PUNYA STHALI TIRTH TRUST,MURADNAGAR vs. ITO WARD EXEMPTION 2(4), DELHI

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ITA 85/DEL/2026Status: DisposedITAT Delhi22 May 2026AY 2017-183 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 if the primary addition or assessment itself is invalid, then no penalty can be sustained. Since the reopening and consequent assessment were quashed, the penalty levied under Section 271AAC(1) was also quashed.

What were the facts?

The assessee trust appealed against a penalty order under Section 271AAC(1) for AY 2017-18. The original assessment order, which formed the basis for the penalty, had been quashed by a coordinate bench due to irregularities in the approval for reopening.

What were the issues?

Whether penalty under Section 271AAC(1) can be sustained when the assessment order on which it is based has been quashed. The validity of the assumption of jurisdiction for reopening the assessment.

Which sections of the Income-tax Act were involved?

Section 271AAC(1),Section 151

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “B” BENCH, DELHI

For Appellant: Ms. Vaishnavi Yadav, Adv
Hearing: 19.05.2026Pronounced: 22.05.2026

P a g e | 1 ITA No.85/Del/2026 Punya Sthali Tirth Trust (AY: 2017-18) IN THE INCOME TAX APPELLATE TRIBUNAL “B” BENCH, DELHI BEFORE SHRI S RIFAUR RAHMAN, ACCOUNTANT MEMBER & SHRI ANUBHAV SHARMA, JUDICIAL MEMBER ITA No.85/Del/2026 (Assessment Year: 2017-18) Punya Sthali Tirth Trust Vs. ITO, Ward (Exemption)- Gang Nahar Road, 2(4), Civic Centre, Murad Nagar Minto Road, U.P. 201206 New Delhi – 110002 स्थायीलेखासं./जीआइआरसं./PAN/GIR No: AABTP8479P Appellant .. Respondent Appellant by : Ms. Vaishnavi Yadav, Adv. Respondent by : Sh. Rajesh Kumar Dhanesta, Sr. DR Date of Hearing 19.05.2026 Date of Pronouncement 22.05.2026 O R D E R PER ANUBHAV SHARMA, JM: This appeal is preferred by the assessee against the order dated 07.11.2025 of the Ld. National Faceless Appeal Centre, Delhi (hereinafter referred to as the First Appellate Authority or ‘the ld. FAA’ for short) in DIN & Order No : ITBA/NFAC/S/250/2025-26/1082396297(1) arising out of the penalty order dated 20.03.2024 u/s 271AAC(1) of the Income Tax Act, 1961

P a g e | 2 ITA No.85/Del/2026 Punya Sthali Tirth Trust (AY: 2017-18) (hereinafter referred to as ‘the Act’) passed by Income Tax Faceless Assessment Unit, for AY: 2017-18.

2.

On hearing both sides we find that vide ITA No. 5713/Del/2025 for AY: 2017-18 a Coordinate Bench vide order dated 24.12.2025 has taken into consideration the irregularities in grant of approval u/s 151 of the Act to hold that assumption of jurisdiction and the consequent order is vitiated and the Coordinate Bench had quashed the impugned reopening itself.

3.

Ld. DR has contended that present penalty proceedings are separate and distinct. However, we are of the considered view that when the addition itself falls and is deleted there can be no sustainable allegation for levy of penalty u/s 271AAC(1) which can be determined only on the basis of addition made in corresponding sections of deeming income. Therefore, we allow the appeal of the assessee and the impugned penalty is quashed.

Order pronounced in the open court on 22.05.2026

Sd/- Sd/- (Anubhav Sharma) (S Rifaur Rahman) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated 22.05.2026

P a g e | 3 ITA No.85/Del/2026 Punya Sthali Tirth Trust (AY: 2017-18) Rohit, Sr. PS

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