SUNDARAM HOME FINANCE LIMITED,CHENNAI vs. CIT, CHENNAI

ITA 1777/CHNY/2026Status: DisposedITAT Chennai23 September 2026AY 2015-1614 pages
AI SummaryDismissed

What were the facts?

The assessee, Sundaram Home Finance Ltd., filed appeals against orders of the CIT(A) for Assessment Years 2015-16 and 2016-17. These orders were passed under Section 250 of the Income Tax Act, 1961. The appeals stem from penalty proceedings initiated under Section 271(1)(c) of the Act. The original assessment for AY 2015-16 resulted in additions of Rs. 3,44,24,540/- under Section 14A and Rs. 17,35,94,400/- for excess deduction under Section 36(1)(viii). Penalty proceedings were initiated. The CIT(A) granted partial relief, and the Assessing Officer levied a penalty of Rs. 1,15,28,682/-. The assessee appealed to the CIT(A) again, who then set aside the penalty order to the Assessing Officer for re-computation under Section 275(1A) in light of the ITAT's order in quantum proceedings.

What did the Tribunal hold?

The Tribunal held that the order of the Learned CIT(A) was in consonance with the plain provisions of Section 275(1A) of the Act. The CIT(A) had rightly set aside the matter to the file of the Assessing Officer for re-computation of penalty as mandated by Section 275(1A), especially since the original assessment order was set aside in appeal, meaning there was no subsisting assessment order until a fresh assessment was completed. The Tribunal found no illegality or perversity in the CIT(A)'s order. However, the Tribunal clarified that all contentions raised by the appellant challenging the levy of penalty under Section 271(1)(c) were kept open before the Assessing Officer for consideration during the re-computation. The appeals were dismissed as the CIT(A)'s order was upheld.

What were the issues?

1. Whether the Learned CIT(A) erred in directing the Assessing Officer to re-compute the penalty with reference to the income finally assessed pursuant to the Hon'ble ITAT order, in accordance with Section 275(1A) of the Act, despite the appellant not having concealed income or furnished inaccurate particulars. - Assessee's contention: The claim was bonafide and based on reasonable interpretation of law and judicial precedents. The addition was reduced to NIL by the ITAT, and the Assessing Officer accepted the returned income in the order giving effect to the ITAT's order. The issue under Section 36(1)(viii) was debatable, and the manner of allocation was disputed until the ITAT's order. - Revenue's contention: Not recorded. 2. Whether the Learned CIT(A) erred in holding that the appeal is partly allowed for statistical purposes. - Assessee's contention: The CIT(A) should have deleted the penalty as the additions made by the Assessing Officer were reduced to NIL and the quantum of penalty cannot survive. The order giving effect to the ITAT order accepted the returned income. - Revenue's contention: Not recorded.

Which sections of the Income-tax Act were involved?

Section 271(1)(c),Section 275(1A),Section 143(3),Section 14A,Section 36(1)(viii),Section 274,Section 250

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, CHENNAI BENCHES,

Before: SHRI GEORGE GEORGE K, VICE- & SHRI INTURI RAMA RAO

Pronounced: 23.09.2026

PER INTURI RAMA RAO, ACCOUNTANT MEMBER :

These two appeals filed by the Assessee-company are directed against the separate orders passed by learned Commissioner of Income Tax(Appeal)[NFAC], both dated 03.02.2026 passed u/s.250 of the Income Tax Act, 1961 for the Assessment Year 2015-16 and 2016-17 respectively. SUNDARAM HOME FINANCE LIMITED [A]

2.

Since identical facts and issues are involved in both thes

The order continues below.

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