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Facts
The assessee, a public religious trust, was levied a penalty of Rs.13,388/- under section 271AAC(1) of the Income Tax Act, 1961, for the assessment year 2019-20. This penalty was based on an addition made under section 69C of the Act. The assessee appealed the penalty to the First Appellate Authority (FAA), which confirmed the penalty. The assessee then filed an appeal with the Tribunal.
Held
The Tribunal noted that a separate appeal concerning the quantum assessment had resulted in the deletion of the addition made under section 69C. Since the penalty was imposed based on this addition, and the addition was subsequently deleted by the Tribunal, the penalty order could not survive.
Key Issues
Whether the penalty imposed under section 271AAC(1) is sustainable when the addition made under section 69C, on which the penalty was based, has been deleted by the Tribunal.
Sections Cited
271AAC(1), 69C, 12A, 143(3), 250
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, ‘B’ BENCH, CHENNAI
Before: SHRI GEORGE GEORGE K & SHRI INTURI RAMA RAO
आदेश/ O R D E R
PER GEORGE GEORGE K, VICE PRESIDENT:
This appeal filed by the assessee is directed against the order of Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi dated 06.08.2025 passed under section 250 of the Income Tax Act, 1961 (hereinafter called ‘the Act’). The relevant Assessment Year is 2019-20.
2 -: 2. The solitary issue that is raised is whether the First Appellate Authority (FAA) is justified in confirming the penalty imposed u/s.271AAC(1) of the Act amounting to Rs.13,338/-.
Brief facts of the case are as follows: The assessee is a public religious trust registered u/s.12A of the Act. For the assessment year 2019-20, assessment u/s.143(3) of the Act was completed in the case of the assessee trust vide order dated 12.02.2021. In the said assessment order, addition u/s.69C of the Act amounting to Rs.2,23,149/- was made. Penalty u/s.271AAC of the Act amounting to Rs.13,388/- was imposed on said addition made u/s.69C of the Act vide order dated 27.08.2021.
Aggrieved by the order of penalty imposed u/s.271AAC(1) of the Act, assessee trust filed appeal before the FAA. The FAA noticed that appeal filed by the assessee as against quantum assessment has been dismissed by the first appellate order dated 11.07.2025. Further the FAA observed that assessee has not contested the penalty on merits. Accordingly, the order imposing penalty u/s.271AAC(1) of the Act amounting to Rs.13,388/- was confirmed.
Aggrieved by the FAA order, assessee has filed the present appeal. None was present on behalf of the assessee. However, we 3 -: noticed as against the quantum assessment, assessee had filed further appeal and Tribunal in vide its order dated 28.10.2025 had deleted addition made u/s.69C of the Act.
The Ld.DR was duly heard.
We heard the Ld.DR and perused the material on record. The penalty u/s.271AAC(1) of the Act was imposed on the basis of quantum addition made u/s.69C of the Act. Since the Tribunal has deleted the addition made u/s.69C of the Act, penalty order which arises from the order of quantum assessment does not survive. Hence, the penalty amounting to Rs.13,388/- u/s.271AAC(1) of the Act is deleted. It is ordered accordingly.
In the result, the appeal filed by the assessee is allowed.
Order pronounced in the open court on 13th February, 2026 at Chennai.