Loading judgment…
Facts
The Assessee preferred an appeal against a penalty order under Section 270A. The penalty was imposed based on a difference between purchase value and stamp value, treated as deemed income. The Assessee had also appealed the quantum addition related to this difference.
Held
The Tribunal held that the decision on the quantum appeal, which was pending, would have a bearing on the penalty appeal. Therefore, the penalty order was set aside.
Key Issues
Whether the penalty under Section 270A can be sustained when the appeal against the underlying quantum addition is still pending adjudication, and whether the penalty order should be set aside in such circumstances.
Sections Cited
270A, 143(3), 143(3A), 143(3B), 56(2)(x)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “C” BENCH, MUMBAI
(Assessment Year: 2018-2019) Imtiyaz Ahmad Khan 212, New Bharat Compound, Near Kalpana Talkies, Near Baxi Singh Petrol Pump, L.B.S. Marg, Kurla (West), Mumbai : 400 070 [PAN:BKZPK0333E] …………. Appellant Vs Income Tax Officer Ward 41(1)(2), Mumbai Kautilya Bhavan, Bandra Kurla Complex, …………. Respondent Mumbai – 400051. Appearance For the Appellant/Department : Shri Mohammed Shahab Akram Khan For the Respondent/Assessee : Shri Virabhadra Mahajan Date Conclusion of hearing : 02.09.2025 Pronouncement of order : 10.09.2025
O R D E R [ Per Rahul Chaudhary, Judicial Member: 1. The present appeal preferred by the Assessee is directed against the Order, dated 05/02/2025, passed by the National Faceless Appeal Centre (NFAC), Delhi [hereinafter referred to as ‘CIT(A)’] whereby the Ld. CIT(A) had dismissed the appeal against the Penalty Order, dated 04/03/2022, passed under Section 270A of the Income Tax Act, 1961 [hereinafter referred to as ‘the Act’] for the Assessment Year 2018-2019.
The Assessee has raised following grounds of appeal :
1. On the facts and in the circumstances of the case and in law, that the Ld. CIT(A) has erred in sustaining the penalty of Rs. Assessment Year 2018-2019 19,00,040/- imposed by the Id. AO u/s 270A vide Penalty Order U/s. 270A of the Income Tax Act, 1961 under DIN: ITBA/PNL/F/270A/2021-22/1040339570(1), Imposing Alleged Penalty U/s 270A of Rs. 19,00,040/-, @ 200% on Rs. 30,74,495/- being the difference between the Registered Value (Purchase Value) of Rs. 76,15,880/- and the Stamp Value of Rs. 1,06,90,376/- treated as deemed income from other sources. The said Penalty being imposed for Misreporting of income. The said Alleged difference being fully explainable thereby the said Penalty imposed U/s 270A may be DELETED, ON MERITS.”
We heard both the sides and perused the material on record.
By way of present appeal the Assessee has challenged the Order, dated 05/02/2025, passed by CIT(A) whereby the levy of penalty INR 19,00,040/- under Section 270A of the Act was confirmed.
Ld. Authorized Representative appearing on behalf of the Assessee submitted that the appeal preferred by the Assessee against the quantum additions made by vide Assessment Order, dated 23/02/2021, passed under Section 143(3) read with Section 143(3A)/(3B) of the Act for the Assessment Year 2018-2019 was still pending for adjudication before the CIT(A). The Ld. Authorized Representative submitted that without awaiting for adjudication of the said appeal, the CIT(A) had passed the impugned order confirming the levy of penalty. It was submitted that the CIT(A) should have adjudicated the appeal challenging the levy of penalty only after taking into consideration the result of the quantum appeal. It was submitted by the Ld. Authorized Representative for the Assessee that in view of the aforesaid facts, impugned order be set aside.
The Ld. Departmental Representative did not controvert the submission made on behalf of the Assessee that the appeal preferred against the quantum addition was still pending adjudication before the CIT(A).
On perusal of the Assessment Order, dated 23/02/2021, we find that Assessment Year 2018-2019 the addition was made in the hands of the Assessee in respect of differences of INR.30,74,495/- between the purchase value and stamp value by treating the same as deemed income of the Assessee under Section 56(2)(x) of the Act. It is admitted position that the aforesaid addition was challenged in appeal by the Assessee and the said appeal preferred was pending adjudication before the NFAC. Given the facts and circumstances of the present case, the decision of the aforesaid appeal in quantum proceedings would have a bearing on the challenge to levy of penalty under Section 270A of the Act. Given the aforesaid facts, we deem it appropriate to set aside the impugned Order, dated 05/02/2025, passed by the CIT(A) confirming levy of penalty under Section 270A of the Act with the direction to CIT(A) to adjudication the appeal afresh after taking into consideration the order passed by NFAC in the quantum appeal preferred by the Assessee. The Assessee is directed to take necessary step to expedite disposal of the quantum appeal. The Learned Departmental Representative is also directed to place a copy of the present order before the NFAC for expeditious disposal of the quantum appeal. In terms of aforesaid, Ground No.1 raised by the Assessee is treated as allowed for statistical purposes.
In result, in terms of paragraph 7 above, the present appeal is treated as allowed for statistical purposes.
Order pronounced on 10.09.2025.