ACIT, CIRCLE 1(1)(2), INTERNATIONAL TAXATION, DELHI, DELHI vs. ANITA BENTSON, DELHI

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ITITA 144/DEL/2026Status: DisposedITAT Delhi13 July 2026AY 2014-154 pages

In favour of the assessee: the Revenue's appeal was dismissed. From the AI summary of this appeal.

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal dismissed the appeal of the Revenue. The Tribunal found that the CIT(A) had deleted the penalty because the quantum addition, which formed the basis for levying the penalty, had itself been deleted. The Tribunal noted that it had already deleted the quantum additions made in the assessee's case in a separate ITAT order (ITA No.143/Del/2026). Applying the Latin maxim 'sublato fundamento cadit opus' (the foundation being removed, the structure falls), the Tribunal held that once the foundation for levying the penalty was removed by the deletion of the quantum additions, the penalty could not survive. Therefore, the Tribunal found no reason to sustain the penalty levied on the assessee and dismissed the Revenue's appeal. No issue was expressly left undecided.

What were the facts?

The Revenue has filed an appeal against the order of the CIT(A) dated 07.01.2026, which deleted a penalty of Rs. 1,37,12,706/- imposed under section 271(1)(c) of the Income Tax Act, 1961. This penalty was levied by the ACIT, Circle International Taxation-1(1)(2) on 22.03.2024 for Assessment Year 2014-15. The original assessment involved reopening the case under section 147 and making an addition of Rs. 4,88,62,389/-. The assessee, an individual and non-resident, had initially filed an ITR declaring an income of Rs. 31,53,370/-. The CIT(A) deleted the penalty because the entire disputed addition of Rs. 4,57,09,020/-, which formed the basis for the penalty, had already been deleted in a separate quantum appeal.

What were the issues?

1. Whether the Ld. CIT(A) was justified in deleting the penalty under section 271(1)(c) solely on the basis of the deletion of the quantum addition, without an independent examination of the facts and the provision itself? (Question of law and fact, concerning Section 271(1)(c)) 2. Whether penalty proceedings under section 271(1)(c) can be treated as purely consequential to quantum proceedings, especially in cases involving additions under sections 68, 69, and 69C relating to transactions? (Question of law, concerning Section 271(1)(c)) 3. Whether the deletion of penalty is sustainable in law when the corresponding quantum addition is under challenge before the Hon’ble ITAT? (Question of law, concerning Section 271(1)(c)) 4. Whether the deletion of penalty prior to the final adjudication of quantum issues is premature and prejudicial to the interests of the Revenue? (Question of law, concerning Section 271(1)(c)) Assessee's contentions: The assessee relied on the order of the CIT(A). (Not explicitly detailed, but implied reliance on the deletion of penalty due to deletion of quantum addition). Revenue's contentions: The Revenue relied on the orders of the AO. The grounds of appeal suggest that the Revenue argued for an independent examination of facts for penalty imposition and that penalty proceedings are not purely consequential, and deletion prior to final adjudication of quantum is premature.

Which sections of the Income-tax Act were involved?

Section 271(1)(c),Section 147,Section 144C,Section 68,Section 69,Section 69C,Section 275(14)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI BENCH ‘D’, NEW DELHI

Before: SH. VIKAS AWASTHY & SH. NAVEEN CHANDRA

For Appellant: Shri Rahul Khare, Adv
For Respondent: Shri Rajesh Dhingra, Sr. D.R
Hearing: 13.07.2026Pronounced: 13.07.2026

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH ‘D’, NEW DELHI BEFORE SH. VIKAS AWASTHY, JUDICIAL MEMBER AND SH. NAVEEN CHANDRA, ACCOUNTANT MEMBER IT(IT)A No. 144/Del/2026 (Assessment Year : 2014-15) ACIT Vs. Anita Bentson Circle – 1(1)(2) 126, Malcha Marg International Taxation Chankyapuri, Delhi - 110021 Delhi PAN No. ATUPB 1684 N (APPELLANT) (RESPONDENT) Assessee by Shri Rahul Khare, Adv. Revenue by Shri Rajesh Dhingra, Sr. D.R. Date of hearing: 13.07.2026 Date of Pronouncement: 13.07.2026

ORDER PER NAVEEN CHANDRA, ACCOUNTANT MEMBER :

This above captioned appeal has been filed by the Revenue against the order of the Learned Commissioner of Income Tax (Appeals)-Delhi-42 dated 07.01.2026 arises from the penalty order dated 22.03.2024 passed by the ACIT, Circle, International Taxation- 1(1)(2) under section 271(1)(c) of the Income Tax Act, 1961, (hereinafter referred to as “the Act”) for the Assessment Year 2014-15.

