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Facts
The assessee's income was assessed at Rs. 16,59,86,605/-, with additions made under Section 41(1) for unexplained sundry creditors and disallowance of expenses. A penalty of Rs. 3,63,46,544/- was imposed under Section 270A for under-reporting of income, which was confirmed by the CIT(A).
Held
The Tribunal noted that the quantum appeal, which formed the basis for the penalty, was remitted back to the Assessing Officer for fresh assessment. Consequently, the penalty order was deemed infructuous and was also remitted back to the Assessing Officer for a fresh decision based on the outcome of the new assessment.
Key Issues
The key legal issue was the validity of the penalty imposed under Section 270A when the underlying quantum assessment, on which the penalty was based, was set aside and remitted for fresh assessment.
Sections Cited
Section 41(1), Section 144, Section 144B, Section 250, Section 270A
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, AGRA BENCH, AGRA
Before: SHRI S. RIFAUR RAHMAN & SHRI SUNIL KUMAR SINGH
ORDER PER : SUNIL KUMAR SINGH, JUDICIAL MEMBER:
This appeal has been preferred by assessee against the impugned order dated 20.08.2025, passed in Appeal No. NFAC/2020-21/10264126 by the learned Commissioner of Income-tax (Appeals), NFAC, Delhi u/s. 250 of the Income-tax Act, 1961 (hereinafter referred to as “the Act”) for the assessment year 2021-22, wherein learned CIT(Appeals) has dismissed assessee’s first appeal, confirming the penalty imposed by Assessing Officer u/s. 270A of the Act, vide penalty order dated 26.06.2023.
Brief facts are that the assessment in this case was completed for A.Y. 2021-22, vide order dated 22.12.2022 passed u/s. 144 r.w.s. 144B of the Act and assessed an income of Rs.16,59,86,605/-. The penalty proceedings u/s. 270A of the Act for under-reporting of income were also initiated, based on the addition of Rs.4,04,56,421/- made u/s. 41(1) of the Act on account of unexplained sundry creditors and addition of Rs.20,33,180/- made on account of disallowance of various expenses claimed by assessee. The Assessing Officer imposed penalty of Rs.3,63,46,544/- @ 200% of the amount of tax payable on the aforesaid two additions, vide penalty order dated 26.06.2023.
Aggrieved, assessee preferred first appeal before learned CIT(A), who confirmed the penalty and dismissed assessee’s first appeal.
This second appeal has been preferred on the ground that the learned CIT(A) has erred in confirming the penalty without allowing reasonable opportunity of hearing and ignoring the fact that penalty order was passed without specifying any specific charge/limb of section 270A in the show cause notice.
Perused the records. Heard learned representative for assessee and learned DR for revenue.
At the very outset, learned AR for assessee has brought to our notice that the quantum appeal filed by assessee 2 | P a g e has been remitted back to the file of Assessing officer for passing the assessment afresh. Hence, the penalty order does not survive, having become infructuous.
Learned DR for revenue has supported the impugned order passed by Ld. CIT(A).
We observe that once the appeal filed before the ITAT against the quantum additions, on the basis of which, impugned penalty was imposed by the Assessing Officer, has been remitted back to the file of Assessing Officer for passing assessment order afresh, we deem it expedient in the interest of justice that the present matter relating to penalty u/s. 270A of the Act should also go back to the file of Assessing Officer for passing penalty order afresh in accordance with law based on the outcome of fresh assessment. We order accordingly. Needless to say that the Assessing Officer shall ensure observance of the principles of natural justice. Assessee’s appeal is liable to be allowed for statistical purposes accordingly.
In the result, assessee’s appeal is allowed for statistical purposes.
Order pronounced in the open court on 15.01.2026.