SRI NITIN RAMESH KASHALKAR,MUMBAI vs. ITO, WARD-3(1), THANE

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ITA 719/MUM/2026Status: DisposedITAT Mumbai15 May 2026AY 2015-163 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 original quantum assessment order, which formed the basis of the penalty, was set aside by a Coordinate Bench, the penalty could not independently survive. The penalty proceedings are consequential to the assessment.

What were the facts?

The assessee appealed against a penalty order under section 271(1)(c) for AY 2015-16. The penalty was levied based on the original quantum assessment.

What were the issues?

Whether a penalty order under Section 271(1)(c) can survive independently when the underlying assessment order has been set aside and restored for fresh adjudication.

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, ‘B’ BENCH

For Appellant: Shri Rakesh Mishra
For Respondent: Shri Swapnil Choudhari
Hearing: 14/05/2026Pronounced: 15/05/2026

आदेश / O R D E R PER AMIT SHUKLA (J.M): The aforesaid appeal has been preferred by the assessee against the impugned order dated 27/11/2025 passed by the National Faceless Appeal Centre (NFAC), Delhi, arising out of the penalty proceedings initiated under section 271(1)(c) of the Income Tax Act, 1961 for the Assessment Year 2015-16.

2 ITA No.719/Mum/2026 Shri Nitin Ramesh Kashalkar 2. At the outset, it has been brought to our notice that the very quantum assessment, on the basis of which the impugned penalty has been levied, has already been set aside by the Coordinate Bench of the Tribunal vide order dated 06/04/2026 passed in ITA No.18/Mum/2026, restoring the matter back to the file of the Assessing Officer for fresh adjudication in accordance with law. Once the very substratum and foundation of the assessment order itself no longer survives in its present form and the entire issue has been restored back for fresh consideration, then any penalty levied consequentially upon such original assessment order cannot independently survive. The penalty proceedings under section 271(1)(c) are purely incidental and consequential to the assessment proceedings and once the assessment itself has been set aside, the superstructure of penalty built upon such assessment also collapses automatically.

3.

Accordingly, in view of the aforesaid facts and circumstances, we hold that the impugned penalty order passed under section 271(1)(c) cannot be sustained at this stage. The same is therefore deleted.

4.

In the result, appeal of the assessee is allowed.

Order pronounced on 15th May, 2026.

Sd/- Sd/- (PRABHASH SHANKAR) (AMIT SHUKLA) ACCOUNTANT MEMBER JUDICIAL MEMBER Mumbai; Dated 15/05/2026

3 ITA No.719/Mum/2026 Shri Nitin Ramesh Kashalkar KARUNA, sr.ps Copy of the Order forwarded to : 1. The Appellant 2. The Respondent. 3. CIT 4. DR, ITAT, Mumbai 5. Guard file. //True Copy// BY ORDER,

(Asstt. Registrar) ITAT, Mumbai

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