Maharashtra State Electricity Transmission Company Limited Vs Assessment Unit & Ors. (Bombay High Court)
The Bombay High Court considered a writ petition filed by the petitioner challenging an order dated 26 September 2025 passed under Section 271(1)(c) of the Income Tax Act, 1961, by which a penalty of approximately ₹101 crores was imposed. The petitioner contended that the penalty order was illegal and premature because the underlying quantum assessment had already been appealed before the Income Tax Appellate Tribunal (ITAT), and the appeal was still pending. It was argued that once an appeal against the assessment order was filed before the ITAT, the penalty proceedings ought to have been kept in abeyance until the appeal was decided.
In support of this argument, the petitioner relied on Section 275(1)(a) of the Income Tax Act, as it stood prior to its amendment on 1 April 2025. The petitioner also referred to the Bombay High Court’s earlier decision in B. Shreeram Durgaprasad v. Commissioner of Income-tax, which held that a penalty order cannot be passed while an appeal against the assessment order is pending before a superior authority. The petitioner submitted that the penalty order deserved to be set aside and the matter remanded to the Assessing Officer with directions to keep the penalty proceedings in abeyance until the ITAT decided the pending quantum appeal.
