the issues?

Whether a penalty appeal can be adjudicated before the finalization of the related quantum appeal. The procedural propriety of deciding a penalty before the underlying assessment is finalized.

Which sections of the Income-tax Act were involved?

Section 271(1)(c)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “A” BENCH, DELHI

Before: SHRI ANUBHAV SHARMA & SHRI SANJAY AWASTHI

Hearing: 09.07.2026

PER ANUBHAV SHARMA, JM:

This appeal is preferred by the assessee against the order dated 04.02.2026 of the Ld. National Faceless Appeal Centre (NFAC) Delhi

P a g e | 2 ITA No. 1681/Del/2026 Karmic Energy Pvt. Ltd. (AY: 2016-17) (hereinafter referred as Ld. First Appellate Authority or in short Ld. ‘FAA’) in DIN & Order No: ITBA/NFAC/S/250/2025-26/1085580449(1) arising out of the assessment order dated 25.06.2019 u/s 271(1)(c) of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) passed by ITO, Ward 14(2) for AY: 2016-17.

2.

Heard and perused the record. The ld. Counsel has submitted that the impugned order has been passed by ld. CIT(A) upholding the penalty u/s 271(1)(c) of the Act while quantum appeal was still pending before the ld. CIT(A). Ld. Counsel has submitted that this aspect was specifically mentioned to the ld. First Appellate Authority still the impugned order has been passed. At the time of hearing also ld. Counsel stated at bar that the quantum appeal is still pending before ld. First Appellate Authority.

3.

In light of aforesaid we are of the considered view that ld. First Appellate Authority exercising co-terminus powers of Assessing Officer when hears first appeal on quantum the same should be adjudicated prior to adjudication of penalty appeal which has the foundation in the quantum order of assessment.

4.

Accordingly, we allow the appeal of assesse for statistical purposes and setting aside the impugned order we restore the issues on merits to the

P a g e | 3 ITA No. 1681/Del/2026 Karmic Energy Pvt. Ltd. (AY: 2016-17) files of ld. CIT(A) to pass order afresh after taking into consideration the aforesaid observations of the Bench.

Order pronounced in the open court on 17.07.2026

Sd/- Sd/- (Sanjay Awasthi) (Anubhav Sharma) ACCOUNTANT MEMBER JUDICIAL MEMBER

Dated 17.07.2026 Rohit, Sr. PS Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI

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