ASHA SANJAY GAWDE,MUMBAI vs. INCOME TAX OFFICER, MUMBAI

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ITA 9217/MUM/2025Status: DisposedITAT Mumbai19 June 2026AY 2017-184 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 since the assessment order, which formed the basis for the penalty, was set aside and restored for fresh adjudication, the penalty cannot independently survive. The Assessing Officer is at liberty to initiate penalty proceedings afresh based on the outcome of the de novo assessment.

What were the facts?

The assessee's assessment was completed under section 147 r.w.s. 144 of the Income-tax Act, leading to a penalty under section 270A. The penalty was confirmed by the CIT(A). However, the quantum assessment proceedings were later restored to the Assessing Officer for de novo adjudication by a coordinate bench of the Tribunal.

What were the issues?

Whether a penalty levied under section 270A can be sustained when the underlying assessment order has been set aside and restored for de novo assessment.

Which sections of the Income-tax Act were involved?

Section 270A,Section 147,Section 144

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “A” BENCH, MUMBAI

Before: SMT BEENA PILLAI & SHRI JAGADISH

For Appellant: Shri Sudhakar Tiwari, CA
For Respondent: Shri Surendra Mohan- SR. DR
Hearing: 18.06.2026Pronounced: 19.06.2026

Per: SHRI JAGADISH, A.M.: 1. This appeal is filed by the assessee against the order dated 27.11.2025 passed by the Ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi [hereafter referred as Ld. CIT(A)] for A.Y. 2017-18, arising out of penalty order passed u/s 270A of the Income-tax Act, 1961.

2.

The assessee has raised various grounds challenging the confirmation of penalty of Rs.2,98,918/- levied u/s 270A of the Act.

ITA No.9217/M/2025 Asha Sanjay Gawde 3. Briefly stated, the assessment in the case of the assessee was completed u/s 147 r.w.s. 144 of the Act determining total income at Rs.24,17,022/-. Consequent thereto, the Assessing Officer initiated penalty proceedings u/s 270A and levied penalty of Rs.2,98,918/- for under-reporting/misreporting of income. The action of the Assessing Officer was confirmed by the Ld. CIT(A). Aggrieved, the assessee is in appeal before us. The assessment giving rise to the impugned penalty was completed vide order dated 11.03.2025. The penalty of Rs.2,98,918/- was thereafter levied vide order dated 26.08.2025 u/s 270A of the Act.

4.

At the time of hearing, the Ld. Authorised Representative submitted that the coordinate Bench of the Tribunal in assessee's own case in ITA No. 9218/Mum/2025 vide order dated 24.04.2026, arising from the quantum assessment proceedings, has restored the entire assessment to the file of the Assessing Officer for de novo adjudication. It was submitted that once the very foundation on which the penalty u/s 270A has been levied has been set aside and restored to the file of the Assessing Officer, the impugned penalty cannot survive.

5.

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

6.

We have heard the rival submissions and perused the material available on record. The undisputed fact before us is that the impugned penalty u/s 270A emanates from the assessment order passed u/s 147 r.w.s. 144 of the Act. It has been brought to our notice that in the quantum proceedings, the coordinate Bench of the Tribunal in ITA No. 9218/Mum/2025 dated 24.04.2026 has restored the assessment to the file of the Assessing Officer for de novo assessment. Once the assessment order, which constitutes the very basis for levy of penalty,

ITA No.9217/M/2025 Asha Sanjay Gawde has itself been set aside and restored to the file of the Assessing Officer, the penalty levied on the basis of such assessment cannot independently survive.

7.

It is a settled proposition that where the quantum proceedings giving rise to penalty are set aside for fresh adjudication, the penalty founded upon such assessment order cannot be sustained. Since the Assessing Officer has been directed to frame the assessment afresh, he shall be at liberty to initiate and levy penalty, if so warranted, in accordance with law on the basis of the outcome of the fresh assessment proceedings. As on date, the impugned penalty has no legs to stand upon.

8.

In view of the aforesaid facts, we set aside the order of the Ld. CIT(A) and cancel the penalty of Rs.2,98,918/- levied u/s 270A of the Act. However, the Assessing Officer shall be free to take such action as may be permissible under law consequent to the de novo assessment proceedings directed by the Tribunal in the quantum appeal.

9.

In the result, the appeal of the assessee is allowed.

Order pronounced in the open court on 19/06/2026.

Sd/- Sd/- (BEENA PILLAI) (JAGADISH) Judicial Member Accountant Member

Mumbai, Dated: 19/06/2026 Ashwani Rao Sr. Private Secretary

ITA No.9217/M/2025 Asha Sanjay Gawde Copy of the order forwarded to: 1. Appellant 2. Respondent 3. The CIT 4. The CIT (Appeals) 5. The DR, I.T.A.T. By order

(Assistant Registrar) ITAT, Mumbai

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