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Facts
The assessee's assessment for AY 2014-15 was completed under Section 143(3), making disallowances, including ₹23,44,055/- for unsubstantiated processing charges. Consequently, a penalty of ₹7,24,315/- was imposed under Section 271(1)(c) for furnishing inaccurate particulars of income. The Ld. CIT(A) upheld this penalty, leading the assessee to appeal before the Tribunal.
Held
The Tribunal noted that in a separate quantum appeal, the underlying addition for processing charges was set aside, and the matter was remanded to the Assessing Officer for fresh assessment. Since the quantum addition, which formed the basis for the penalty, no longer survived, the penalty itself did not survive. Therefore, the Tribunal quashed the penalty order.
Key Issues
Whether a penalty imposed under Section 271(1)(c) for furnishing inaccurate particulars of income can survive when the underlying quantum addition has been set aside and remanded for de novo assessment by the Coordinate Bench.
Sections Cited
250, 143(3), 271(1)(c)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, KOLKATA ‘B’ BENCH, KOLKATA
Before: SHRI GEORGE MATHAN & SHRI RAKESH MISHRA
order
: 30-December-2025 ORDER
PER RAKESH MISHRA, ACCOUNTANT MEMBER:
This appeal filed by the assessee is against the order of the Commissioner of Income Tax (Appeals)-NFAC, Delhi [hereinafter referred to as Ld. 'CIT(A)'] passed u/s 250 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) for AY 2014-15 dated 12.09.2025.
The assessee is in appeal before the Tribunal raising the following grounds of appeal:
1. For that on the facts and circumstances of the case the Order passed under section 250 of the IT Act 1961 by Ld. Commissioner of Income-tax (Appeals) (NFAC) is bad in law as well as on facts.
2. For that on the facts and circumstances of the case, the Ld. Commissioner of Income-tax (Appeals) NFAC erred in confirming the action of the Ld. DCIT imposing penalty u/s 271(1) of a sum of Rs. 7,24,315/-
3. For that the appellant craves leave to add, alter or amend any grounds before or at the time of hearing of appeal.”
5. Rival contentions were heard and the submissions made have been examined. The Ld. AR brought to our notice that in the assessee’s own case in for AY 2014-15 vide order dated 12.09.2025, the appeal against the quantum addition was allowed by the Coordinate Bench of the Hon'ble Tribunal and the matter has been restored to the Ld. AO for the assessment to be done afresh and the copy of the order has been filed; the relevant extract of which is as under:
“5. After hearing the rival submissions and perusing the orders of lower authorities, I find that One Sri Pradip Das was working with the assessee and received the amount. Some of the bills and vouchers were lacking therefore, the AO had disallowed the difference amount. Before the Bench,