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Facts
The assessee, a non-ITR filer, had significant cash withdrawals during FY 2017-18. Despite notices under Section 148, 142(1), and 144 of the Income Tax Act, the assessee did not file a return or respond. Consequently, the Assessing Officer (AO) passed a penalty order under Section 270A. The Commissioner of Income Tax (Appeals) [CIT(A)] dismissed the assessee's appeal against this penalty order.
Held
The Tribunal noted that the quantum addition appeal had already been allowed by the CIT(A) on 09.06.2025. Therefore, the impugned order dated 27.06.2025, which confirmed the penalty order dated 07.08.2023, was deemed unsustainable.
Key Issues
Whether the penalty order under Section 270A is sustainable when the underlying quantum addition appeal has been allowed? Whether the penalty order was passed without affording proper opportunity to the assessee?
Sections Cited
250, 270A, 148, 142(1), 144, 147, 144B, 144
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, DELHI BENCH “E”: NEW DELHI
Before: SHRI S RIFAUR RAHMAN & SHRI VIMAL KUMAR
PER VIMAL KUMAR, JUDICIAL MEMBER:
The appeal filed by the assessee is against the order dated 27.06.2025 of Learned Commissioner of Income Tax (Appeals)National Faceless Appeal Centre(NFAC), Delhi [hereinafter referred to as ‘Ld. CIT(A)] under Section 250 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) arising out of order dated 07.08.2023 of Learned Assessing Officer/the Assessment Unit, Delhi (hereinafter referred to as “Ld. AO") passed under section 270A of the Act for AY 2018-19.
Brief facts of the case are that appellant/assessee is a non- ITR filer. As per the information available on record, it is found that the assessee had made cash withdrawals of Rs. 8,72,89,905/- from the Bank Account with Corporation Bank during the financial year 2017-18 relevant to assessment year 2018-19. As no return of income was filed by the assessee for the relevant assessment year to substantiate such total transactions of Rs.8,75,15,910/- (8,72,89,905 +1,49,605+76,400/-), a notice under Section 148 of the Act was issued to the assessee on 30.03.2022. In response to the notice, the assessee has not filed his return of income. Notices under Section 142(1) of the Act dated 17.10.2022 and 14.11.2022, letter dated 07.12.2022, show-cause-notices under Section 144 dated 05.01.2023 and show-cause-notice dated 17.02.2023 were issued. The assessee did not respond to any of the notices. On completion of proceedings, Ld. AO passed penalty order dated 07.08.2023.
Against penalty order dated 07.08.2023 of Ld. AO, the appellant/assessee filed appeal before Ld. CIT(A), which was dismissed vide order dated 27.06.2025.
Being aggrieved, the appellant/assessee filed present appeal with following grounds of appeal: 2
“1.Ld. CIT(A) erred in upholding the validity of penalty order u/s 270A of the Act dated 07-08-23 vide order dated 27-06- 25, which is without jurisdiction;
2. Ld. CIT(A) erred in confirming the penalty order dated 07- 08-23 u/s 270A of the Act passed by Ld. Assessment Unit, Income Tax Department.
3. Ld. CIT(A) has erred in confirming the penalty amounting to Rs.34,918/- u/s 270A of the Income-tax Act, 1961 on account of addition made Rs.2,23,305/- as per assessment order u/s 147 r.w.s 144 r.w.s 144B of the Income-tax Act, 1961 dated 28-02-23.
4. Ld. CIT(A) erred in confirming the penalty order u/s 270A of the Act, passed by Ld. Assessment Unit, Income Tax Department, without affording proper opportunity”
Learned Authorised Representative for the appellant/assessee submitted that Ld. CIT(A) erred in confirming penalty order despite the fact that quantum addition, appeal had been allowed by Ld. CIT(A) on 09.06.2025.
Learned Authorised Representative for the Revenue submitted that assessee had not filed any ITR and response to the notices.
From examination of record in the light of aforesaid rival contentions, it is crystal clear that the quantum addition appeal has been allowed by Ld. CIT(A) vide order dated 09.06.2025.
Therefore, impugned order dated 27.06.2025 confirming penalty order dated 07.08.2023 being unsustainable are set aside. Accordingly, grounds of appeal nos. 1 to 4 are accepted.