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Facts
The assessee's appeal arises from an order of the Assessing Officer imposing penalty. This penalty was directly related to a quantum addition made by the AO, which was the subject matter of a previous appeal (ITA No. 723/Chd/2025).
Held
The Tribunal held that since the quantum additions, which formed the very basis of the penalty, had already been deleted by the Tribunal in a prior appeal, the penalty had no sustainable foundation and therefore directed its deletion.
Key Issues
Whether the penalty can be sustained when the underlying quantum additions have been deleted by the Tribunal.
Sections Cited
1961
AI-generated summary — verify with the full judgment below
Order This appeal by the assessee arises from the order of the Assessing Officer imposing penalty under Income-tax Act, 1961. The penalty is directly related to the quantum addition made by the Assessing Officer, which was the subject matter of appeal in ITA No. 723/Chd/2025.
The learned Authorised Representative submitted that since the very basis of penalty—namely, the addition sustained in quantum proceedings—has already been deleted by the Tribunal in the penalty has no legs to stand.
The learned Departmental Representative, on the other hand, relied upon the orders of the authorities below.
I have considered the rival submissions and perused the record. It is an undisputed fact that the penalty in the present case is entirely based on the additions made by the Assessing Officer in the quantum proceedings. In I have already deleted the said additions. Once the quantum additions themselves are deleted, the very foundation of the penalty does not survive.
Accordingly, I do not find any justification to sustain the penalty imposed by the Assessing Officer. The same is directed to be deleted.
In the result, the appeal of the assessee in is allowed.
Order pronounced on 01.09.2025.