VASHI INFOTECH PARK PREMISES CO OP SOCIETY LTD,MUMBAI vs. ITO WARD 28(3)(1), MUMBAI

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ITA 309/MUM/2026Status: DisposedITAT Mumbai22 May 2026AY 2018-195 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal held that since the quantum addition, which formed the basis for the penalty, was restored to the Assessing Officer for de novo adjudication, the penalty cannot survive independently. Therefore, the penalty issue should also be restored to the Assessing Officer.

What were the facts?

The assessee filed a NIL income return, but the assessment was completed with an addition of Rs. 49,96,670/-. Subsequently, a penalty under Section 270A was levied for under-reporting and misreporting of income.

What were the issues?

Whether a penalty levied under Section 270A can survive independently when the underlying quantum addition has been set aside and restored for fresh adjudication?

Which sections of the Income-tax Act were involved?

Section 270A,Section 80P

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “F” BENCH, MUMBAI

Before: SHRI NARENDER KUMAR CHOUDHRY & SHRI JAGADISH

For Appellant: Shri R.K. Jadeja
For Respondent: Shri Amit Gurav - SR. DR
Hearing: 19.05.2026Pronounced: 22.05.2026

Per: SHRI JAGADISH, A.M.:

1.

This appeal is filed by the assessee against the order dated 19.11.2025 passed by the Ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi for A.Y. 2018-19 arising from penalty order passed u/s 270A of the Income Tax Act, 1961.

2.

Brief facts of the case are that the assessee filed its return of income on 29.09.2018 declaring total income as NIL. The assessment

ITA No.309/M/2026 Vashi Infotech Park Premises Co Op Society Ltd was completed under Section 143(3) on 05.03.2021 determining total income at Rs. 49,96,670/-. During the assessment proceedings, the Assessing Officer treated Rs. 49,96,670/- as income from other sources and disallowed the deduction claimed under Section 80P of the Act. Thereafter, penalty proceedings under Section 270A were initiated for under-reporting of income in consequence of misreporting of income and, after considering the assessee’s reply, the Assessing Officer levied penalty of Rs. 30,81,762/- being 200% of the tax sought to be evaded vide order dated 31.01.2022. Aggrieved, the assessee filed an appeal before the Ld. CIT(A).

3.

On appeal, the Ld. CIT(A) confirmed the penalty holding as under:-

“6.4 After careful consideration of the facts and circumstances of the case the quantum appeal in the instant case was dismissed vide order in DIN No. ITBA/NFAC/S/250/2025-26/1082755572(1) dated 19.11.2025. So, the appellant contention is rejected and action of the appellant amounts to misreporting. Accordingly, the grounds raised on this issue are dismissed.”

4.

Before us, the Ld. Authorised Representative (AR) submitted that the quantum addition has already been restored back to the file of Assessing Officer for de novo adjudication by the Coordinate Bench in ITA Nos.307 & 308/Mum/2026 vide order dated 28.04.2026. It was submitted that once the quantum addition itself has been restored to the file of the Assessing Officer, the consequential penalty levied on such addition cannot survive independently and therefore the penalty matter may also be restored to the file of the Assessing Officer.

ITA No.309/M/2026 Vashi Infotech Park Premises Co Op Society Ltd 5. The Ld. Departmental Representative (DR) fairly submitted that the quantum petition has been restored by the Coordinate Bench of the Tribunal to the file of the Assessing Officer for fresh adjudication.

6.

We have heard the rival submissions and perused the material available on record. We find that the penalty u/s 270A has been levied on the addition of Rs. 30,81,762/- by the Assessing Officer in the penalty order. We observe that as the Coordinate Bench in ITA Nos.307 & 308/Mum/2026 has restored back the quantum addition to the file of Assessing Officer for de novo adjudication holding as under:-

“In our considered view, the nature and character of the receipts comprising the impugned surplus require proper verification at the end of the Ld. AO, particularly to examine whether the conditions for applicability of the doctrine of mutuality are satisfied. Accordingly, we deem it appropriate to restore the issue to the file of the Ld. AO för de novo verification of the nature of the assessee's funds and to examine the applicability of the doctrine of mutuality in accordance with law. Needless to say, the assessee shall be afforded a reasonable opportunity of being heard and to furnish the requisite evidences in the set-aside proceedings. We clarify that we have not expressed any opinion on the merits of the case. So, the appeal of the assessee is allowed for statistical purposes.”

7.

Thus, the very foundation on the basis of which impugned penalty was levied no longer survives at this stage. It is well settled that penalty proceedings are consequential to assessment proceedings and where the quantum addition itself has been restored for fresh adjudication, the penalty order based on such addition also cannot survive independently. Since the assessment proceedings themselves are pending fresh adjudication before the Assessing Officer, in our considered opinion, ends of justice would be met if the penalty issue is 3

ITA No.309/M/2026 Vashi Infotech Park Premises Co Op Society Ltd also restored back to the file of the Assessing Officer to be adjudicated afresh depending upon outcome of the assessment proceedings.

8.

Accordingly, we set aside the impugned order of the Ld. CIT(A) and restore the issue relating to levy of penalty u/s 270A of the Act to the file of the Assessing Officer for fresh adjudication in accordance with law after completion of assessment proceedings and after granting adequate opportunity of being heard to the assessee. The assessee is also directed to extend full cooperation and furnish requisite details as may be called for by the Assessing Officer.

9.

In the result, appeal of the assessee is allowed for statistical purposes.

Order pronounced in the open court on 22/05/2026

Sd/- Sd/-

(NARENDER KUMAR CHOUDHRY) (JAGADISH) Judicial Member Accountant Member

Mumbai, Dated: 22/05/2026 Ashwani Rao Sr. Private Secretary

ITA No.309/M/2026 Vashi Infotech Park Premises Co Op Society Ltd

Copy of the order forwarded to: 1. Appellant 2. Respondent 3. The CIT 4. The CIT (Appeals) 5. The DR, I.T.A.T.

By order

(Assistant Registrar) ITAT, Mumbai

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