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Facts
The Revenue appealed against an order imposing a penalty under Section 270A of the Income-tax Act. The penalty was levied for A.Y. 2017-18.
Held
The Tribunal held that since the quantum addition, which formed the basis for the penalty, was deleted by a coordinate bench, the penalty must also fall. The principle 'Sublato Fundamento Cadit Opus' was applied, meaning the superstructure falls if the foundation is removed.
Key Issues
Whether penalty levied under Section 270A is sustainable if the underlying quantum addition has been deleted by a coordinate bench.
Sections Cited
270A
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Income Tax Appellate Tribunal, DELHI ‘E’ BENCH,
Before: SHRI CHALLA NAGENDRA PRASAD, & SHRI NAVEEN CHANDRA
PER NAVEEN CHANDRA, ACCOUNTANT MEMBER:-
This appeal by the Revenue is preferred against the order of the NFAC, Delhi dated 28.02.2025 pertaining to A.Y. 2017-18 against the penalty levied u/s 270A of the Income-tax Act, 1961 [the Act, for short]. the quantum addition made in this case for the instant year, has been deleted by the co-ordinate bench of the ITAT in for A.Y 2017-18 vide order dated 30.10.2025. Therefore, the ld. counsel for the assessee prayed that the penalty may be deleted.
Per contra, the ld. DR fairly conceded to the same.
We have heard the rival submissions and have perused the relevant material on record. We find that this issue in quantum appeal has been decided in favour of the assessee and against the Revenue by the decision of the co-ordinate Bench [supra]. In view of the above facts, the legal dictum of “Sublato Fundamento Cadit Opus”, applies meaning thereby, that in case the foundation is removed, the super structure falls. Since the foundation [quantum addition] has been removed, the super structure i.e. penalty must fall.
Accordingly, we find that once the quantum has been deleted, penalty levied u/s 270A of the Act has no legs to stand. Accordingly, we direct the AO to delete the penalty. dismissed.