AKSHAY ARUN SHETTY,NAVI MUMBAI vs. INCOME TAX OFFICER 15(3)(1), MUMBAI, AAYAKAR BHAWAN, MUMBAI

At the outset, it is noticed that there is a delay of 512 days in filing the present appeal before the Tribunal. The assessee has filed an affidavit explaining the reasons for the delay. The assessee has submitted that the notices issued by the Department as well as appellate authorities were received on the email id and mobile number registered by his then Chartered Accountant, who failed to keep him

We have considered the affidavit and the submissions made by the assessee. The reasons assigned for the delay are duly supported by a sworn affidavit. Considering the entirety of facts and the settled proposition that substantial justice deserves to be preferred over technical considerations, we are satisfied that the assessee was prevented by sufficient cause from filing the appeal within the prescribed period. Accordingly, the delay of 512 days in filing the present appeal is condoned and the appeal is admitted for adjudication.

Brief facts of the case are that the Assessing Officer completed assessment u/s 147 r.w.s. 144 of the Act and made an addition of Rs.20,00,000/- u/s 69A on account of cash deposits in the bank account of the assessee. Consequent thereto, penalty proceedings u/s 271(1)(c) were initiated and penalty of Rs.4,42,900/- was levied by the Assessing Officer. The action of the Assessing Officer was subsequently confirmed by the Ld CIT(A), against which the assessee is in further appeal before us.

The Ld Authorised Representative submitted that the very quantum addition forming the basis of the impugned penalty no longer survives. It was submitted that the Coordinate Bench of the Tribunal in ITA No.1310/Mum/2025 for A.Y. 2013-14 vide order dated 30.04.2025 has restored the entire quantum matter to the file of the Assessing Officer for de novo adjudication after granting adequate

The Ld Departmental Representative relied upon the orders of the lower authorities.

We have heard the rival submissions and perused the material available on record. We find that the impugned penalty u/s 271(1)(c) has been levied with reference to the addition of Rs.20,00,000/- made u/s 69A in the assessment order. It is an admitted position that the Coordinate Bench of the Tribunal in assessee's own case in ITA No.1310/Mum/2025 dated 30.04.2025 has restored the very quantum addition to the file of the Assessing Officer for de novo adjudication. Once the foundation on which the penalty has been levied has itself been set aside and restored for fresh examination, the penalty cannot survive independently and has no leg to stand at this stage. However, the Assessing Officer shall be at liberty to initiate and levy penalty, if so warranted in accordance with law, pursuant to the outcome of the fresh assessment proceedings. We, therefore, direct the Assessing Officer to cancel the impugned penalty for the present.

In the result, the appeal of the assessee is allowed. 9. Order pronounced in the open court on 08/06/2026.