Delhi HC Quashes Section 270A Penalty After ITAT Sets Aside Assessment Order

Mixpanel INC Vs DCIT (Delhi High Court)

The Delhi High Court considered writ petitions challenging an order dated 31.03.2026 imposing a penalty of Rs. 9,30,24,492 under Section 270A of the Income-tax Act, 1961 for alleged misreporting of income. The petitioner contended that the penalty arose from an assessment order dated 27.01.2025, which had already been set aside by the Income Tax Appellate Tribunal by its order dated 21.05.2025, including the adjustment relating to fee for technical services. It was submitted that the petitioner had informed the Assessing Officer of the Tribunal’s order during the penalty proceedings and requested that the proceedings be dropped, but the request was not accepted.

The Revenue objected to the maintainability of the writ petition on the ground that the petitioner had an appellate remedy before the Commissioner of Income Tax (Appeals). It was further submitted that, when the penalty order was passed, the Department was in the process of filing an appeal against the Tribunal’s order and the Assessing Officer was justified in proceeding with the penalty in anticipation of obtaining a stay.

The petitioner, in rejoinder, submitted that although the Department had filed an appeal, no interim order had been passed and no stay application had been moved.