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Facts
The assessee filed an appeal against the order of the CIT(A) which was passed emanating from a penalty order under Section 271(1)(c) of the Income Tax Act. The penalty was levied on an alleged unexplained investment in commodity trading.
Held
The Tribunal set aside the order of the CIT(A) for de novo adjudication, directing the CIT(A) to provide an opportunity to the assessee. The grounds of appeal were allowed for statistical purposes.
Key Issues
Whether the penalty under Section 271(1)(c) was sustainable when the quantum addition was set aside, and if the CIT(A) had granted a proper opportunity of being heard.
Sections Cited
250, 271(1)(c), 69
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Income Tax Appellate Tribunal, PUNE BENCHES “SMC” :: PUNE
Before: DR.DIPAK P. RIPOTE & SHRI VINAY BHAMORE
ORDER
PER DR. DIPAK P. RIPOTE, AM:
This appeal filed by the Assessee against the order of ld.Commissioner of Income Tax(Appeal)[NFAC] passed under section 250 of the Income Tax Act, 1961 for the A.Y.2014-15 dated 20.06.2025 emanating from the Penalty Order passed under section 271(1)(c) of the Income Tax Act, 1961 dated 14.09.2022. The Assessee has raised the following grounds of appeal : [A] “1 On the facts and in the circumstances of the case and in law, Commissioner of Income Tax (Appeals), NATIONAL FACELESS APPEAL CENTRE (NFAC), Delhi, erred in appreciating fact that the quantum appeal against the assessment order has been restored to the file of the CIT (A) by the Hon'ble ITAT, Pune Bench, vide appeal no. dated 10.12.2024 and hence, the penalty levied under section 271(1)(c) is premature and liable to be deleted.
2 The learned authorities below failed to appreciate that the alleged unexplained investment of ₹25,96,575/- was sourced from a loan of 231,50,000/- taken from Geojit Financial Services Ltd. and the same was invested in commodity trading with Geojit Comtrade Ltd. Therefore, the addition made under section 69 was unjustified and, consequently, the penalty levied thereon is not sustainable.
3 On the facts and in the circumstances of the case and in law, the learned CIT(A) erred in confirming the penalty of 26,83,679/- levied under section 271(1)(c) of the Income Tax Act, 1961, without appreciating that the said penalty is unjustified, arbitrary, and bad in law.
4 The learned CIT(A) erred in dismissing the appeal without granting an effective opportunity of being heard, thereby violating the principles of natural justice.
5 The appellant craves leave to add, amend, modify, alter, revise, substitute, delete any or all grounds of appeal, if deemed necessary at the time of hearing of the appeal.”
Findings & Analysis : 2. We have heard ld.Departmental Representative(ld.DR) for the Revenue and perused the records. The ld.CIT(A) has dismissed the 2 [A] appeal of the Assessee, as Assessee had not filed any reply to notices.
2.1 In this case, the Assessee’s Appeal against assessment order in had been set-aside to ld.CIT(A) by ITAT vide order dated 16.12.2024. Thus, when ld.CIT(A) has decided the appeal of the Assessee against Penalty u/s.271(1)(c) of the Act, on 20.06.2025, the ITAT had already set-aside Quantum Addition for denovo adjudication.
3. In these facts and circumstances of the case, we set-aside the order of ld.CIT(A) to ld.CIT(A) for denovo adjudication The ld.CIT(A) shall provide opportunity to the Assessee. Accordingly, grounds of appeal raised by the assessee are allowed for statistical purpose.
In the result, appeal of the assessee is allowed for statistical purpose. Order pronounced in the open Court on 30 Oct, 2025.
Sd/- Sd/- VINAY BHAMORE Dr.DIPAK P. RIPOTE JUDICIAL MEMBER ACCOUNTANT MEMBER पपणे / Pune; ददिधंक / Dated : 30 Oct, 2025/ SGR 3 [A] आदेशकीप्रनिनलनपअग्रेनषि / Copy of the Order forwarded to : अपऩलधर्थी / The Appellant. 1. प्रत्यर्थी / The Respondent. 2.
The CIT(A), concerned.
4. The Pr. CIT, concerned. नवभधगऩयप्रनिनिनर्, आयकर अपऩलऩय अनर्करण, “एस एम सऩ” बेंच, 5. पपणे / DR, ITAT, “SMC” Bench, Pune. गधर्ाफ़धइल / Guard File. 6. आदेशधिपसधर / BY ORDER, // TRUE COPY // Senior Private Secretary आयकर अपऩलऩय अनर्करण, पपणे/ITAT, Pune. [A] S. Details Date Initi Designati No als on 1 Draft dictated on Sr. PS/PS 30.10.2025 30.10.2025 2 Final Draft placed before author Sr. PS/PS .10.2025 3 JM/AM Draft proposed & placed before the Second Member 4 Draft discussed/approved by Second Member AM/AM 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 9 Date on which the file goes to the Head Clerk 10 Date on which file goes to the A.R. 11 Date of Dispatch of order