JCIT [OSD] Vs IGT Solution Pvt Ltd (ITAT Delhi)
Foundation is removed, the Superstructure cannot Survive- Section 270A Levy Has No Legs: ITAT Delhi Deletes Penalty After Quantum Addition Is Wiped Out
ITAT Delhi held that a Section 270A penalty cannot survive once the underlying quantum addition is deleted. Applying the principle sublato fundamento cadit opus, the Tribunal ruled that penalties have no independent existence and must fall when the foundational tax adjustment is annulled. With the AY 2017-18 addition removed, the associated penalty was automatically deleted, leading to dismissal of the Revenue’s appeal.
This Revenue appeal concerned penalty levied u/s 270A on IGT Solution Pvt Ltd. At the hearing, the Assessee submitted that the entire quantum addition for AY 2017-18 had already been deleted by the Delhi ITAT in ITA No.2126/DEL/2025 dated 30.10.2025. The Departmental Representative fairly conceded this fact.
The Tribunal held that once the foundation (quantum addition) is removed, the superstructure (penalty) cannot survive—applying the legal maxim “Sublato fundamento cadit opus.” Since the addition no longer existed, the penalty u/s 270A automatically fell. The ITAT therefore deleted the penalty and dismissed the Revenue’s appeal.
FULL TEXT OF THE ORDER OF ITAT DELHI
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].
