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Facts
The assessee acquired an immovable property worth Rs. 70,00,000/-, which led to a reassessment. The quantum appeal concerning the addition of this amount was eventually allowed by the Tribunal. Subsequently, a penalty under Section 271(1)(c) was levied and sustained by the CIT(A).
Held
The Tribunal held that since the quantum addition, on which the penalty was based, was deleted by the coordinate bench, the penalty levied is non-surviving. Consequently, the penalty of Rs. 15,49,120/- was deleted.
Key Issues
Whether penalty under Section 271(1)(c) can survive when the underlying addition is deleted by the Tribunal? Whether the penalty order is bad in law due to non-specification of grounds and lack of DIN?
Sections Cited
271(1)(c), 144, 147, 68
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, DELHI BENCH ‘E’: NEW DELHI
Before: SHRI MAHAVIR SINGH, HON’BLE & SHRI AVDHESH KUMAR MISHRA
A.Y. 2011-12 Pawan Kumar Sharma, Vs. Income Tax Officer, E-41, BETA-1, Ward-5(2)(1), Greater Noida, Income Tax Office, Gautam Budh Nagar, UP Noida PAN: ABRPS9989C (Appellant) (Respondent) Appellant by Sh. Neeraj Mangla, CA Respondent by Sh. Manoj Kumar, Sr. DR Date of Hearing 21/11/2025 Date of Pronouncement 27/11/2025 ORDER
PER AVDHESH KUMAR MISHRA, AM
This appeal of the assessee for Assessment Year (‘AY’) 2011-12 is directed against the order dated 30.10.2024 of the Commissioner of Income Tax (Appeals), NFAC, New Delhi [‘CIT(A)’].
The assessee has raised following grounds of appeal: -
1. That the penalty order passed by Ld. AO as well as the appellate order passed by Ld. CIT(A) upholding levy of penalty are bad in law and have been passed in contravention of prevailing law as well as facts of the case, therefore liable to be annulled.
2. That the notice issued u/s 271(1)(c) of the Act on dual grounds of concealment of income and furnishing of inaccurate particulars of income is illegal and not tenable under the law.
Pawan Kumar Sharma 3. That the penalty order passed u/s 271(1)(c) of the Act is further illegal and not sustainable in law as the Ld. AO in the penalty order could not specify the charge for levy of penalty. i.e. whether the same is for concealment of income or for furnishing of inaccurate particulars of income.
That the penalty levied u/s 271(1)(c) of the Act is further illegal and not tenable under the law as the same was levied by Ld. AO and was upheld by Ld. CIT(A) mechanically due to the fact that the additions are made to the income of assessee and were upheld in appellate proceedings ignoring the fact that the assessee furnished bonafide explanations and evidences w.r.t. alleged income and same were rejected only due to technicalities.
That the penalty of Rs.15,49,120/- upheld by Ld. CIT(A) is not tenable under the law as the assessee has neither furnished inaccurate particulars of his income nor has concealed any particulars of his income.
That the penalty order and the appellate orders passed by in case of assessee are further illegal and not tenable under the law because of being passed without mentioning DIN in the body of said orders.
7. That the assessee company seeks leave to add, alter, modify or delete any ground of appeal
during the course of appellate proceedings.”
3. The relevant facts giving rise to this appeal are that the assessee has acquired an immovable property worth of Rs.70,00,000/- during the relevant year. Based on this information, the case of assessee was reopened and consequential assessment was completed under section 144 r.w.s. 147 of the Income Tax Act, 1961 (‘Act’), wherein the Ld. Assessing Officer (‘AO’), holding the investment of Rs.70,00,000/- in immovable property as unexplained, taxed the same accordingly. Dissatisfied with the assessment order, the assessee filed appeal before the Ld. CIT(A), but did not succeed. However, he succeeded in the Tribunal in quantum appeal. The relevant part of quantum Pawan Kumar Sharma appeal of assessee decided by the coordinate bench in reads as under: “7. From examination of record in light of aforesaid rival contentions, it is crystal clear that Ld. CIT(A) relied on non-PAN based AIR Information received by Ld. AO regarding purchase of immoveable property for Rs.70,00,000/-by the assessee. During assessment proceedings, assessee did not appear. Ex parte assessment was completed by the Ld. AO vide order dated 30.10.2018.
7.1 In the appellate proceedings, assessee filed additional evidence. Remand report of Ld. AO was received. The assessee gave details of FDR which were accepted to be correct.
7.2. In para 4.4.4.2, Ld. CIT(A) held that assessee has not filed any confirmation report which has been challenged by the submissions made by Learned Authorized Representative for the assessee. Ld. CIT(A) in para 4.4.4.4 failed to consider receipts from M/s. Sarla Aluminium Structure Pvt. Ltd and M/s. M/s. Sarla Glass Traders and receipt of Rs.7,00,000/- from Nirmaan Infrastructure submitted by the assessee. The above referred evidence submitted by appellant/assessee clearly showed discharge of onus under Section 68 of the Act. Resultantly, the additions made by Ld. AO and partially upheld by La CIT(A) being unsustainable are set aside. Ground of appeal nos. 1 to 5 are accepted.”
5. After dismissal of the quantum appeal by the Ld. CIT(A), the Ld. AO, on the above-mentioned addition of Rs.70,00,000/-, levied penalty under section 271(1)(c) of the Act, which was sustained by the Ld. CIT(A). Aggrieved with the said penalty order, the assessee filed this appeal.
6. At the outset, the Ld. Authorized Representative (‘AR’) of the assessee submitted that the penalty levied under section 271(1)(c) of the Act did not survive as the quantum addition made by the Ld. AO, on which the penalty
We have heard both parties and have perused the material available on the record. In view of the fact that the quantum appeal based on which the penalty levied does not survive after the Tribunal order in therefore, the penalty levied by the Ld. AO is held non- surviving. Consequentially, the penalty of Rs.15,49,120/- levied under section 271(1)(c) of the Act is hereby deleted. Resultantly, the assessee gets relief. Other grounds, in view of the above finding, become academic; hence, the same are not being adjudicated here.
In the result, the appeal of assessee stands allowed as above.
Order pronounced in the open court on 27th November, 2025.