Loading judgment…
Facts
The assessee filed an appeal against the CIT(A)'s order for Assessment Year 2016-17, which had dismissed their appeal. The original assessment under section 143(3) of the Income Tax Act led to an increased income and a penalty under section 271(1)(c). The CIT(A) had upheld the penalty.
Held
The Tribunal noted that the quantum appeal related to the same assessment year had been set aside by a co-ordinate bench. Consequently, since the penalty was consequential to the additions made in the quantum appeal, the penalty itself does not survive.
Key Issues
Whether the penalty levied under section 271(1)(c) survives when the primary additions in the quantum appeal have been set aside.
Sections Cited
143(3), 271(1)(c), 250
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, ‘B’ BENCH: CHENNAI
Before: MS. PADMAVATHY.S & SHRI MANU KUMAR GIRI
आदेश / O R D E R
PER PADMAVATHY.S, A.M:
This appeal by the assessee is against the order of the Commissioner of Income Tax (Appeals)/National Faceless Appeal Centre (NFAC), Delhi, (in short "CIT(A)") passed u/s. 250 of the Income Tax Act, 1961 ( in short "the Act") dated 20.08.2025 for Assessment Year (AY) 2016-17.
There is a delay of 17 days in filing the appeal by the assessee. The assessee has filed condonation petition/affidavit stating the reasons for delay in filing the appeal. Having heard both the parties and perused the material on record, we are of the view that there is a reasonable and sufficient cause for the delay in filing the appeal before the Tribunal. Therefore following the Hon’ble Supreme Court decision in the case of Collector, Land Acquisition Vs. MST.Katiji & Ors., (167 ITR 471) (SC), we condone the delay of 163 days in filing the appeal and admit the appeal for adjudication.
The assessee is a company and filed the return of income for A.Y 2016- 17 on 17.10.2016 declaring a total income of Rs. 30,04,81,770/-. The case was selected for scrutiny and the A.O completed the assessment u/s. 143(3) assessing the income of the assessee at Rs. 35,17,32,603/-. Subsequently, the A.O initiated penalty proceedings u/s. 271(1)(c) of the Act and levied a penalty of Rs. 1,70,16,896/-. Aggrieved, the assessee filed an appeal before the CIT(A), who dismissed the appeal of the assessee. The assessee is in appeal before the Tribunal against the order of the CIT(A).
We have heard the Ld. D.R, and perused the material available on record. During the course of hearing, it is brought to our attention that in the quantum appeal filed before the Tribunal (ITA No.1404 & 1405/Chny/2023 dated 19.03.2025), the Co-ordinate Bench has set aside the impugned additions back to the A.O for consideration on merits to be decided in accordance with law. Considering that the quantum appeal has been set aside
In the result, appeal of the assessee is allowed.
Order pronounced on 27th day of January, 2026 at Chennai.