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Facts
The assessee did not file his return of income for assessment year 2015-16. The Assessing Officer completed the assessment under section 144 read with section 147 and initiated penalty proceedings under section 271(1)(c). The assessee had sold an immovable property for Rs. 50,14,000/-, for which an order under section 148A(d) was passed.
Held
The ITAT had previously set aside the CIT(A)'s order regarding the quantum appeal and remitted the matter back to the AO for reassessment. The Tribunal held that since the assessment order, which formed the basis for penalty proceedings, was set aside and reassessment was directed, the penalty proceedings became infructuous.
Key Issues
Whether penalty proceedings initiated based on an assessment order that has been set aside for de novo reassessment are infructuous.
Sections Cited
250, 148A, 148, 144, 147, 271(1)(c)
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Income Tax Appellate Tribunal, “B” BENCH KOLKATA
Before: Shri Rajesh Kumar & Shri Pradip Kumar Choubey
order
: February 27, 2026 ORDER
Per Pradip Kumar Choubey, Judicial Member:
This appeal filed by the assessee is directed against the order dated 26.06.2025 of the NFAC, Delhi passed u/s 250 of the Income-tax Act, 1961 (hereinafter referred to as “the Act”) for the assessment year 2015–16.
Brief facts of the case are that the assessee did not file his return of income for the assessment year 2015-16. As per information available with the department, the assessee has sold an immovable property for a sale consideration of Rs.50,14,000/-. Order u/s 148A(d) was passed and notice u/s 148 of the Act was issued to the assessee. During the assessment proceedings, the assessee did neither comply nor made any submission. The Assessing Officer completed the assessment u/s 144
The assessee preferred appeal before the ld. CIT(A) against the quantum as well as penalty order of the Assessing Officer.
Aggrieved and dissatisfied, the assessee is in appeal before us against the penalty order. At the time of hearing, the Ld. AR submits that the assessee got an order from ITAT against the quantum of appeal in which the ITAT had set aside the order of the ld. CIT(A) filed by the assessee against the quantum and remitted back the matter to Assessing Officer for making reassessment de novo. The ld. AR submits that since the assessment order from which the penalty proceedings have been initiated has been set aside and the Assessing Officer was directed to make reassessment de novo, therefore, the penalty proceedings become infructuous. The ld. AR placed the order of the ITAT passed in ITA No.2064/Kol/2025.
Contrary to that, the ld. DR submits that the penalty proceedings is a separate proceeding.
We have considered the submissions of the counsels of the respective parties and perused the material available on record. We find that the assessee preferred appeal against quantum before the ld. CIT(A) and after that the assessee preferred appeal before the ITAT and ITAT in its order has held that ‘after examining the facts of the case, we deem it appropriate to set aside the order of the ld. CIT(A) and remit the matter back to the ld. A.O for making the reassessment de novo’. In our opinion, Assessing Officer has been directed to assess the total income of the assessee as de novo, the penalty proceedings which have been initiated on the basis of first assessment order become infructuous. Accordingly, we set aside the order of penalty proceedings, however, the Assessing Officer is at liberty to start fresh penalty proceedings after making fresh reassessment.
In the result, the appeal filed by the assessee is allowed. Kolkata, the 27th February, 2026.