Loading judgment…
Facts
The assessee, B.R. Morden School Samiti, challenged a penalty levied under Section 271B for Assessment Year 2017-18. The Ld. CIT(A) had upheld the penalty. The assessee's quantum appeal for the same assessment year had previously been restored to the AO for a de novo assessment by the Tribunal.
Held
The Tribunal held that since the quantum appeal, which formed the basis for the penalty, had been restored for de novo assessment, the penalty proceedings under Section 271B had no legal standing. Consequently, the penalty was deleted, with the AO retaining the liberty to initiate fresh proceedings if warranted by the de novo assessment.
Key Issues
The key legal issue was whether a penalty under Section 271B could be sustained when the underlying quantum assessment, on which the penalty was based, had been set aside and restored for a de novo assessment.
Sections Cited
Section 271B, Section 250
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, DEHRADUN “”DB” BENCH: DEHRADUN
Before: SHRI MAHAVIR SINGH & SHRI MANISH AGARWAL
Year : 2017-18] B.R. Morden School Samiti vs ITO Tara Lodge, Exemption, Ward Tehsil Road Pauri, Pauri, Dehradun Uttarakhand-246001. PAN-AACAB6988M APPELLANT RESPONDENT Appellant by Shri Rajiv Sahni, CA Respondent by Shri Amar Pal Singh, Sr.DR Date of Hearing 10.03.2026 Date of Pronouncement 12.03.2026 ORDER
PER MANISH AGARWAL, AM :
The present appeal is filed by assessee against the order dated 05.12.2025 passed by Ld. Commissioner of Income Tax (A), NFAC, Delhi [“Ld. CIT(A)”] u/s 250 of the Income Tax Act, 1961 [“the Act”] against the penalty order dated 21.09.2022 passed u/s 271B of the Act pertaining to Assessment Year 2017-18.
Heard the contentions of both parties and perused the material available on record. It is stated by Ld. AR that the quantum appeal filed by the assessee for the captioned assessment year against the assessment order passed has already been restored to the file of AO by the Tribunal for passing for denovo assessment. Thus, the current penalty proceedings initiated in the said order has no legs to stand. Page | 1 Accordingly, we delete the penalty so levied. The AO is at liberty to initiate the proceedings, if the circumstances suggests so, in the set aside proceedings in accordance with law. With these directions, appeal filed by the assessee is allowed.
In the result, the appeal of the assessee is allowed. Order pronounced in the open Court on 12.03.2026.