IT(IT)A No. 144/DEL/2026 [A.Ys 2014-15] ACIT vs. Anita Bentson 2. Revenue has raised following grounds of appeal : 1. “whether the Ld' CIT(A) was justified the in law in deleting penalty u/s 271(1)(c) solely on applicability basis of deletion of quantum Addition, without independent examination of facts and of the said provision? 2. whether penalty proceedings u/s 271(1)(c) can be treated as purely consequential quantum to proceedings, particularly NSEL in cases involving additions u/s 68, 69 and 69C relating to transactions? 3. whether deletion of penalty is sustainable order in law when the corresponding quantum is under challenge before the Hon’ble ITAT? 4. whether deletion of penalty prior to final adjudication of quantum issues is premature and prejudicial to the interests of the Revenue? The appellant craves leave to add, modify, amend or alter any grounds of appeal at the of or before, the hearing of appeal.” 3. Brief facts of the case are that the assessee is an individual and Non-Resident in India (NRI) as per record the assessee has filed ITR for the AY 2014-15 at income of Rs.31,53,370/- on 28.05.2014. The assessee has declared income of Rs.26,43,375/- as income from House Property and Rs.5,09,994/- as income from other sources for the AY 2014-15. The case was reopened under section 147 of the Act and addition of Rs.4,88,62,389 was made u/s 144C r.w.147. 4. The AO thereafter, levied a penalty of Rs. 1,37,12,706/- u/s 271(1)(c) of the Act. Aggrieved with the penalty order u/s 271(1)(c) of the Act dated 22.03.2024, the assessee has filed appeal before Ld. CIT(A). The Ld. CIT(A) vide its order dated 07.01.2026 has disposed off the appeal of the assessee, the relevant part of the order is as under: “4. It is seen from the records available with this office that quantum appeal no. CIT (A). Delhi-42/10245/2013-14 filed by the appellant against the underlying assessment order dated

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IT(IT)A No. 144/DEL/2026 [A.Ys 2014-15] ACIT vs. Anita Bentson 25.07.2023 for the concerned AY 2014-15 has already been decided by this office vide Appeal Order passed u/s 250 vide DIN & Order No: ITBA/APL/S/250/2025-26/1084465638(1) dated 06.01.2026, whereby the entire disputed addition of Rs. 4.57,09,020/- made on account of on account on account of unexplained expenditure of Rs.1,57,49.020/-, on account of cash credit Rs. 2,10,60,000/-unexplained investment of Rs. 89,00,000/-, on the basis of which impugned penalty of Rs 1,37,12,706/- has been levied upon the appellant and is the subject matter of instant appeal, has been deleted. As the entire addition of Rs. 4,57,09,020/- made by the AO already stands deleted. the genesis of penalty u/s 271(1)(c) no more survives and there is no basis for sustaining the penalty imposed in connection with those additions having become infructuous. The penalty is, thus, liable to be cancelled in accordance with provisions of section 275(14) of the Act giving effect to the quantum appeal order dated 06.01.2026. Accordingly, the impugned penalty of Rs. 1,37,12,706/-is hereby directed to be deleted. 5. In the result, the appeal is treated as allowed for statistical purposes.”

5.

Aggrieved with the learned CIT(A)’s order dated 06.01.2026, the Revenue is now in appeal before us. 6. The ld DR relied on the orders of the AO whereas the ld AR relied on the order of the CIT(A). 7. We have heard the learned DR and perused the materials available on record. We find that the CIT(A) has deleted the penalty on account of the fact that the quantum addition had been deleted by him. We have already in ITAT order in ITA No.143/Del/2026 deleted the quantum additions made in the case of the assessee. In such a

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IT(IT)A No. 144/DEL/2026 [A.Ys 2014-15] ACIT vs. Anita Bentson situation the latin maxim comes alive that says sublato fundamento cadit opus, which translates to "the foundation being removed, the structure falls". Once the foundation for levying penalty is erased, the penalty has no legs to stand. We, therefore, find no reason to sustain the penalty levied on the assessee for this year. Appeal of the Revenue is dismissed. 8. In the result, Revenue’s appeal is dismissed. Order pronounced in the open court on 13.07.2026

Sd/- Sd/- (VIKAS AWASTHY) (NAVEEN CHANDRA) JUDICIAL MEMBER ACCOUNTANT MEMBER Date:- 13.07.2026 Priti Yadav, Sr. Ps* Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI

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