DCIT, CIRCLE-2(1), HYDERABAD vs. GAYATRI PROJECTS LIMITED, HYDERABAD

आयकर अपील�य अ�धकरण, हैदराबाद पीठ IN THE INCOME TAX APPELLATE TRIBUNAL Hyderabad ‘ B ‘ Bench, Hyderabad �ी रिवश सूद,�ाियक सद� एवं �ी मधुसूदन साविड़या लेखा सद� सम� | Before Shri Ravish Sood, Judicial Member A N D Shri Madhusudan Sawdia, Accountant Member आ.अपी.सं /ITA Nos.2290 to 2292/Hyd/2025 (िनधा�रण वष�/Assessment Years: 2020-21 & 2021-22) Deputy Commissioner of Vs. Gayatri Projects Limited Income Tax Hyderabad Circle 2(1) Hyderabad PAN:AAACG8040K (Appellant) (Respondent) िनधा��रती �ारा/Assessee by: Advocate R. Mohan Kumar राज� व �ारा/Revenue by:: Dr. Narendra Kumar Naik, CIT (DR) सुनवाई की तारीख/Date of hearing: 16/04/2026 घोषणा की तारीख/Pronouncement: 29/04/2026 आदेश/ORDER Per Madhusudan Sawdia, A.M.:

These three appeals are filed by the Revenue feeling aggrieved by the separate orders passed by the Learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi (“Ld. CIT(A)”) all dated 16.10.2025 for the A.Ys.2020-21 & 2021-22. Since identical issues have been raised by the Revenue in all these three appeals, for the sake of convenience, these were heard together and are being disposed of by this common and consolidated order. ITA No 2290/Hyd/2025: 2. The Revenue has raised the following grounds of appeal:

4 the order of this Tribunal in the quantum appeal of the assessee in ITA No.1112/Hyd/2025 dated 10.12.2025 and submitted that the Tribunal has restored the quantum issue to the file of the Ld. CIT(A) for adjudication in terms of the observations contained therein. It was submitted that since the quantum appeal has been set aside and is presently pending before the Ld. CIT(A), the corresponding penalty proceedings under section 270A of the Act, being dependent on the outcome of the quantum proceedings, are also required to be restored to the file of the Ld. CIT(A). Accordingly, the Ld. DR prayed that the present penalty appeal may also be set aside to the file of the Ld. CIT(A) for adjudication after disposal of the quantum appeal.

“8. Thus, following the earlier orders of this Tribunal and the appeals filed by the assessee before the Ld. CIT (A) were dismissed in limine due to non-participation of the assessee, we set aside the impugned orders of the Ld. CIT (A) for the A.Ys 2018-19, 2020-21 and 2021-2022 and restore the matters to the record of the Ld. CIT (A) for fresh adjudication of the appeals on the same terms as directed by the Tribunal in earlier appeal of the assessee for the A.Y 2016-17”.

5 8. On perusal of the above, we observed that the quantum addition, on the basis of which the penalty under section 270A of the Act has been levied, has already been set aside by this Tribunal to the file of the Ld. CIT(A) for fresh adjudication. Thus, the very foundation of the penalty proceedings is presently unsettled and is pending adjudication before the Ld. CIT(A). It is a settled position of law that penalty proceedings are consequential to the quantum proceedings and cannot survive independently when the quantum issue itself has been restored for fresh adjudication. In view of the above, we deem it appropriate to set aside the impugned order of the Ld. CIT(A) and restore the matter to his file with a direction to adjudicate the penalty issue afresh after adjudication of the quantum appeal, and in accordance with law. The Ld. CIT(A) shall provide adequate opportunity of being heard to the assessee before passing the order. The assessee is also directed to cooperate in the appellate proceedings and not to seek unnecessary adjournments. 9. In the result, appeal of the Revenue in ITA No. 2290/Hyd/2025 is allowed for statistical purposes. ITA Nos. 2291 & 2292/Hyd/2025: 10. These two appeals of the Revenue relates to levy of penalty under the relevant provisions of the Act, arising from the corresponding quantum proceedings. It is observed that the quantum issues, on the basis of which the present penalties have been levied, have already been set aside by this Tribunal in ITA Nos.1112 & 1113/Hyd/2025 dated 10.12.2025 to the file of the Ld. CIT(A) for fresh adjudication in terms of the directions specified therein. Thus, the very foundation of the present penalty proceedings is presently unsettled and pending adjudication before the Ld. CIT(A). It is a settled position of law

6 that penalty proceedings are consequential in nature and cannot be adjudicated independently when the quantum issues themselves have been restored for fresh consideration. Accordingly, following the view adopted by us in ITA No.2290/Hyd/2025, we set aside the impugned orders in both these appeals and restore the matters to the file of the Ld. CIT(A) on the same terms. 11. In the result, appeals filed by the Revenue in ITA Nos. 2291 to 2292/Hyd/2025 are allowed for statistical purposes.