Anshu Priyadarshini Vs ITO (ITAT Delhi)
When Assessment Falls, Penalty Can’t Stand: ITAT Delhi Quashes 271(1)(c) Penalty After De-novo Remand
The Delhi ITAT “SMC” Bench, comprising Shri Vikas Awasthy (Judicial Member), allowed the appeal of Anshu Priyadarshini for AY 2011-12 and set aside the penalty levied u/s 271(1)(c), holding that the penalty proceedings could not survive once the underlying assessment was restored for de-novo adjudication
The penalty had been levied on additions made in the assessment order dated 15.12.2018 passed u/s 144/147. However, the Tribunal had earlier, in the Assessee’s quantum appeal (ITA No.1576/Del/2024, order dated 14.08.2024), set aside the assessment order and remanded the matter to the AO for fresh assessment.
The ITAT held that since the substratum for levy of penalty had been erased, the consequential penalty could not stand independently. Once the very basis of the additions is unsettled and the assessment is open for re-examination, penalty proceedings become infructuous.
The Revenue fairly conceded the legal position. Accordingly, the Tribunal quashed the impugned penalty order and allowed the appeal of the Assessee.
FULL TEXT OF THE ORDER OF ITAT DELHI
This appeal by the assessee is directed against the order of Commissions of Income Tax-(Appeals) (hereinafter referred to as ‘the CIT(A)’) dated 18.09.2025 confirming penalty levied u/s.271(1)(C) of the Income Tax Act, 1961(hereinafter referred to as ‘the Act’), for AY 2011-12.
