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Facts
The assessee appealed against a penalty order issued under section 271AAC for Assessment Year 2019-20. It was brought to the Tribunal's attention that the Commissioner of Income Tax (Appeals) had already set aside the original assessment order for the same year for de novo adjudication.
Held
The Tribunal ruled that as the foundation (assessment order) for the penalty had been set aside for fresh adjudication, the consequential penalty order must also be set aside to the Assessing Officer for de novo adjudication.
Key Issues
Whether a penalty order levied under Section 271AAC can stand when the underlying assessment order has been set aside for de novo adjudication.
Sections Cited
250, 271AAC, 115BBE
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Income Tax Appellate Tribunal, PUNE BENCHES “A” :: PUNE
Before: DR.DIPAK P. RIPOTE & SHRI VINAY BHAMORE
This appeal filed by the Assessee is against the order of ld.Commissioner of Income Tax(Appeal)[NFAC], passed u/s.250 of the Act, for A.Y.2019-20 dated 29.09.2025 emanating from the penalty order u/s.271AAC of the Act, dated 25.07.2024. The Assessee has raised the following grounds of appeal :
On the facts and the circumstances of the case and in law, lower authorities erred in passing ex-parte order and erred in deciding the issue only on the basis of material available with them, this action is being violative of principal of natural justice. Your appellant prays for granting opportunity of hearing before lower authorities. Without prejudice to the above grounds of appeal
, following grounds are also taken on merit,
2. On the facts and in the circumstances of the case and in law, Ld. AO erred in levying the penalty u/s 271AAC(1) for a sum of Rs. 14,03,593/- being 10 percent of the tax payable as per provisions of section 115BBE, without appreciating the facts of the case. Your appellant prays for deletion of this penalty Your appellant prays for deletion of entire addition. Your appellant craves for to add, alter amend, modify, delete any or all grounds of appeal before or during the course of hearing in the interest of principle of natural justice.”
2. At the outset of hearing, ld.AR for the assessee submitted that in this case, the assessment order for A.Y.2019-20 has been set- aside by ld.CIT(A) to Assessing Officer for denovo adjudication vide order dated 29.10.2025. Ld.AR filed copy of the order of ld.CIT(A) dated 29.10.2025.
Since the assessment order has been set-aside by ld.CIT(A) for denovo adjudication, the consequential penalty order dated 25.07.2024 is also set-aside to the Assessing Officer for denovo adjudication. Accordingly, grounds of appeal raised by the assessee are allowed for statistical purpose.