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Facts
The assessee filed an appeal against the order of the CIT(A) which confirmed the penalty levied under Section 271(1)(c) for concealing income/furnishing inaccurate particulars. The penalty was based on an addition of Rs. 10,00,100/- on account of unexplained cash deposits in the bank account.
Held
The Tribunal noted that the issue of addition to income was earlier restored to the CIT(A) by the ITAT for fresh consideration of evidence. Since the addition itself was subject to re-adjudication, the penalty order related to it was also restored to the CIT(A) for adjudication along with the quantum proceedings.
Key Issues
Whether the penalty order could be sustained when the addition on which it was based was restored for fresh consideration by a higher appellate authority?
Sections Cited
271(1)(c)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “SMC” BENCH, AHMEDABAD
Before: SMT. ANNAPURNA GUPTA
The present appeal has been filed by the assessee against the order of the Ld. Commissioner of Income Tax (Appeals), (hereinafter referred to as “CIT(A)”), National Faceless Appeal Centre (hereinafter referred to as “NFAC”), Delhi dated 18.06.2025 confirming the levy of penalty for concealing particulars of income / furnishing inaccurate particulars of income, levied under Section 271(1)(c) of the Income Tax Act, 1961 (hereinafter referred to as the “Act”) and relates to Assessment Year (A.Y.) 2011-12.
Mrugeshkumar Shah vs. ACIT] A.Y. 2011-12 - 2 – 2. The orders of the authorities below reveal that penalty was levied for addition made to the income of the assessee on account of cash found deposited in her bank account, source of which remained unexplained amounting to Rs.10,00,100/-. The quantum of penalty levied was the minimum penalty leviable being 100% of the tax sought to be evaded amounting to Rs.1,55,561/-. The same was confirmed by the Ld. CIT(A).
Before us, Ld. Counsel for the assessee pointed out that the addition made to the income of the assessee on which penalty was levied by the AO and confirmed by the Ld.CIT(A) was challenged by the assessee before the ITAT, who, in turn, restored the issue back to the file of the Ld.CIT(A) for re-consideration. The copy of the order of the ITAT in assessee’s appeal in dated 24.09.2025 was placed before us and our attention was drawn to para 7 to 7.6 of the order, wherein it was pointed out that the ITAT had noted that the authorities below had not properly appreciated the evidences filed by the assessee explaining the source of cash deposits and, therefore, had restored the issue back to the file of the Ld. CIT(A) to consider all the evidences afresh supply the remand report of the AO to the assessee and, thereafter pass speaking order after affording adequate opportunity of hearing to the assessee.
Ld. DR fairly agreed with the same.
In the light of the same, since, the addition on which penalty has been levied has been set aside to the Ld. CIT(A) for re- consideration, the penalty order of the Ld. CIT(A) is also restored Mrugeshkumar Shah vs. ACIT] A.Y. 2011-12 - 3 – back to his file to be adjudicated alongwith appeal of the assessee in quantum proceedings.
In the result, the appeal filed by the assessee is allowed for statistical purposes.
This Order pronounced on 17/10/2025
Sd/- (ANNAPURNA GUPTA) ACCOUNTANT MEMBER Ahmedabad; Dated 17/10/2025 S. K. SINHA True Copy आदेश क� �ितिल�प अ�े�षत/Copy of the Order forwarded to : अपीलाथ� / The Appellant 1. ��यथ� / The Respondent. 2. 3. संबंिधत आयकर आयु� / Concerned CIT आयकर आयु�(अपील) / The CIT(A)- 4. �वभागीय �ितिनिध, आयकर अपीलीय अिधकरण, अहमदाबाद / DR, ITAT, Ahmedabad 5. 6. गाड� फाईल / Guard file. आदेशानुसार/ BY ORDER,