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Facts
The Revenue challenged the deletion of a Section 271D penalty of Rs. 75,08,750/- imposed on the assessee, which arose from a Section 132 search action alleging receipt of cash advances for land transfer. The Tribunal noted that it had previously quashed the underlying assessment made under Section 153C in the assessee's quantum appeal, citing improper satisfaction.
Held
The Tribunal held that the penalty under Section 271D cannot stand once the corresponding assessment, which formed its foundation, has been quashed. Applying the principle 'sublato fundamento cadit opus' (when the foundation itself does not exist, any superstructure raised thereupon falls), the Tribunal deleted the penalty.
Key Issues
Can a penalty levied under Section 271D of the Income Tax Act, 1961, be sustained if the corresponding assessment, which is the basis for the penalty, has already been quashed by the Tribunal for procedural irregularities under Section 153C?
Sections Cited
271D, 132, 153C
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Income Tax Appellate Tribunal, DELHI BENCH ‘G’, NEW DELHI
Before: Sh. Satbeer Singh Godara & Sh. Manish Agarwal
Asstt. Year: 2019-20 DCIT, Vs Renu Singh, Central Circle-3, H. No. C-21/2, Guru Ram Dass New Delhi-110055 Nagar, Laxmi Nagar, New Delhi-110092 (APPELLANT) (RESPONDENT) PAN No. CHVPS2282J Assessee by : Sh. Pranshu Goel, CA & Sh. Aditya Gupta, Adv. Revenue by : Sh. Rajesh Tiwari, Sr. DR Date of Hearing: 18.12.2025 Date of Pronouncement: 18.12.2025 ORDER
Per Satbeer Singh Godara, Judicial Member:
This Revenue’s appeal for Assessment Year 2019-20, arises against the CIT(A)-23, Delhi’s DIN & order No. ITBA/APL/S/250/2024-25/1074809253(1) dated 21.03.2025, in proceedings u/s 271D of the Income Tax Act, 1961 (in short “the Act”).
Heard both the parties at length. Case file perused.
It transpires at the outset during the course of hearing with the able assistance coming from both the parties that the learned lower authorities have levied section 271D penalty of Rs.75,08,750/- in the assessee’s hands; in the Assessing
The Revenue argued in support of the impugned penalty that the same has arisen from section 132 search action dated 17.08.2020 in M/s Panjil Batra group of cases indicating the assessee to have received advances in lieu of alleged transfer of land in cash representing a portion of the entire sale price. It could hardly dispute the clinching fact emanating from the case records that this tribunal in the assessee’s quantum appeal has quashed the impugned assessment dated 15.03.2023 itself as not framed in furtherance to a proper section 153C satisfaction.
Faced with this situation, we hereby conclude that the impugned penalty has no legs to stand once the corresponding assessment itself stand quashed going by sublato fundamento cadit opus i.e. when the foundation itself does not exist; any super structure raised thereupon falls automatically, to delete the penalty in question levied by both the learned lower authorities in very terms