SHRI SAIBABA CHARITABLE TRUST,THANE vs. INCOME TAX OFFICER, THANE

This appeal is filed by the assessee against the order dated 07.06.2024 passed by the Ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi for A.Y. 2021-22 arising from penalty order passed u/s 270A of the Income Tax Act, 1961.

The effective grievance of the assessee is against confirmation of penalty levied u/s 270A of the Act in respect of denial of exemption claimed u/s 11 and 12 of the Act and validity of initiation of penalty proceedings for alleged under-reporting of income.

Brief facts of the case are that the assessee trust filed its return of income declaring Nil income. The case was selected for scrutiny and assessment was completed u/s 144 of the Act determining total income at Rs.28,52,136/- by denying exemption claimed u/s 11 and 12 of the Act on the ground that the assessee did not possess valid registration u/s 12A/12AB during the relevant assessment year. Consequent thereto, penalty proceedings u/s 270A of the Act were initiated for under- reporting of income and penalty of Rs.3,47,433/- came to be levied vide order dated 26.06.2023.

Aggrieved, the assessee preferred appeal before the Ld. CIT(A). The Ld. CIT(A) dismissed the appeal and upheld the levy of penalty by observing that despite several opportunities granted during appellate proceedings, the assessee did not make any compliance and therefore the appeal was decided on the basis of material available on record.

Before us, the Ld. Authorised Representative submitted that the very assessment order on the basis of which penalty u/s 270A was levied has subsequently been set aside by the Ld. CIT(A) vide order dated 30.04.2025 and restored back to the file of the Assessing Officer for fresh adjudication. 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.

The Ld. Departmental Representative fairly submitted that the quantum assessment order has been restored by the Ld. CIT(A) to the file of the Assessing Officer for fresh adjudication.

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.28,52,136/- made in the assessment framed u/s 144 of the Act. Subsequently, the Ld. CIT(A), while deciding the quantum appeal vide order dated 30.04.2025, restored the assessment order back to the file of the Assessing Officer for fresh adjudication after granting adequate opportunity to the assessee. The operative part of the said order reads as under:

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.

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