ITO-42(1)(2),MUMBAI, MUMBAI vs. EAGER CORPORATION, BORIVALI WEST

PDF · subscribers
ITA 5613/MUM/2026Status: DisposedITAT Mumbai21 September 2026AY 2010-114 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 held that the Ld. Commissioner did not err in deleting the penalty under Section 271(1)(c) of the Act. The reasoning was that it is undisputed that the quantum additions, which formed the very foundation of the impugned penalty, had already been deleted by the Tribunal in its detailed order dated 12.02.2026. The Tribunal's ratio decidendi is that since the foundation of the penalty has ceased to exist, the consequential penalty cannot independently survive. Therefore, there was no infirmity in the Ld. Commissioner's order. The Tribunal dismissed the lead appeal and, by extension, the remaining three appeals filed by the Revenue, as the facts, issues, and grounds were identical. No issue was expressly left undecided.

What were the facts?

The Revenue is in appeal against the orders of the Commissioner of Income Tax (Appeals)-50, Mumbai, dated 20.02.2026, for Assessment Years (AYs) 2010-11 to 2013-14. The appeals concern the deletion of penalties levied under Section 271(1)(c) of the Income Tax Act, 1961. In the lead case for AY 2010-11, the Assessing Officer had levied a penalty of Rs. 18,66,641/- based on additions made in the quantum assessment. The Commissioner deleted this penalty, noting that the quantum additions had already been deleted by the Income Tax Appellate Tribunal (ITAT). The Revenue's appeals arise from this deletion. The assessee remained unrepresented before the ITAT.

What were the issues?

1. Whether the Tribunal erred in deleting the penalty levied under Section 271(1)(c) of the Act, by relying on the deletion of quantum additions by the Tribunal, without appreciating that the additions were based on search and post-search investigations establishing accommodation entries? (Question of law and fact, turning on Section 271(1)(c) and the principle of consequential relief). Assessee's contentions: Not recorded as none appeared. Revenue's contentions: The Ld. DR contended that the Ld. Commissioner erred in deleting the penalty by relying on the Tribunal’s decision in the quantum proceedings. The Ld. DR argued that the additions were based on search and post-search investigations that established the alleged transactions as merely accommodation entries, implying the penalty should stand independently of the quantum additions' deletion.

Which sections of the Income-tax Act were involved?

Section 271(1)(c),Section 250

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, MUMBAI BENCH “E”, MUMBAI

Before: SHRI NARENDER KUMAR CHOUDHRY & SHRI BIJAYANANDA PRUSETH

For Appellant: Smt. Sujatha Iyangar
Pronounced: 21.09.2026

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH “E”, MUMBAI BEFORE SHRI NARENDER KUMAR CHOUDHRY, JUDICIAL MEMBER And SHRI BIJAYANANDA PRUSETH, ACCOUNTANT MEMBER 1. ITA No. 5613/M/2026 Assessment Year: 2010-11 2. ITA No. 5615/M/2026 Assessment Year: 2011-12 3. ITA No. 5616/M/2026 Assessment Year: 2012-13 4. ITA No. 5626/M/2026 Assessment Year: 2013-14

ITO 42(1)(2), Eager Corporation, 734, Kautilya Bhavan, 301/2, Gaj Laxmi Apts Bhabhi BKC, Bandra East, Naka Vasant Rao Road, Vs. Mumbai, Borivali West, Maharashtra - 400051 Mumbai, Maharashtra - 400092 PAN – AAAFE7328R (अपीलार्थी/ Appellant) (प्रत्यर्थी /Respondent)

Assessee represented by: None Smt. Sujatha Iyangar, Revenue represented by: Ld. Sr. AR

Date of conclusion of hearing: 15.09.2026 Date of pronouncement: 21.09.2026 O R D E R

Per : Bench

2 ITA No. 5613, 5626, 5616 & 5615/M/2026 Eager Corporation These four appeals have been preferred by the Revenue against even orders, all dated 20.02.2026, passed by the Ld. Commissioner of Income Tax (Appeals)- 50, Mumbai [in short, “Ld. Commissioner”], under section 250 of the Income Tax Act, 1961 (in short, “the Act”), for A.Ys. 2010-11 to 2013-14, involving an identical issue relating to the deletion of penalties levied under section 271(1)(c) of the Act.

2.

Since the facts, issue involved and grounds raised by the Revenue are identical, all four appeals were heard together and are being disposed of by this consolidated order. For convenience, ITA No. 5613/Mum/2026 for A.Y. 2010-11 is taken as the lead case, and our findings therein shall apply mutatis mutandis to the remaining three appeals.

3.

In the lead case, the Assessing Officer, vide order dated 19.10.2023 passed under section 271(1)(c) of the Act, levied a penalty of Rs. 18,66,641/- based on the additions made in the quantum assessment.

4.

The Ld. Commissioner deleted the penalty after noticing that the quantum additions forming its foundation had already been deleted by the Tribunal.

5.

The Revenue, being aggrieved, preferred the present appeal. Despite service of notice for hearing on 15.09.2026, none appeared on behalf of the Assessee, nor

3 ITA No. 5613, 5626, 5616 & 5615/M/2026 Eager Corporation was any adjournment application filed. Therefore, we are constrained to adjudicate these appeals after hearing the Ld. DR and on the basis of the material available on record.

6.

Heard the Ld. DR and perused the material available on record. The Ld. DR contended that the Ld. Commissioner erred in deleting the penalty by relying upon the Tribunal’s decision in the quantum proceedings, without appreciating that the additions were based on search and post-search investigations establishing that the alleged transactions were merely accommodation entries.

6.1 However, it is undisputed that the quantum additions forming the basis of the impugned penalty have already been deleted by the Tribunal, vide its detailed order dated 12.02.2026 passed in ITA No. 5221/Mum/2024 by considering peculiar facts and the law applicable.

6.2. Since the very foundation of the penalty has ceased to exist, the consequential penalty cannot independently survive. Hence, we find no infirmity in the order of the Ld. Commissioner deleting the penalty under section 271(1)(c) of the Act. Accordingly, the lead appeal is dismissed.

7.

Since the facts, issue involved and grounds raised in the remaining three appeals are identical, our findings hereinabove shall apply mutatis mutandis thereto. Consequently, the remaining three appeals filed by the Revenue are also dismissed.

4 ITA No. 5613, 5626, 5616 & 5615/M/2026 Eager Corporation

8.

In the result, all the four appeals filed by the REVENUE are dismissed.

Order pronounced in the open court on 21.09 .2026.

Sd/- Sd/- (BIJAYANANDA PRUSETH) (NARENDER KUMAR CHOUDHRY) ACCOUNTANT MEMBER JUDICIAL MEMBER (ANKIT SWARNKAR) Private Secretary Copy to: The Appellant The Respondent The CIT, Concerned, Mumbai The DR Concerned Bench

//True Copy// By Order

Dy/Asstt. Registrar, ITAT, Mumbai.

More judgments on Section 271(1)(c)

All 25,141 judgments and leading authorities on Section 271(1)(c) →

Recent GST High Court judgments

Search GST case law →