JAYKRISHNA DEVELOPERS PVT LTD ,MUMBAI vs. ITO WARD -2(3), THANE

PDF · subscribers
ITA 8687/MUM/2025Status: HeardITAT Mumbai05 October 2026AY 2012-135 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the assessee succeeded in the quantum appeal, and the addition of ₹4,00,000/- made under Section 68 of the Act had already been deleted by the ITAT. Since this addition was the sole foundation for the levy of the impugned penalty under Section 271(1)(c), and the addition no longer survived, the penalty order could not be sustained. Consequently, the Tribunal directed the AO to delete the penalty of ₹1,23,600/-. The grounds of appeal raised by the assessee were allowed. The Tribunal did not explicitly discuss the second ground regarding the AO's notice, as the deletion of the primary addition rendered the penalty unsustainable.

What were the facts?

The assessee, Jaykrishna Developers Pvt Ltd, is in appeal against an order dated 20.11.2025 passed by the National Faceless Appeal Centre (NFAC)/CIT(Appeals). This order confirmed a penalty of ₹1,23,600/- levied under Section 271(1)(c) of the Income Tax Act, 1961, for Assessment Year 2012-13. The penalty arose from an addition of ₹4,00,000/- made by the Assessing Officer (AO) under Section 68 for unexplained cash credit in the assessee's bank account. The original assessment order was passed under Section 143(3) on 27.03.2015. The assessee's appeal was initially dismissed ex-parte but later recalled. The assessee contended that the addition was based on a mischaracterization of a sale receipt as an unsecured loan.

What were the issues?

1. Whether the learned CIT(A) erred in confirming the penalty of ₹1,23,600/- under Section 271(1)(c) on the ground that unsecured loans were not reflected in the bank statement, and in failing to consider detailed submissions. - Assessee's contention: The impugned addition of ₹4,00,000/- was deleted in a precedent ITAT order (ITA 8686/MUM/2025). The credit entry of ₹4,00,000/- in the bank account on 03/01/2012 was a receipt from the sale of immovable property to Radhey Sham Sharma, not an unsecured loan. Therefore, the basis for the penalty no longer exists. - Revenue's contention: The Ld. DR accepted that the addition of ₹4,00,000/- has been deleted by the ITAT. 2. Whether the learned CIT(A) erred in failing to consider that the AO, in his notice under Section 274 r.w. 271(1)(c), failed to specify the limb under which the penalty charge was levied (Concealment of Income OR Inaccurate particulars of Income). - Assessee's contention: The penalty notice was vague as it did not specify whether the penalty was for concealment of income or for furnishing inaccurate particulars. (This ground was not explicitly addressed by the Tribunal in its final decision, but the outcome rendered it moot). - Revenue's contention: Not recorded.

Which sections of the Income-tax Act were involved?

Section 271(1)(c),Section 250,Section 68,Section 274

AI-generated summary — verify with the full judgment below

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

Before: SHRI PAWAN SINGH & SHRI RAKESH KUMAR LODHA

For Appellant: Ms. Mrugakshi
For Respondent: Shri Vikas
Hearing: 29.09.2026Pronounced: 05.10.2026

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH “F”, MUMBAI BEFORE SHRI PAWAN SINGH, JUDICIAL MEMBER And SHRI RAKESH KUMAR LODHA, ACCOUNTANT MEMBER ITA No. 8687/M/2025 Assessment Year: 2012-13 JAYKRISHNA ITO, WARD -2 (3), DEVELOPERS PVT LTD THANE Flat No.1, Jay Apartment, Qureshi Mansion, Kashi Mira Road(E), Sai Vs. Gokhale Road, Thane Krupa Complex, Thane – (W) 400 601 401 107 Maharasthra Maharasthra PAN-AACJ2284J (Appellant) (Respondent) Present for: Assessee by : Ms. Mrugakshi Joshi, Adv Revenue by : Shri Vikas Chandra, Sr.DR

Date of Hearing : 29.09.2026 Date of Pronouncement : 05.10.2026 O R D E R

Per : Rakesh Kumar Lodha, Accountant Member: This appeal has been preferred by the Assessee against the order dated 20.11.2025, passed by the National Faceless Appeal

ITA NO8687.MUM.2025 JAYKRISHNA DEVELOPERS PVT LTD AY 2012-2013

Centre (NFAC)/Ld. Commissioner of Income Tax (Appeals) (in short, “Ld. Commissioner”) under section 250, arising out of the penalty order under Section 271(1)(c) dated 29/09/15 of the Income-tax Act, 1961 (in short, “the Act”), for A.Y. 2012-13.

