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Facts
The Revenue appealed against the CIT(A)'s order deleting a penalty levied under Section 271(1)(c) for AY 2013-14. The penalty was imposed after the assessee's exemption claim under Section 10(26BBB) was withdrawn during reassessment. The CIT(A) deleted the penalty, following a previous order for AY 2009-10.
Held
The Tribunal upheld the CIT(A)'s decision to delete the penalty. It noted that the assessee had filed an undertaking under Section 158A, agreeing to be bound by the outcome of a pending High Court appeal for AY 2010-11 on the same issue. Therefore, the penalty proceedings should not be kept alive.
Key Issues
Whether penalty under Section 271(1)(c) is leviable when the assessee has filed an undertaking under Section 158A regarding a pending High Court decision on the core issue of exemption.
Sections Cited
Section 10(26BBB), Section 143(3), Section 147, Section 158A, Section 250, Section 271(1)(c)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, DEHRADUN “DB” BENCH: DEHRADUN
Before: SHRI MAHAVIR SINGH & SHRI MANISH AGARWAL
ORDER
PER MANISH AGARWAL, AM :
The present appeal is filed by Revenue against the order dated 23.02.2018 by Ld. Commissioner of Income Tax (A), Dehradun [“Ld.CIT(A)”] passed u/s 250 of the Income Tax Act, 1961 [“the Act”] deleting the penalty levied u/s 271(1)(c) vide penalty order dated 24.03.2017 pertaining to Assessment Year 2013-14.
Heard the contentions of both the parties at length and perused the material available on record. In this case, assessment was completed u/s 143(3) r.w.s. 147 of the Act dated 25.02.2015 wherein exemption claimed by the assessee u/s 10(26BBB) of the Act was withdrawn by holding that the assessee is not a statutory corporation eligible for exemption and penalty proceedings u/s 271(1)(c) of the Act were initiated for concealment of income/furnishing inaccurate particulars of income. Thereafter, penalty was levied u/s 271(1)(c) vide order dated 24.03.2017 of INR 2,30,99,600/- on the amount of income claimed as exempted u/s 10(26BBB) as concealed income. IN first appeal, the penalty was deleted by Ld. CIT(A) by following the order in assessee’s own case for AY 2009-10. During the course of hearing, Ld.AR drew our attention to the order of Co-ordinate Bench, Delhi Tribunal in dated 19.03.2025 wherein it was stated by the assessee that the appeal for AY 2010-11 was filed before Hon’ble Uttarkhand High Court in 15/2019 wherein substantial questions of law is admitted by the hon’ble court and matter is pending for final adjudication. The assessee before the Tribunal in AY 2013-14 in quantum appeal, has filed Form 8 as prescribed u/s 158A of the Act admitting that outcome of the order of Hon’ble Uttarakhand High Court in the case of the assessee for AY 2010-11 would be binding. Thus, the consequential fate of the order of hon’ble high court also has the bearing on the present penalty proceedings u/s 271(1)(c) for AY 2013-14. Once the assessee has filed the undertaking u/s 158A of the Act, it is binding upon it to accept the judgement of the higher appellate forum and therefore, there is no reason to keep the present penalty proceedings alive.
In view of these facts, we find no error in the order of Ld.CIT(A) in deleting the penalty which may be survived in case the Hon’ble High Court decided the appeal against the assessee. Accordingly, all the Grounds of appeal raised by the Revenue are dismissed.
In the result, the appeal of the Revenue is dismissed. Order pronounced in the open Court on 12.03.2026.