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Facts
The assessee filed two appeals against orders of the CIT(A) concerning penalties under Section 271(1)(c) and 271AAC(1) of the IT Act for assessment years 2015-2016 and 2017-2018. The CIT(A) had dismissed the appeals due to delay in filing. The assessee's plea was that the quantum appeals had been restored to the AO for readjudication.
Held
The Tribunal noted that the quantum issues, which formed the basis for the penalties, had been restored to the AO. Therefore, the penalties themselves had lost their basis. The delay in filing the appeal before the CIT(A) was condoned in the interest of justice.
Key Issues
Whether the penalty levied by the AO and confirmed by the CIT(A) should be deleted when the underlying quantum appeal has been restored to the AO for readjudication, and whether the delay in filing the appeal before the CIT(A) should be condoned.
Sections Cited
271(1)(c), 271AAC(1)
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Income Tax Appellate Tribunal, CUTTACK BENCH CUTTACK
Before: SHRI GEORGE MATHAN & SHRI MADHUSUDAN SAWDIA
Per Bench : These two appeals are filed by the assessee against the separate orders of the Ld.CIT(A), National Faceless Appeal Centre (NFAC), Delhi, both dated 21.11.2025 for the assessment years 2015-2016 & 2017-2018 arising out of the penalty levied u/s.271(1)(c) of the Act & u/s.271AAC(1) of the Act, respectively by the AO and confirmed by the ld. CIT(A).
It was submitted by the Ld.AR that the Ld.CIT(A) has dismissed the appeal of the assessee on account of delay in filing of the both the appeals. It was submitted by the Ld.AR that the quantum appeals in the case of the assessee has been restored to the file of the AO for readjudication in ITA No.231 & 232/CTK/2025, dated 14/08/2025. It was the prayer that the delay in filing of the appeal before the Ld.CIT(A) may be condoned and the restored to the file of the AO for readjudication.
In reply, the Ld. CIT DR and the Sr.DR vehemently supported the order of the AO and CIT(A).
We have considered the rival submissions. As it is noticed that the quantum issues in regard to both the assessment years 2015-16 and 2017- 18 on the basis of which the penalty has been levied, have been restored to the file of the AO for readjudication, the very legs on which the penalty stood no more survive. This being so, in the interest of justice, the delay in filing of the appeal before Ld.CIT(A) is condoned and the penalty is levied by the AO and has confirmed by the Ld.CIT(A) for both the assessment years under consideration stands deleted. The revenue is at liberty to initiate penalty proceedings, if so required in the set aside proceedings.
In the result, both appeals of the assessee are partly allowed Order dictated and pronounced in the open court on 18/02/2026. (MADHUSUDAN SAWDIA) (GEORGE MATHAN) लेखा सद"य/ ACCOUNTANT MEMBER "या"यक सद"य / JUDICIAL MEMBER "दनांक Dated 18/02/2026 Prakash Kumar Mishra, Sr.P.S. आदेश क" ""त"ल"प अ"े"षत/Copy of the Order forwarded to : अपीलाथ" / The Appellant - 1. 2. ""थ" / The Respondent- 3. आयकर आयु"(अपील) / The CIT(A), 4. आयकर आयु"त / CIT िवभागीय "ितिनिध, आयकर अपीलीय अिधकरण, कटक / DR, ITAT,
Cuttack आदेशानुसार/ BY ORDER, 6. गाड" फाईल / Guard file. स"या"पत ""त //// (