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Facts
The assessee failed to file a return of income for AY 2018-19. Information regarding cash deposits, sale of property, fixed deposits, and interest on securities was available with the department. The Assessing Officer reopened the assessment, and upon non-explanation from the assessee, determined total income and levied a penalty under Section 270A.
Held
The Tribunal noted that the quantum appeal was still pending before the CIT(A)/NFAC and that the penalty appeal was dismissed due to non-compliance. The Tribunal held that the penalty appeal should have been decided only after the quantum appeal was decided and restored the penalty issue to the file of CIT(A)/NFAC for adjudication after the quantum appeal is decided.
Key Issues
Whether the penalty appeal can be decided before the quantum appeal is decided, and if the CIT(A)/NFAC rightly dismissed the appeal for non-prosecution.
Sections Cited
270A, 148, 143(3), 144B, 69, 147
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, PUNE BENCH “B”, PUNE
Before: SHRI R. K. PANDA & SHRI VINAY BHAMORE
This appeal filed by the assessee is directed against the ex-parte order dated 18.08.2025 of the Ld. CIT(A) / NFAC, Delhi relating to assessment year 2018-19 confirming the penalty of Rs.35,39,370/- levied by the Assessing Officer u/s 270A of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’).
Facts of the case, in brief, are that the assessee is an individual and has not filed her return of income for the impugned assessment year. Information was available with the department that the assessee during the year had made cash deposit of Rs.23 lakhs, sold immovable property of Rs.53,60,000/-, made fixed deposit of Rs.33 lakhs and earned interest on securities of Rs.96,483/-, therefore, the Assessing Officer, after recording reasons reopened the assessment and issued notice u/s 148 of the Act. The assessee in response to the notice u/s 148 of the Act filed her return of income declaring total income of Rs.96,480/-.
During the course of assessment proceedings the Assessing Officer asked the assessee to explain the source of cash deposit and investment in FD and asked the assessee to explain as to why short term capital gain should not be brought to tax. In absence of any proper explanation from the side of the assessee, the Assessing Officer completed the assessment u/s 147 r.w.s. 143(3) r.w.s. 144B of the Act determining the total income of the assessee at Rs.87,56,480/- by treating Rs.53,60,000/- as short term capital gain and treating the time deposits of Rs.33 lakhs as unexplained investment u/s 69 of the Act. The Assessing Officer thereafter initiated penalty proceedings u/s 270A of the Act for under-reporting the income in consequence of mis-reporting under the Act. During the penalty proceedings the Assessing Officer gave opportunity to the assessee. However, in absence of any submission made by the assessee, the Assessing Officer levied penalty of Rs.35,39,370/- u/s 270A of the Act being the penalty @ 200% of the tax sought to be evaded.
Since despite number of opportunities granted by the Ld. CIT(A) / NFAC there was non-compliance from the side of the assessee, the Ld. CIT(A) / NFAC sustained the penalty levied by the Assessing Officer u/s 270A of the Act.
Aggrieved with such order of the Ld. CIT(A) / NFAC, the assessee is in appeal before the Tribunal.
The Ld. Counsel for the assessee at the outset submitted that the quantum appeal of the assessee was pending before the Ld. CIT(A) / NFAC and the assessee was under the impression that once the quantum is deleted, the penalty does not survive, therefore, there was no compliance from the side of the assessee. He submitted that in the interest of justice the penalty issue be restored to the file of the Ld. CIT(A) / NFAC with a direction to decide the penalty appeal after completion of the quantum appeal proceedings.
The Ld. DR on the other hand heavily relied on the order of the Ld. CIT(A) / NFAC.
We have heard the rival arguments made by both the sides, perused the orders of the Assessing Officer and the Ld. CIT(A) / NFAC and the paper book filed on behalf of the assessee. It is an admitted fact that due to non-compliance to the statutory notices issued by the office of the Ld. CIT(A) / NFAC, he dismissed the appeal filed by the assessee for want of prosecution and thereby sustained the penalty levied by the Assessing Officer u/s 270A of the Act. It is also an admitted fact that the quantum appeal of the assessee is still pending before the Ld. CIT(A) / NFAC. In our opinion, the penalty appeal should have been decided only after the quantum appeal is decided. Under these circumstances and considering the totality of the facts of the case and in the interest of justice, we deem it proper to restore the issue to the file of the Ld. CIT(A) / NFAC with a direction to adjudicate the appeal on the issue of levy of penalty after the quantum appeal is decided. Needless to say the Ld. CIT(A) / NFAC shall decide the issue as per fact and law and after providing due opportunity of being heard to the assessee. We hold and direct accordingly. The grounds raised by the assessee are accordingly allowed for statistical purposes.
In the result, the appeal filed by the assessee is allowed for statistical purposes.
Order pronounced in the open Court on 12th March, 2026.
Sd/- Sd/- (VINAY BHAMORE) (R. K. PANDA) JUDICIAL MEMBER VICE PRESIDENT पुणे Pune; दिन ांक Dated : 12th March, 2026 GCVSR आदेश की प्रतितिति अग्रेतिि/Copy of the Order is forwarded to: अपील र्थी / The Appellant; 1. 2. प्रत्यर्थी / The Respondent 3. The concerned Pr.CIT, Pune 4. DR, ITAT, ‘B’ Bench, Pune 5. ग र्ड फ ईल / Guard file. आदेशानुसार/ BY ORDER, // True Copy // Assistant Registrar आयकर अपीलीय अदिकरण ,पुणे / ITAT, Pune
S.No. Details Date Initials Designation 1 Draft dictated on 11.03.2026 Sr. PS/PS 2 Draft placed before author 11.03.2026 Sr. PS/PS Draft proposed & placed before the 3 JM/AM Second Member Draft discussed/approved by Second 4 AM/AM Member 5 Approved Draft comes to the Sr. PS/PS Sr. PS/PS 6 Kept for pronouncement on Sr. PS/PS 7 Date of uploading of Order Sr. PS/PS 8 File sent to Bench Clerk Sr. PS/PS Date on which the file goes to the Office 9 Superintendent 10 Date on which file goes to the A.R. 11 Date of Dispatch of order