2.

The Assessee has raised the following grounds of appeal:

1.

The learned CIT(A) erred in confirming the penalty of Rs. 1,23,600/- u/s. 271(1)(c) on the ground that impugned Unsecured Loans taken by the Assessee have not been reflected in bank statement submitted by Assessee Company and failed to take into consideration the detailed submissions that were filed during the appeal proceedings.

2.

The learned CIT(A) failed to take into consideration that the AO in his Notice u/s. 274 r.w. 271(1)(c) dated 27-03-2015 failed to strike off or specify the limb under which the charge of penalty u/s. 271(1)(c) has been levied i.e. Concealment of Income OR Inaccurate particulars of Income.

3.

Initially, this appeal was dismissed vide order dated 29-01-2026 in

exparte hearing. Later on, the order dated 29-01-2026 has been recalled in MA No.137/Mum/2026 vide order dated 26-05-2026. Hence this appeal was fixed for hearing afresh.

The brief relevant facts of the case are that, the Assessee company, filed its return of income on 27/09/2012, declaring total income Nil, subsequently, the assessment under Section 143(3) dated 27/03/2015 passed with an addition under Section 68 of

ITA NO8687.MUM.2025 JAYKRISHNA DEVELOPERS PVT LTD AY 2012-2013

₹ 4,00,000/- on account of unexplained cash credit received in the Assessee’s bank account. The impugned addition was confirmed by the Ld. CIT(A) vide order dated 20/11/2025, meanwhile, the assessing officer has levied the penalty under Section 271(1)(c) of the Act, as the Assessee did not respond to the penalty order, a show cause notice was issued to the Assessee under Section 274 r.w.s. 271(1)(c) of the Act. Therefore, penalty was levied to the Assessee at the rate of 100% of the tax of ₹1,23,600/-, sought to be evaded levied under Section 271(1)(c) of the Act. Subsequently, the Ld. CIT(A) also upheld the penalty levied to the Assessee vide order dated 20/11/2025.

4.

Before us, the Ld. AR of the Assessee placed reliance upon the –precedent order passed by the Hon’ble Income Tax Appellate Tribunal in ITA 8686/MUM/2025, dated 26/03/2026, and contended that impugned addition of ₹4,00,000/-, as made on account of unexplained credit on the ground that such amount is reflected in the bank statement of the Assessee has been deleted. The Assessee has demonstrated through the bank statement of amount of ₹4,00,000/- credited in the bank account of the Assessee on 03/01/2012 was receipt from sale, not an unsecured loan. The Assessee has explained the credit entry in the bank account as receipt against the sale of an immovable property unit through a registered agreement to sale with the purchaser Radhey

ITA NO8687.MUM.2025 JAYKRISHNA DEVELOPERS PVT LTD AY 2012-2013

Sham Sharma. Thus, the addition of ₹4,00,000/- had been deleted.

5.

Per contra, the Ld. DR accepted the fact that the addition of ₹4,00,000/- has been deleted by the ITAT, SMC Bench, Mumbai .

6.

We have heard both the parties and perused the material on record, and observe that the Assessee is succeeded in the quantum appeal, and the addition of ₹4,00,000/- made under section 68 of the Act has been already deleted by the ITAT. That addition was the sole foundation for levy of impugned penalty. Now, the addition did not survive, consequently the penalty order passed by the Ld. CIT(A) under Section 271(1)(c) of the Act cannot be sustained. Thus, in view of the aforesaid discussion, we find that the penalty levied u/s 271(1)(c) of ₹1,23,600/- cannot survive. Hence, we direct the assessing officer to delete the penalty. Accordingly, the grounds of appeal raised by the assessee are allowed.

7.

In the result, the appeal filed by the assessee is allowed.

Order pronounced in the open court on 05.10.2026

Sd/- Sd/- (PAWAN SINGH) (RAKESH KUMAR LODHA) JUDICIAL MEMBER ACCOUNTANT MEMBER Mumbai, Dated 05.10.2026 Sharath Kumar,PS.

ITA NO8687.MUM.2025 JAYKRISHNA DEVELOPERS PVT LTD AY 2012-2013

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 →