KANTILAL MOHANLAL PAREKH,MUMBAI vs. WARD 22(2)(1), MUMBAI, MUMBAI

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ITA 3037/MUM/2025Status: DisposedITAT Mumbai10 July 2025AY 2012-13Bench: the Ld.CIT(A). The Ld.CIT(A) by executing his powers under section 250 of the Act, set aside the alleged assessment order to the file of the Ld.AO for adjudication de novo. After completion of assessment proceeding, the Ld.AO imposed penalty under section 271(1)(c) of the Act at 100% of tax sought to be evaded amount to Rs.94,41,594/-. The aggrieved assesse filed an appeal before the Ld.CIT(A) by challenging the impugned penalty order.1 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal held that the quantum addition was set aside by the Ld.CIT(A) for fresh assessment, rendering the penalty grounds infructuous. The appellate order confirming the penalty was set aside, and the penalty order was restored to the AO for re-examination.

What were the facts?

The assessee filed an appeal against an order that confirmed a penalty levied under Section 271(1)(c) of the Income-tax Act, 1961. The original assessment had added Rs. 3.05 crores, but the Ld.CIT(A) set aside this order for de novo adjudication. Subsequently, a penalty was imposed, which was challenged.

What were the issues?

Whether penalty under Section 271(1)(c) is sustainable when the underlying quantum addition has been set aside for fresh assessment?

Which sections of the Income-tax Act were involved?

Section 250,Section 144,Section 147,Section 271(1)(c)

AI-generated summary — verify with the full judgment below

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

For Appellant: Shri Kiran Mehta a/w Shri Ravi, Shri Hemanshu Joshi, SR DR
Hearing: 07/07/2025

The instant appeal of the assessee was filed against the order of the National Faceless Appeal Centre, Delhi [for brevity, ‘Ld. CIT(A)’] passed under section 250 of the Income-tax Act, 1961 (in short, ‘the Act’), for Assessment Year 2012-13, date of order 17.03.2025. The impugned order was emanated from the order of the

2.

We heard the rival submissions and considered the documents available on the record. The Ld.AR stated that the original assessment was completed under section 144/147 of the Act by making total addition of Rs.3.05 crores. The assesse challenged the assessment order passed under section 144 / 147 of the Act dated 10/12/2019 before the Ld.CIT(A). The Ld.CIT(A) by executing his powers under section 250 of the Act, set aside the alleged assessment order to the file of the Ld.AO for adjudication de novo. After completion of assessment proceeding, the Ld.AO imposed penalty under section 271(1)(c) of the Act at 100% of tax sought to be evaded amount to Rs.94,41,594/-. The aggrieved assesse filed an appeal before the Ld.CIT(A) by challenging the impugned penalty order.

3. The Ld.AR took a plea that the quantum addition has been duly set aside by the Ld.CIT(A) for adjudication a fresh; but for penalty order under section 271(1)(c) of the Act was duly confirmed by the Ld.CIT(A). The relevant observations of the Ld.CIT(A) is reproduced below: - “Analysis and decision:

3.

I have considered the grounds of appeal and seen the submission/statement made by the appellant and perused the penalty order passed u/s 271(1)(c) of IT Act, 1961. The Appellant has taken grounds which are all related to levying the penalty u/s 271(1)(c) of the IT Act. In this case, the quantum addition has been set aside vide appellate order dated 17.02.2025. Therefore, the grounds of appeal have become infructuous. As such it has become Infructuous, accordingly, this appeal is dismissed. Hence, the grounds of appeal of the appellant are dismissed as infructuous.

4. In the result, the appeal of the appellant is dismissed.”

5. In our considered view, the quantum appeal was duly remanded by the Ld. CIT(A) to the file of the Ld. Assessing Officer for a fresh assessment. Consequently, the present penalty lacks merit insofar as it pertains to the impugned additions. Accordingly, the appellate order under challenge is set aside. The penalty order is also restored to the file of the Ld. AO, who shall re-examine the issue of penalty, if warranted, upon completion of the reassessment proceedings.

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