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Facts
The assessee's appeal was filed after a delay of 128 days due to medical reasons. The appeal was directed against the order of the CIT(A) confirming a penalty levied under Section 271AAC(1) of the Income-tax Act, 1961.
Held
The Tribunal condoned the delay in filing the appeal. It was noted that the Tribunal had previously deleted the quantum addition made by the AO, on which the penalty was levied. Therefore, the penalty was held to be unsustainable.
Key Issues
Whether the penalty levied under section 271AAC(1) is sustainable when the underlying quantum addition has been deleted by the Tribunal?
Sections Cited
250, 271, 271AAC(1), 893, 894
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Income Tax Appellate Tribunal, SMC BENCH, PUNE
Before: Dr. MANISH BORAD
Assessee by : Shri Sanket Joshi Revenue by : Shri R.Y. Balawade, Addl. CIT Date of hearing : 30.09.2025 Date of : 07.10.2025 pronouncement आदेश/ORDER
PER DR. MANISH BORAD, ACCOUNTANT MEMBER :
This appeal at the instance of assessee is directed against the order of Ld. CIT(A) NFAC, Delhi u/s 250 of the Income-tax Act, 1961 dated 21.02.2025 which is arising out of order passed u/s 271 dated 10.09.2022.
Registry has informed that the present appeal is time barred by 128 days. Application for condonation of delay has been filed. The main reason for the delay is that the assessee was undergoing medical treatment for Hypertension and Blood Pressure. Medical certificate of the Doctor is enclosed. Considering the reasons mentioned in the application for condonation of delay and also taking guidance from the judgement of Hon’ble Apex Court in the case in the case of Collector, Land Acquisition vs. Master Katiji and Others(1987) 167 ITR 471(SC) (Supreme Court) and in the case of Inder Singh Vs State of Madhya Pradesh judgement dated 21.03.2025 (2025) INSC 382), I hereby condone the delay of 128 days and admit the application for adjudication.
The sole grievance of the assessee in this appeal is against the finding of Ld. CIT(A) confirming the penalty levied by the Assessing Officer u/s 271AAC(1) of the Act at Rs. 2,68,366/- computed on the quantum addition of Rs. 34,74,000/-
At the outset Ld. Counsel for the assessee submitted that this Hon’ble Tribunal has already deleted the quantum addition made in the hands of assessee by quashing the assessment proceedings vide & 894/PUN/2024 dated 06.08.2025 for A.Y. 2017-18 and A.Y. 2018-19 and therefore no penalty is leviable on the assessee.
On the other hand Ld. Departmental Representative (DR) supported the order of the lower authorities.
I have heard rival contentions and perused the record placed before me. The penalty u/s 271AAC(1) at Rs. 2,68,366/- is challenged before me. The impugned penalty has been levied on the addition of Rs. 34,74,000/- made for unexplained cash deposit. I further find that this Tribunal vide its order & 894/PUN/2024 dated 06.08.2024 has already deleted the quantum addition made by the AO for A.Y. 2016-17 and 2017-18. Under these given facts and circumstances since the impugned penalty has been levied on the quantum addition which this Tribunal has already struck down, therefore the impugned penalty has no legs to stand and deserves to be deleted. Finding of Ld. CIT(A) is reversed and impugned penalty is deleted. Grounds of appeal raised by the assessee is allowed.
In the result appeal of the assessee is allowed.
Order pronounced on this 07th day of October, 2025.