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Facts
The assessee filed appeals against penalty orders levied under section 271(1)(c) and 271AAC(1) of the Act. The appeals were dismissed by the CIT(A) due to delay. The assessee's quantum appeals for the relevant assessment years had been restored to the AO for readjudication.
Held
The Tribunal condoned the delay in filing the appeals before the CIT(A). Since the quantum issues on which the penalties were levied were restored for readjudication, the basis for the penalty no longer survived. Therefore, the penalties were deleted.
Key Issues
Whether penalty proceedings can survive when the underlying quantum additions are set aside for readjudication. Condonation of delay in filing appeal before CIT(A).
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 //// (