MUNISWAMY SHARADA,BENGALURU vs. ITO, WARD 2(1)(3), BENGALURU, BENGALURU

ITA 868/BANG/2026Status: DisposedITAT Bangalore08 October 2026AY 2016-174 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the delay in filing the appeal against the penalty order should be condoned. The reasoning was based on the fact that the Tribunal, in its earlier order in ITA No. 869/Bang/2026 dated 30/07/2026, had condoned the delay in filing the appeal against the quantum assessment order and remitted the said issue to the AO for fresh consideration. Consequently, as on the date of the present hearing, the quantum demand was not in existence. Considering this fact and that the present appeal pertains to penalty proceedings, the Tribunal was inclined to condone the delay in filing the appeal before the NFAC and remit this issue also to the AO for consideration along with the quantum issue. The Tribunal stated that other directions given in the quantum appeal would equally apply to the present case. The appeal was allowed for statistical purposes.

What were the facts?

The assessee, Ms. Muniswamy Sharada, an individual, did not file her return of income for Assessment Year 2016-17. The Assessing Officer (AO) reopened the case to examine cash deposits and interest income. Despite several notices, the assessee did not respond, leading to an ex-parte order under Section 147 read with Section 144, treating bank credits and cash deposits as unexplained. The AO also levied penalty under Section 271(1)(c) for alleged concealment of income. The assessee's initial appeal before the NFAC, Delhi against the quantum assessment order was dismissed due to a delay of 438 days. A subsequent appeal against the penalty order was also dismissed by the NFAC due to a delay of 264 days. However, the assessee had challenged the quantum appeal order dismissal before the ITAT, Bangalore, which, in its order dated 30/07/2026, condoned the delay and remitted the issue to the AO for fresh consideration.

What were the issues?

1. Whether the Tribunal should condone the delay in filing the appeal against the penalty order passed under Section 271(1)(c) for AY 2016-17, given that the quantum assessment order has been remitted for fresh consideration by the AO? Assessee's contention: The assessee argued that since the Tribunal had already set aside the quantum order and remitted it to the AO for fresh consideration, the present penalty appeal should also be remitted to the AO for considering the penalty along with the quantum issue. Revenue's contention: The Revenue argued that the assessee was not vigilant, and therefore, the appeal should be dismissed.

Which sections of the Income-tax Act were involved?

Section 271(1)(c),Section 147,Section 144

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, BANGALORE BENCHES, BANGALORE

Before: SHRI BALAKRISHNAN S. & SHRI SOUNDARARAJAN K.

PER SHRI SOUNDARARAJAN K., JUDICIAL MEMBER:

This is an appeal filed by the assessee challenging the order of the NFAC, Delhi dated 26/12/2025 in respect of the penalty levied u/s. 271(1)(c) of the Act for the A.Y. 2016-17. 1 Ms. Muniswamy Sharada

2.

The brief facts of the case are that the assessee is an individual and not filed her return of income. The case of the assessee was reopened to exam

The order continues below.

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