Kirtikumar Haribhai Patel Vs ITO (ITAT Nagpur)
Consequential Penalty Must Await Outcome of Fresh Assessment- Nagpur ITAT Restores 270A Penalty – To Be Reconsidered After Fresh Assessment-Penalty Cannot Survive if Assessment Set Aside – Tribunal Sends Back Matter
Assessee filed appeal against order of CIT(A)/NFAC dated 25.03.2025 which had confirmed penalty of ₹11,79,772 levied u/s 270A. The penalty was imposed by AO consequent to an ex-parte assessment.
At hearing, Assessee pointed out that the very assessment order forming the basis of penalty had already been set aside by Tribunal in ITA No.44/Nag/2025 vide order dated 14.05.2025. In that order, Tribunal had restored the assessment proceedings to CIT(A) for de novo adjudication, observing that earlier order was ex-parte & violated principles of natural justice. Tribunal had also imposed cost of ₹5,000 payable to Maharashtra State Legal Services Authority as a deterrent against non-compliance.
Considering this, Tribunal held that once the assessment itself stood restored, the penalty u/s 270A, being consequential, also required reconsideration. It accordingly set aside the impugned order & restored penalty proceedings to the file of CIT(A) to be adjudicated afresh only after finalisation of assessment appeal, keeping all legal issues open.
Thus, the appeal of Assessee was allowed for statistical purposes.
