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Facts
The assessee's appeal concerns a penalty levied under Section 271(1)(c) for the assessment year 2014-15. The assessee argued that since the quantum appeal was remanded for denovo adjudication, the penalty appeal should also be remanded for completeness. The CIT(Appeals) had dismissed the penalty appeal, stating it was consequential to confirmed additions.
Held
The Tribunal observed that the CIT(Appeals) had not provided specific reasons for the maintainability of the penalty and had levied it in a routine manner. Given that the quantum appeal was being remanded, the Tribunal decided to set aside the order of the CIT(Appeals) and remand the penalty appeal back for denovo adjudication.
Key Issues
Whether the penalty appeal should be remanded for denovo adjudication when the quantum appeal has been remanded, and whether the penalty was rightly sustained by the CIT(Appeals) without specific findings.
Sections Cited
271(1)(c)
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Income Tax Appellate Tribunal, RAIPUR BENCH, RAIPUR
Before: SHRI PARTHA SARATHI CHAUDHURY & SHRI AVDHESH KUMAR MISHRA
आदेश / ORDER
PER PARTHA SARATHI CHAUDHURY, JM:
The present appeal preferred by the assessee emanates from the order of the Ld.CIT(Appeals)/NFAC, Delhi dated 03.09.2025 for the assessment year 2014-15 as per the grounds of appeal on record.
2. This is the penalty appeal before us. The Ld. Counsel for the assessee at the time of hearing submitted that the quantum appeal for the same assessee being ex-parte order has been remanded to the file of the Ld.CIT(Appeals)/NFAC for denovo adjudication as per law. He further submitted that since quantum appeal has been remanded to the file of the Ld.CIT(Appeals)/NFAC, penalty appeal should also be therefore remanded for the sake of completeness for purpose of adjudication a/w. quantum.
The Ld. Sr. DR did not raise any objection regarding submissions put forth by the Ld. Counsel for the assessee.
Having heard the submissions of the parties herein and it is correct that the quantum appeal has been remanded to the file of the Ld. CIT(Appeals)/NFAC for the fact that the order of the Ld. CIT(Appeals)/NFAC was an ex-parte order, hence, the matter has been remanded for denovo adjudication as per law. It is also correct as per submissions of the Ld. Counsel for the assessee that since quantum has been remanded, hence for the sake of completeness, penalty appeal should also be remanded back to the file of the First Appellate Authority and we agree also. Furthermore, it is observed that regarding the maintainability of the penalty u/s.271(1)(c) of the Act, nothing has been brought on record by the Ld. CIT(Appeals)/NFAC. At para 7.1 of the impugned order, the Ld. CIT(Appeals)/NFAC writes that since quantum addition has been confirmed, the grounds raised by the assessee in the present appeal does not survive. The relevant para 7.1 of the Ld. CIT(Appeals)/NFAC’s order is extracted as follows: “7.1. In view of the above, and after considering the penalty order passed under section 271(1)(c) of the Act, the statement of facts, and the written submissions filed by the ssessee. It is seen that the penalty has been levied on account of additions made during the quantum assessment, and the assessee's appeal against such additions has already been dismissed by the Ld. CIT(A) vide order dated 12.08.2025. This means that the additions to income have been confirmed, and the AOs findings stand vindicated. Since the penalty proceedings are consequential in nature and the quantum addition has been confirmed, the grounds raised by the assessee in the present appeal do not survive. I therefore find no infirmity in the order of the AO that the assessee is guilty of concealment of income, as he has not furnished any explanations in multiple proceedings carried out at multiple stages and forums under the Act. Therefore, the appeal filed by the assessee is found to be not maintainable and is accordingly DISMISSED.”
We observe that penalty has been levied just simply in a routine manner by the Ld. CIT(Appeals)/NFAC without bringing on record the reasons for maintainability of such penalty. Therefore, considering the facts that quantum appeal has been remanded to the file of the Ld.
CIT(Appeals)/NFAC, there is no finding on record in the present appeal before us by the First Appellate Authority regarding the validity of imposition of penalty, therefore, in our considered view, we set-aside the order of the Ld. CIT(Appeals)/NFAC and remand the matter back to its file for denovo adjudication after adjudication of the quantum as per law complying with the principles of natural justice. The adjudication by the First Appellate Authority should be such to bring out specific reasons for imposition of penalty u/s.271(1)(c) of the Act in the hands of the assessee. If there is no reasons for sustaining the additions, then there cannot be any routine manner to impose penalty in the hands of the assessee.
As per the above terms, appeal of the assessee is allowed for statistical purposes. Order pronounced in the open court on 10th April, 2026.
Sd/- Sd/- AVDHESH KUMAR MISHRA PARTHA SARATHI CHAUDHURY (ACCOUNTANT MEMBER) (JUDICIAL MEMBER) रायपुर/ RAIPUR ; �दनांक / Dated : 10th April, 2026. SB, Sr. PS आदेश क� ��त�ल�प अ�े�षत / Copy of the Order forwarded to :
1. 1. अपीलाथ� /The Appellant. 2. ��यथ� /The Respondent.
3. The CIT(Appeals)-1, Raipur (C.G.) 4. �वभागीय ��त�न�ध, आयकर अपील�य अ�धकरण, रायपुर ब�च, रायपुर / DR, ITAT, Raipur Bench, Raipur.