AMARJIT KAUR, MOHALI,MOHALI vs. JAO INCOME TAX OFFICER WARD-6(1), CHANDIGARH, CHANDIGARH

ITA 790/CHANDI/2026Status: DisposedITAT Chandigarh05 October 2026AY 2013-20143 pages
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What did the Tribunal hold?

The Tribunal held that since the very foundation of the impugned penalty, which is the quantum addition, no longer survives in its confirmed form and has been restored back to the Assessing Officer for reconsideration, the penalty order also requires re-examination. The Tribunal found it fit to set aside the impugned order of the CIT(A) and restore the penalty back to the Assessing Officer. The AO is directed to re-consider the penalty in light of the outcome of the quantum assessment. The assessee is directed to plead and prove its case forthwith before the AO. The appeal was allowed for statistical purposes.

What were the facts?

The assessee, Amarjit Kaur, filed an appeal before the Income Tax Appellate Tribunal (ITAT) challenging an order dated 23-01-2026 passed by the Commissioner of Income Tax (Appeals), NFAC. This order confirmed a penalty of Rs. 132.02 Lacs levied by the Assessing Officer (AO) under Section 271(1)(c) of the Income Tax Act, 1961, via an order dated 29.09.2022. The CIT(A) had dismissed the assessee's appeal in limine due to a delay of 579 days in filing. The assessee's authorized representative (AR) submitted that the quantum addition, which formed the basis for the penalty, had been restored to the AO by the Tribunal in a separate appeal (ITA No.475/Chandi/2026) dated 02.09.2026. The AR argued that the delay was due to bona fide reasons beyond the assessee's control and requested the penalty be restored to the AO for adjudication in light of the quantum assessment outcome.

What were the issues?

1. Whether the penalty levied under Section 271(1)(c) of the Income Tax Act, 1961, is sustainable when the underlying quantum addition has been restored to the Assessing Officer by the Tribunal for reconsideration. The assessee's contention, as presented by the Ld. AR, is that since the quantum addition from which the penalty originated has been restored to the AO by the Tribunal, the penalty itself should also be reconsidered. The Ld. AR argued that the delay in filing the appeal before the Ld. CIT(A) was not intentional or deliberate but due to bona fide reasons and circumstances beyond the assessee's control. Therefore, the penalty should be restored to the AO for adjudication in light of the outcome of the quantum assessment. The revenue's contention, as presented by the Ld. CIT-DR, was an opposition to the assessee's plea for restoration, implying that the penalty should stand or that the assessee's arguments for condonation of delay were not sufficient.

Which sections of the Income-tax Act were involved?

Section 271(1)(c)

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Income Tax Appellate Tribunal, “A” BENCH, CHANDIGARH

Before: HON’BLE SHRI MANOJ KUMAR AGGARWAL, AM & HON’BLE SHRI RAJESH DAMODARLAL SHARMA, JM

RAJESH DAMODARLAL SHARMA (Judicial Member)

1.

Aforesaid appeal by assessee for Assessment Year (AY) 2013-14 arises out of an order of learned Commissioner of Income Tax (Appeals), NFAC [CIT(A)] dated 23-01-2026 confirming penalty of Rs.132.02 Lacs as levied by Ld. AO u/s 271(1)(c) vide order dated 29.09.2022. Upon perusal of impugned order, it could be seen that Ld. CIT(A) has dismissed the appeal of the assessee in limine for want of condonation of delay of 5

The order continues below.

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