JAYA,PUNE vs. ITO, WARD-7(3), PUNE, PUNE

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ITA 1860/PUN/2026Status: DisposedITAT Pune05 August 2026AY 2018-194 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal noted that the quantum addition, which formed the basis for the penalty, had been set aside by a previous Tribunal order for fresh adjudication. Therefore, the penalty could not be sustained.

What were the facts?

The assessee did not file her return of income, and the Assessing Officer made additions for unexplained cash deposits. A penalty was levied under Section 271AAC(1). The CIT(A) dismissed the assessee's appeal due to a delay.

What were the issues?

Whether a penalty under Section 271AAC(1) can be sustained when the underlying quantum addition has been set aside for fresh assessment.

Which sections of the Income-tax Act were involved?

Section 271AAC(1),Section 69A,Section 147

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, PUNE BENCHES “A”, PUNE

Before: DR. MANISH BORAD & SHRI PAVAN KUMAR GADALE

For Appellant: Mr. Pankaj and Smt. Jaya
For Respondent: Shri Rajesh Haladkar
Hearing: 03.08.2026Pronounced: 05.08.2026

PER DR. MANISH BORAD, ACCOUNTANT MEMBER : The captioned appeal at the instance of assessee pertaining to A.Y.2018-19 is against the order dated 20.02.2026 framed by the National Faceless Appeal Centre, Delhi arising out of Penalty order dated 04.06.2024 passed u/s.271AAC(1) of the Income Tax Act, 1961 (in short ‘the Act).

2.

Facts of the case emerging from the record are that the assessee is an individual and has not furnished her return of income for the year under consideration. Based on the information available on insight portal of the Department that an amount of Rs.1,03,32,100/- was deposited in the current bank account of the assessee held with HDFC bank and that return of income has not been filed, ld. Assessing Officer has

ITA No.1860/PUN/2026 Jaya reason to believe that income escaped assessment. Case of the assessee reopened u/s 147 of the Act and various statutory notices u/s 148, 142(1), 144 and show cause notices were issued to the assessee but there was no compliance from the side of assessee. Ld. Assessing Officer completed the assessment proceedings u/s. 147 r.w.s. 144 r.w.s. 144B of the Act making addition of cash deposits as unexplained money u/s.69A of the Act and also invoked the provisions of section 115BBE of the Act. Penalty proceedings have also been initiated by the ld. Assessing Officer and in the absence of any convincing explanation, eventually imposed penalty of Rs.6,19,926/- u/s.271AAC(1) of the Act. Aggrieved assessee carried the matter before the ld.CIT(A) but with a delay of 198 days. Ld.CIT(A) dismissed the appeal in limine without condoning the delay. Now the assesee has approached this Tribunal.

3.

At the time of hearing before us, the ld counsel for the assessee submitted that, vide order dated 25.02.2026 passed by the Tribunal in ITA No.2461/PUN/2025, the quantum addition of cash deposit so made by the ld. Assessing Officer has been set aside to the file of ld.JAO for framing the assessment order afresh as per fact and law. Ld. Counsel for the assessee contended that the penalty levied u/s. 271AAC of the Act does not survive.

4.

On the other hand, ld. DR merely supported the order of ld.CIT(A) and is fair enough in conceding the above position.

5.

We have heard the rival submissions and perused the said order 25.02.2026 and find that the Tribunal has restored the

ITA No.1860/PUN/2026 Jaya issue relating to the quantum addition with the following observations:

“7. We have heard the assessee who appeared in person before the Bench and Ld. DR from the side of the Revenue, and perused the material available on record. In this regard, we find that Ld. CIT(A)/NFAC has dismissed the appeal on the ground of delay of 309 days without going into merits of the case. In this regard, it was the contention of the assessee that for the first time she started the business and suffered heavy losses, therefore the business was closed down by her and since she was unaware with any of the tax related knowledge the assessment order was passed ex-parte in her absence. It was also contended before the Bench that all the receipts appearing in bank account pertains to business transactions. Subsequently, someone advised her to file an appeal against the ex- parte assessment order but in between the delay of 309 days occurred. She explained the above delay before Ld. CIT(A)/NFAC, however her contentions were not found satisfactory and therefore the appeal was not admitted for adjudication. It was the sole prayer of the assessee before the Bench that the matter be remanded back to the file of the Assessing Officer so that the assessee can substantiate her case before the Assessing Officer. 8. Considering the totality of the facts of the case and in the interest of justice and without going into merits of the case, we deem it appropriate to set-aside the order passed by Ld. CIT(A)/NFAC and restore the matter back to the file of the Assessing Officer to pass assessment order afresh and as per fact & law after providing reasonable opportunity of hearing to the assessee. The assessee is also hereby directed to respond to the notices issued by the Assessing Officer in this regard and to produce relevant documents/evidences/submissions, if any, in support of her contentions without taking any adjournment under any pretext, otherwise the Assessing Officer 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.”

6.

Since the very foundation of the penalty in the extant appeal, which is upon the quantum addition made u/s.69A of the Act, has been set aside by the Tribunal for fresh adjudication to ld. JAO, the penalty levied u/s. 271AAC of the Act cannot be sustained at this stage. We, therefore, set aside the orders of the lower authorities and direct the Assessing Officer to delete the penalty. However, the Revenue shall be at liberty to take appropriate action, if so warranted, depending

ITA No.1860/PUN/2026 Jaya upon the outcome of the fresh adjudication in the quantum proceedings.

7.

In the result, the appeal filed by the assessee is allowed.

Order pronounced on this 05th day of August, 2026.

Sd/- Sd/- (PAVAN KUMAR GADALE) (MANISH BORAD) JUDICIAL MEMBER ACCOUNTANT MEMBER पुणे / Pune; दिन ांक / Dated : 05th August, 2026. Satish

Satish Kumar Madishetty Digitally signed by Satish Kumar Madishetty Date: 2026.08.06 10:20:21 +05'30'

आदेश की प्रतिलिपि अग्रेपिि / Copy of the Order forwarded to : अपील र्थी / The Appellant. 1. प्रत्यर्थी / The Respondent. 2. 3. The Pr. CIT concerned. विभ गीय प्रतितनधि, आयकर अपीलीय अधिकरण, “A” बेंच, 4. पुणे / DR, ITAT, “A” Bench, Pune. ग र्ड फ़ इल / Guard File. 5.

आिेश नुस र / BY ORDER,

// True Copy // Assistant Registrar, आयकर अपीलीय अधिकरण, पुणे / ITAT, Pune.

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