Shiv Arora Vs ITO (ITAT Delhi)
Penalty Dies with Quantum – ITAT Delhi Deletes 271AAC Levy – When Assessment Goes, Penalty Goes Too – ITAT Delhi Follows Settled Law
Assessee’s assessment was completed ex-parte u/s 144 on 23.04.2024, & a penalty of ₹18.01 lakh was later imposed u/s 271AAC(1). The appeal before CIT(A) was delayed by about ten months & was dismissed on grounds of limitation.
Tribunal held that CIT(A) erred in refusing to condone the delay, since sufficient cause was shown, & more importantly, the quantum order was already annulled by CIT(A) on 19.02.2025 with directions for de-novo assessment. Once the foundation (assessment) is removed, the penalty automatically falls, being consequential in nature.
Accordingly, Tribunal condoned the delay, quashed the penalty order, & clarified that the AO may initiate fresh proceedings, if warranted, after the new assessment. The appeal was allowed in full
FULL TEXT OF THE ORDER OF ITAT DELHI
The present appeal is filed by the Assessee against the order of Ld. Commissioner of Income Tax (Appeals/ National Faceless Appeal Centre (‘Ld. CIT(A)/NFAC’ for short), New Delhi dated 21/03/2025 for the Assessment Year 2018-19.
2. Brief facts of the case are that, an ex-parte assessment order came to be passed on 23/04/2024 u/s 144 of the Income Tax Act, 1961 (‘Act’ for short). Consequent to the additions made thereon, a penalty proceedings has been initiated against the Assessee and an order of penalty came to be passed on 18/01/2022 under Section 271AAC (1) of the Act. Aggrieved by the order of penalty dated 18/01/2022, the Assessee preferred an Appeal before the Ld. CIT(A) with a delay of nearly 10 months in filing the First Appeal. The Ld. CIT(A) vide order dated 21/03/2025, dismissed the Appeal of the Assessee for delay in latches. As against the order of the Ld. CIT(A) dated 21/03/2025, the Assessee preferred the present Appeal.
