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Facts
The assessee filed an appeal against the order of CIT(A) which confirmed the penalty levied under section 271(1)(c) for AY 2010-11. The assessee's counsel pointed out that the quantum appeal, which formed the basis for the penalty, had been restored to the AO for fresh adjudication.
Held
The Tribunal noted that the quantum appeal had been restored to the AO for fresh adjudication. Therefore, the penalty matter was also restored back to the AO to be decided afresh along with the quantum proceedings.
Key Issues
Whether the penalty order needs to be quashed when the underlying quantum addition is pending adjudication.
Sections Cited
271(1)(c), 250
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Income Tax Appellate Tribunal, SURAT BENCH “SMC”, SURAT
Before: SMT. ANNAPURNA GUPTA
O R D E R The present appeal has been filed by the assessee against the order of the Ld. Commissioner of Income Tax (Appeals), (hereinafter referred to as “CIT(A)”), National Faceless Appeal Centre (in short “NFAC”), Delhi order dated 11.11.2025 passed under Section 250 of the Income Tax Act, 1961 (hereinafter referred to as the “Act”) confirming the levy of penalty u/s 271(1)(c) of the Act and relates to Assessment Year (A.Y.) 2010-11.
At the outset, itself Ld. Counsel for the assessee pointed out that the quantum appeal of the assessee, the additions made in which were the basis for the levy of penalty, has been restored back by the ITAT to the AO for adjudication afresh in vide its order dated 15.12.2025. copy of the order was placed before us. He accordingly stated that the impugned penalty order needed to be quashed, Since the issue in quantum proceeding was still pending before the AO.
In light of the above, since the quantum appeal of the assessee has been restored back to the file of the AO for adjudication afresh the penalty matter is also restored back to the file of the AO to be decided afresh along with quantum proceedings.
In the result, the appeal of the assessee is allowed for statistical purposes.
This Order pronounced in Open Court on 23/03/2026