JAY NANDA MATAJI CO OPERATIVE CREDIT SOCIETY LIMITED ,MUMBAI vs. ITO WARD 41(4), MUMBAI

These two appeals filed by the assessee are directed against separate orders passed by the Learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi, arising out of penalty orders passed u/s 270A and 272A(1)(d) of the Income Tax Act, 1961 for A.Y. 2017-18. Since both the appeals arise out of the same assessment proceedings, they were heard together and are disposed of by this consolidated order for the sake of convenience.

Brief facts of the case are that the assessee had not filed its return of income for the year under consideration. Consequently, the assessment was completed ex parte u/s 144 of the Act wherein the Assessing Officer made addition of Rs.33,33,677/- on account of cash deposits in bank account and further addition of Rs.5,51,357/- towards interest credited in the bank account. Thereafter, penalty proceedings u/s 270A of the Act were initiated in respect of the addition of Rs.5,51,357/- treated as under-reported income and penalty of Rs.85,184/-, being 50% of the tax payable thereon, was levied. The assessee contended before the lower authorities that the fixed deposits were made out of members’ funds; however, no supporting documentary evidence, books of account or registration details were furnished. Accordingly, the penalty levied by the Assessing Officer came to be confirmed by the Ld. CIT(A). 3. During the course of hearing, the Ld. Authorized Representative (AR) submitted that the quantum appeal arising out of the assessment order has already been restored by the Coordinate Bench of the Tribunal to the file of the Ld. CIT(A) vide order in ITA No.257/Mum/2022 dated 28.06.2022 for fresh adjudication. It was therefore submitted that since the very basis on which the penalty has been levied no longer survives, the impugned penalty order may either be deleted or restored back to the file of the Ld. CIT(A). 4. The Ld. Departmental Representative (DR), on the other hand, 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 penalty u/s 270A has been levied in respect of the addition of Rs.5,51,357/- towards interest income treated as under-reported income. It is an undisputed fact that the quantum proceedings arising from the same assessment order have already been restored by the Coordinate Bench to the file of the Ld. CIT(A) for fresh adjudication. Once the quantum proceedings themselves have not attained finality, the penalty proceedings arising therefrom also cannot independently attain finality. In these facts and circumstances, we deem it appropriate to restore the impugned penalty order also to the file of the Ld. CIT(A) to be adjudicated afresh in accordance with law after disposal of the quantum appeal. Needless to say, reasonable opportunity of being heard shall be granted to the assessee. 6. In the result, appeal in ITA No.1871/Mum/2026 is allowed for statistical purposes.

Brief facts of the case are that the Assessing Officer levied penalty of Rs.30,000/- u/s 272A(1)(d) of the Act for alleged non- compliance of notices issued u/s 142(1) dated 28.12.2017, 13.09.2019 and 14.10.2019. Aggrieved, the assessee preferred appeal before the Ld. CIT(A), who confirmed the action of the Assessing Officer. 8. During the course of hearing, the Ld. AR submitted that the assessment proceedings in connection with which the notices were issued have already been restored to the file of the Ld. CIT(A). Without prejudice, it was submitted that all the notices substantially called for similar details and therefore levy of separate penalty for each notice is excessive and unreasonable. It was accordingly prayed that the penalty may either be deleted or suitably reduced. 9. The Ld. DR, on the other hand, relied upon the orders of the lower authorities.

We have heard the rival submissions and perused the material available on record. The Assessing Officer has levied penalty of Rs.30,000/- u/s 272A(1)(d) alleging non-compliance of three notices issued u/s 142(1) of the Act. On perusal of the assessment and penalty orders, it is observed that the notices substantially called for similar information/details in connection with the assessment proceedings. In our considered view, in the peculiar facts of the present case, levy of separate penalty for each such notice would be harsh and excessive. Considering the totality of facts and circumstances, we deem it appropriate to restrict the penalty to Rs.10,000/- for one effective default. The Assessing Officer is directed accordingly.

In the result, appeal in ITA No.1872/Mum/2026 is partly allowed.

In the combined result, ITA No.1871/Mum/2026 is allowed for statistical purposes and ITA No.1872/Mum/2026 is partly allowed.