HEJMADI DINESH KOTIAN,SURAT vs. COMISSIONER OF INCOME TAX (APPEALS), SURAT

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ITA 568/SRT/2026Status: DisposedITAT Surat17 July 2026AY 2010-20113 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that since the quantum appeal, which formed the basis for the penalty, was subsequently revised by the AO to 'Nil' income, the penalty order became void ab-initio.

What were the facts?

The assessee did not file a return of income, and the Assessing Officer (AO) made an addition for long-term capital gains. Penalty proceedings were initiated, and a penalty was levied. The assessee appealed to the CIT(A), who set aside the quantum appeal for fresh assessment.

What were the issues?

Whether a penalty order is sustainable when the underlying quantum addition, on which the penalty was levied, has been deleted in a subsequent proceeding.

Which sections of the Income-tax Act were involved?

Section 148,Section 147,Section 144,Section 271(1)(c)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, SURAT BENCH, SURAT

For Appellant: Shri Jaideep P Sonpal, AR
For Respondent: Shri Ashish Kumar, Sr. DR
Hearing: 15.06.2026Pronounced: 17.07.2026

IN THE INCOME TAX APPELLATE TRIBUNAL SURAT BENCH, SURAT BEFORE MS. SUCHITRA KAMBLE, JUDICIAL MEMBER AND SHRI BHAGIRATH MAL BIYANI, ACCOUNTANT MEMBER ITA No.568/SRT/2026 (Assessment Year: 2010-11) Mr. Hejmadi Dinesh Kotian, Commissioner of Income Tax Reliance Industries Ltd., (Apppelas), PO Bhatha, Correspondence Address- National Faceless Appeal Center 901, Sage Grove, (NFAC), Delhi Bldg. No.6, Garden Grove Complex, Vs. Opp. Sathya Sai Complex, Chikuwadi, Borivali West, Mumbai – 400 092 PAN: ADPPK7445K (Appellant) : (Respondent) Assessee by : Shri Jaideep P Sonpal, AR Respondent by : Shri Ashish Kumar, Sr. DR Date of Hearing : 15.06.2026 Date of Pronouncement : 17.07.2026 O R D E R PER : SUCHITRA KAMBLE, J M: The appeal filed by the assessee is against the order passed by the Learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi [in short “CIT(A)”] dated 09.02.2026 for the Assessment Year (in short “AY”) 2010-11.

2.

The assessee has raised the following grounds of appeal: “The Ld. CIT(A) erred in passing the penalty order dated 09/02/2026 without hearing and without considering that the related quantum appeal had already been set aside for fresh assessment on 20/01/2026, as the said fact maybe not within his knowledge.” 3. The assessee has not filed his return of income. On the basis of information, the assessee has made transaction in immovable properties during the Α.Υ 2010-11. Therefore, the case was reopened by issuing notice

ITA No.568/SRT/2026 Mr. Hejmadi Dinesh Kotian u/s. 148 of the Act on 31.03.2017. The above said notice was issued after getting prior approval of competent authority and was served upon the assessee through speed post. In response to the notice u/s 148 of the Income Tax Act, 1961 (in short “the Act”) the assessee neither filed his return of income within prescribed time nor furnished any reply to the notice u/s 142(1) of the Act issued by this office. Subsequently, the order u/s 144 r.w.s. 147 of the Act was completed on 30.08.2017 determining the total income of the assessee at Rs.21,27,250/- against return not filed. The addition was made of Rs.21,27,250/- on the issue long term capital gain. Penalty proceedings u/s 271(1)(c) of the Act was also initiated for concealment of income. After issuing show cause notice, since the assessee has not filed any reply the Assessing Officer (in short “the AO”) made/levied the penalty of Rs.4,38,220/- u/s 271(1)(c) of the Act. 4. Being aggrieved by the penalty order, the assessee filed appeal before the CIT(A). The CIT(A) set aside the appeal of the assessee to the file of the AO.

5.

The Ld. Authorised Representative (in short “Ld. AR”) for the assessee submitted that the quantum appeal on which the penalty has been levied is already decided and the quantum is deleted while giving order giving effect to the order of the CIT(A) vide order dated 24.02.2026 which is as follows:

ITA No.568/SRT/2026 Mr. Hejmadi Dinesh Kotian 6. The Ld. Departmental Representative (in short “Ld. DR”) relied upon the assessment order, penalty order and the order of the CIT(A).

7.

We have heard both the parties and perused all the relevant materials available on record. It is pertinent to note that the CIT(A) has set aside the assessment order relating to quantum to the file of the AO for fresh assessment and vide order dated 24.02.2026 giving effect to the order of the CIT(A), the AO has revised the income as “Nil” income. Thus, the very basis of the penalty does not survive. Hence, the penalty order becomes void ab-initio.

8.

In result, appeal of the assessee is allowed.

Order pronounced in the open court on 17.07.2026

Sd/- Sd/- (B.M. BIYANI) (SUCHITRA KAMBLE) ACCOUNTANT MEMBER JUDICIAL MEMBER Surat; Dated: 17.07.2026 * Kishore, Sr. P.S. Copy of the Order forwarded to: 1. The Appellant 2. The Respondent 3. CIT- concerned 4. DR, ITAT, Surat 5. Guard File By order,

Assistant Registrar/Sr.PS/PS ITAT, Surat Bench

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