TIRMULA SURYA KUMARI,SRIKAKULAM vs. INCOME TAX OFFICER, WARD-1, SRIKAKULAM
Facts
The Assessing Officer levied a penalty under Section 271(1)(c) of the Income Tax Act, 1961, for Assessment Year 2012-13, based on additions made during the assessment, including an estimated net profit. The Ld.CIT(A) dismissed the assessee's appeal, noting that the penalty order was infructuous as the assessment order itself had been set aside by the ITAT. The assessee further appealed to the ITAT, arguing the penalty notice was ambiguous and the addition was based on estimation.
Held
The Income Tax Appellate Tribunal (ITAT) observed that the original assessment order, which was the basis for the penalty, had already been set aside to the file of the AO by a separate ITAT order. Consequently, the underlying additions would not survive, and therefore, the penalty levied on those additions also could not be sustained. The ITAT deleted the penalty.
Key Issues
Whether a penalty levied under Section 271(1)(c) of the Income Tax Act is sustainable when the assessment order on which the penalty is based has been set aside.
Sections Cited
271(1)(c) of the Income Tax Act, 1961
AI-generated summary — verify with the full judgment below
LOKIREDDI RAMA cn=LOKIREDDI RAMA c=IN 0=INCOME TAX APPELLATE TRIBUNAL ou=INCOME TAX APPELLATE TRIBUNAL 2026-02-26 11:47+05:30 Sr. Private Secretary ITAT, Visakhapatnam", "summary": {"facts": "The assessee filed an appeal against a penalty order passed under section 271(1)(c) of the Income Tax Act. The original assessment order on which the penalty was based was set aside by the ITAT. The assessee argued that the penalty notice was ambiguous as it did not specify the limb under which the penalty was being levied.", "held": "The Tribunal observed that the original assessment order had been set aside by the ITAT. Therefore, the addition itself would not survive, and consequently, the penalty levied on the assessment would also not survive. The Tribunal also noted that the penalty notice was ambiguous, not specifying whether the penalty was for concealment of income or filing inaccurate particulars.", "result": "Allowed", "sections": ["271(1)(c)"], "issues": "Whether the penalty order is valid when the underlying assessment order has been set aside and the penalty notice is ambiguous?"}} ambiguous."}} }}
