SUJIT TOSHNIWAL,CHENNAI vs. THE ITO, NON-CORP WARD 12(4) CHENNAI., CHENNAI

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ITA 3301/CHNY/2025Status: DisposedITAT Chennai04 March 2026AY 2017-18Bench: SHRI GEORGE GEORGE K (Vice President), SHRI S.R. RAGHUNATHA (Accountant Member)1 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal noted that the penalty order arose from the quantum assessment. Since the quantum assessment had been set aside by the Tribunal, the penalty order lacked a foundational basis and was therefore set aside. The matter was remitted to the FAA for fresh consideration along with the quantum appeal.

What were the facts?

The appeal was filed by the assessee against an order of the CIT(A)-NFAC, which arose from a penalty imposed by the AO under section 271AAC(1) of the Income Tax Act, 1961 for the assessment year 2019-20. The assessee's counsel submitted that the quantum assessment order had been set aside by the Tribunal in a separate appeal.

What were the issues?

Whether the penalty order under section 271AAC(1) is sustainable when the underlying quantum assessment has been set aside.

Which sections of the Income-tax Act were involved?

Section 271AAC(1),Section 250

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, ‘A’ BENCH, CHENNAI

Before: SHRI GEORGE GEORGE K & SHRI S.R. RAGHUNATHA

Hearing: 05.03.2026Pronounced: 05.03.2026

O R D E R

PER GEORGE GEORGE K, VICE PRESIDENT:

1.

This appeal filed by the assessee is directed against the order of Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi dated 14.10.2025 passed under section 250 of the Income Tax Act, 1961 (hereinafter called ‘the Act’). The order of :- 2 -: the CIT(A)-NFAC arises out of the order of the AO imposing penalty u/s.271AAC(1) of the Act. The relevant Assessment Year is 2019-20.

2.

The Ld.AR submitted that as against the quantum assessment, the Tribunal in had set aside the assessment order to the files of the First Appellate Authority (FAA) for fresh adjudication on merits after condoning the delay in filing the appeal before the FAA vide order dated 27.01.2026. The copy of the Tribunal order in & 3311/CHNY/2025 dated 27.01.2026 has been placed on record. The Ld.AR submitted that in light of the quantum assessment order being set aside, the penalty order u/s.271AAC(1) of the Act which arise out of the quantum assessment needs to be set aside.

3.

The Ld.DR supported the order of the AO and FAA.

4.

We have heard rival submissions and perused the material on record. The present appeal emanates from an order imposing penalty u/s.271AAC(1) of the Act. It is an admitted fact that quantum assessment has been set aside by the Tribunal. Therefore, the penalty order arising from the quantum assessment :- 3 -: does not have foundational basis and hence, the same is set aside. Accordingly, we remit the matter back to the files of the FAA for fresh consideration along with the quantum appeal. It is ordered accordingly.

5.

In the result, the appeal filed by the assessee is allowed for statistical purposes.

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