Nalli Trust Vs DCIT (ITAT Chennai)
The Chennai Bench of the Income Tax Appellate Tribunal (ITAT) disposed of five appeals filed by the assessees against separate orders of the Commissioner of Income Tax (Appeals), all dated 19.08.2025, confirming penalties levied under Section 270A of the Income Tax Act, 1961 for Assessment Years 2017-18 to 2021-22. The Tribunal first condoned a 90-day delay in filing the appeals after accepting the assessees’ explanation that they were under a bona fide belief that separate appeals against the penalty orders were unnecessary since quantum assessment appeals had already been filed. Upon receiving legal advice that independent appeals were required, the assessees promptly filed the appeals.
Appeals for Assessment Years 2017-18 to 2020-21
The assessees submitted that the Tribunal, by order dated 17.03.2026 in ITA Nos.3072 to 3075/CHNY/2025, had already quashed the corresponding quantum assessments. Since the penalties under Section 270A were levied solely on the basis of additions made in those assessments, the penalties could not survive once the assessments themselves had been quashed.
After considering the submissions, the Tribunal observed that the penalties were entirely founded upon the additions made in the quantum assessments. As the Tribunal had already quashed those assessments on legal grounds, the foundation for the penalties ceased to exist. Accordingly, the Tribunal set aside the orders confirming the penalties and deleted the penalties levied under Section 270A for Assessment Years 2017-18 to 2020-21.
