DEVASI RAIKA VIKAS SANSTHA,NASHIK AMBAD vs. ADDL JCIT , NASHIK

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ITA 1602/PUN/2026Status: DisposedITAT Pune14 July 2026AY 2023-245 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the penalty, being based on a quantum addition that was still under appeal, could not survive independently. Therefore, the penalty issue was restored to the CIT(A) for fresh adjudication.

What were the facts?

The assessee, a trust, had a penalty of ₹67,548 levied under section 271AAC(1) based on an addition made under section 68. The assessee's appeal before the CIT(A) was dismissed due to a delay of 79 days.

What were the issues?

Whether a penalty levied under Section 271AAC(1) can be sustained when the underlying addition under Section 68 is still under appeal and has not attained finality.

Which sections of the Income-tax Act were involved?

Section 271AAC(1),Section 68,Section 250

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, A BENCH, PUNE

Before: SHRI RAMA KANTA PANDA & SHRI VINAY BHAMORE

For Appellant: Shri Vishal S Mahale
For Respondent: Shri Rajesh Haladkar, Addl

PER VINAY BHAMORE, JM :-

This appeal at the instance of assessee is directed against the order passed by Ld. CIT(A) NFAC, Delhi u/s 250 of the Income-tax Act, 1961 dated 07.01.2026 of the Income Tax Act.

2

2.

Assessee has raised following grounds of appeal:-

1.

On the facts and in the circumstances of the case and in law, the learned Assessing Officer erred in levying penalty of ₹67,548/- under section 271AAC(1) of the Income Tax Act, which is unjustified and bad in law.

2.

The learned Assessing Officer failed to appreciate that the addition of 28,66,000/- under section 68, on the basis of which the penalty has been levied, is disputed and subject matter of appeal, and therefore the levy of penalty is premature and not sustainable.

3.

The learned Assessing Officer erred in holding that the appellant had no explanation or failed to substantiate the transactions, without properly considering that the receipts represented building fund (Corpus), donation receipts duly recorded in the books of account and supported by audit records.

4.

The learned Assessing Officer erred in levying penalty without establishing that the appellant had any intention to conceal income or furnish inaccurate particulars, and the addition was made merely on account of incomplete submission of details.

5.

The learned Assessing Officer erred in passing the penalty order without providing proper and effective opportunity of being heard and without considering the factual circumstances leading to non-compliance.

6.

The appellant craves leave to add, alter, amend or withdraw any of the above grounds at the time of hearing.

3.

Facts of the case in brief are that the assessee is a trust and vide order dated 18.02.2025 assessment order u/s143(3) of the IT Act were passed wherein penalty u/s 271AAC(1) of the IT Act was initiated and subsequently vide order dated 31.07.2025 penalty of Rs. 67,548/- u/s 271AAC(1) of the IT Act was levied.

4.

Being aggrieved with the above penalty order the assessee preferred an appeal before Ld. CIT(A). Since the appeal was furnished belatedly i.e. with a delay of 79 days Ld. CIT(A) dismissed the appeal on the ground of delay itself.

3 It is the above order against which the assessee is in appeal before this Tribunal.

5.

Ld. AR appearing from the side of the assessee furnished written submission before the bench which reads as under:-

The present appeal is against the penalty levied under section 271AAC(1) of the Income-tax Act, 1961 amounting to Rs.67,648/-, which has been levied on the basis of the addition made under section 68 of the Act. It is respectfully submitted that the quantum addition forming the basis of the impugned penalty has already been restored by the Hon'ble Tribunal to the file of the learned CIT(A) for fresh adjudication on merits in ITA No. 1601/PUN/2026 vide order dated 30.06.2026. Since the quantum proceedings are pending adjudication before the learned CIT(A), the addition has not attained finality. Therefore, the penalty, which is entirely based on the said addition, cannot survive independently. It is, therefore, respectfully prayed that the impugned penalty order may kindly be set aside. Alternatively, the penalty proceedings may kindly be restored to the file of the Assessing officer or kept pending till the final adjudication of the quantum appeal.

6.

Ld. DR appearing from the side of the revenue relied on the order passed by lower authorities however did not raised any objection to the above request made by the assessee.

7.

We have heard Ld. Counsels from both the sides and perused the material available on record. We find force in the arguments of Ld. Counsel of the assessee that the impugned penalty issue needs to be restored back to the file of Ld. CIT(A), since the appeal against quantum

4 assessment order for the same assessment year is still pending for adjudication before Ld. CIT(A) which has substantial bearing on the penalty case.

8.

Considering the totality of the facts of the case and in the interest of justice we deem it appropriate to set aside the impugned order passed by Ld. CIT(A) and restore the matter involving the issue of penalty u/s 271AAC(1) back to the file of Ld. CIT(A) with a direction to condone the delay and decide the appeal, afresh and as per fact and law upon disposal of appeal against quantum assessment order for the same assessment year filed by the assessee for the same assessment year, after providing reasonable opportunity of hearing to the assessee. The assessee is also hereby directed to respond to the notices issued by Ld. CIT(A) in this regard and to produce documents, submissions and evidences in support of grounds of appeal without taking any adjournment under any pretext otherwise Ld. CIT(A) shall be at liberty to pass appropriate orders as per law. Thus the grounds of appeal raised by the assessee are allowed for statistical purposes.

5

9.

In the result the appeal filed by the assessee is allowed for statistical purposes.

Order pronounced on this 16th day of July, 2026. (R.K. PANDA) JUDICIAL MEMBER

पुणे / Pune; ददिांक / Dated: 16th July, 2026. Neeta Milind Shirsath Neeta Shirsath Date: 2026.07.20 11:48:53 +05'30' आदेश की प्रनिललपप अग्रेपर्ि / Copy of the Order forwarded to: 1. अपीलार्थी / The Appellant. 2. प्रत्यर्थी / The Respondent.

3.

The Pr. CIT concerned. 4. पवभागीय प्रनिनिधि, आयकर अपीलीय अधिकरण, "ए" बेंच, पुणे/ DR, ITAT, "A" Bench, Pune. 5. गार्ा फाइल / Guard File.

आदेशािुसार / BY ORDER,

सहायक रजिस्ट्रार/

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