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Facts
The assessee filed a penalty appeal against an order levying penalty for the assessment year 2014-15. The original assessment order was passed by the NFAC, Delhi. The appellant contended that the penalty proceedings were consequential to the assessment order which has been remanded for denovo consideration.
Held
The Tribunal held that the present penalty appeal is premature because the quantum appeal for the relevant assessment year has been remanded back to the AO for de novo consideration. Consequently, the penalty appeal does not survive at this stage.
Key Issues
Whether a penalty appeal is maintainable when the underlying assessment order has been remanded for de novo consideration.
Sections Cited
147, 144, 144B, 271(1)(c), 274
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “F” BENCH, MUMBAI
Before: SMT. BEENA PILLAI & SMT. RENU JAUHRI
Per: Smt. Beena Pillai, J.M.: The present penalty appeal has been filed by the assessee against order dated 03/03/2025 passed by NFAC, Delhi for assessment year 2014-15 on following grounds of appeal : “ The National Faceless Assessment Centre, Delhi (hereinafter referred to as the AO) bearing DIN number ITBA/AST/S/147/2021-22/1041348792(1) erred in passing an order u/s 147 r.w.s 144 read with section 144B of the Income-tax
2. ITANo.2177/Mum/2025; A.Y. 2014-15 Usha Marazban Pithawalla Act for A.Y. 2014-15 treating the Appellant as asssessee in default against which Appellant have filed an appeal with the National faceless Appeal Centre (NFAC)-Delhi but appeal was not accepted by CIT Appeals and rejection order passed (DIN ITBA/NFAC/S/250/2024-25/1073925735(1)) for appeal was not file in time after rejection of our condonation of delay.
2. The AO erred in raising a tax demand of Rs. 2,36,12,001/- (including interest of Rs. 1,54,13,368/-) u/s 147 read with sec. 144 of the I.T. Act by stating purchase of Flat made by the assessee is unexplained not genuine. The appeal for the same is already filed before your honour.
3. The National Faceless Assessment Centre, Delhi (hereinafter referred to as the AO) bearing DIN number ITBA/PNL/F/271(1)(c)/2022-23/1045845744(1) erred in passing an order u/s 271 (1) (c) of the Income-tax Act for A.Y. 2014-15 treating the Appellant as assessee in default.
4. The AO erred in raising a tax demand of Rs. 81,98,633/- u/s 147 read with sec. 144 of the I.T. Act by stating "Penalty proceedings for concealment of income has been initiated separately by issue of notice u/s.274 r.w.s. 271(1)(c) of Income Tax Act, 1961. A show cause notice dated 23.03.2022 was issued and served to the assessee asking the assessee as to show cause as to why penalty should not be levied in his case. The assessee has not filed any reply"
5. If your honor peruses the said Flat Purchase Agreement, the said flat is purchased by your appellants is in joint name with her husband Mr. Marzban Pithawala who is the first owner and NRI. Even the agreement has mentioned his passport number as he did not have PAN in India at the time of purchase. Appellant's name was second name and kept for security purpose as any Husband will like to do for his wife. All the major payment was done from Husband's account only some money was paid by your appellant by breaking the fixed deposits to the tune of Rs. 50,34,000/- (Rs. Fifty Lakhs Thirty-Four Thousand only). These Fixed deposits were made from the savings which she did from some interest she earned and from the money which she received as gift from her husband.
6. Furthermore, we are also submitting the balance payment of the flat from your appellant's Husband's account to prove the genuinity of our case.
3 ITANo.2177/Mum/2025; A.Y. 2014-15 Usha Marazban Pithawalla 7. The AO erred in treating the Appellant as 'asssessee in default for the purchase of the Flat so made.
Furthermore, as your appellant is a simple housewife and her Husband is also working abroad on an Oil Rig with limited internet access, they did not realize that there was a notice from the Income tax Department which they need to reply to or take some professional guidance on the same they did not reply or attend to any of the proceedings. As a result, the orders were passed which they were not aware till they received an "SMS" on their phone only on 7th September, 2023. Due to this ignorance, they could not file any response at the time of the Order nor could they file an appeal in time and stop the Penalty order u/s 271(1) (c).”
At the outset the Ld.AR submitted that, the quantum appeal for the year under consideration has been remanded by this Tribunal back to the Ld.AO for devono consideration has vide order dated 20/05/25 in ITA no. 2095/Mum/2025. He submitted that, as the present appeal is against levy of penalty u/s.271(1)(c) which is consequential in nature the said appeal does not survive at this stage.
We have considered the submissions of the Ld.AR and hold that the present penalty appeal is premature at this stage as the quantum appeal has been remanded by this Tribunal for denovo verification vide order dated 21/05/25 in ITA no. 2095/Mum/2025.
Accordingly the present penalty appeal becomes infructuous. In the result the appeal filed by the assessee stands dismissed as infructuous. Order pronounced in the open court on 21/05/2025