Income Tax Penalty Matter Restored as Quantum Appeal Was Still Pending Before CIT(A)

ACIT Vs Basti Sugar Mills Co. Ltd. (ITAT Delhi)

The Revenue filed an appeal against the order of the Commissioner of Income Tax (Appeals)/NFAC dated 21.07.2025 for Assessment Year 2003-04, whereby the CIT(A) had deleted penalty imposed under Section 271(1)(c) of the Income Tax Act, 1961.

During the hearing, both parties submitted that the first appeal relating to the quantum assessment for the same assessment year was still pending adjudication before the CIT(A). Taking note of this submission, the ITAT Delhi set aside the order of the CIT(A) concerning the penalty proceedings.

The Tribunal restored the matter relating to penalty to the file of the CIT(A) with a direction to decide the penalty appeal along with, or after, disposal of the pending quantum appeal. Accordingly, the Revenue’s appeal was partly allowed for statistical purposes. The order was pronounced on 08 May 2026.

FULL TEXT OF THE ORDER OF ITAT DELHI

The present appeal is filed by the Revenue against the order of Ld. Commissioner of Income Tax (Appeals/ National Faceless Appeal Centre (‘Ld. CIT(A)/NFAC’ for short), New Delhi dated 21/07/2025 for the Assessment Year 2003-04, wherein the Ld. CIT(A) has deleted the order of penalty passed under Section 271(1)(c) of the Income Tax Act, 1961 (‘Act’ for short).

2. Both the parties submitted that the First Appeal challenging the quantum for the year under consideration is still pending adjudication by the Ld. CIT(A), which is yet to be decided by the Ld. CIT(A). Recording the submission of both the parties, we set aside the order of the Ld. CIT(A) and restore the First Appeal challenging the order of penalty to the file of the Ld. CIT(A) with a direction to decide the same alongwith or after deciding the quantum appeal pending before the Ld. CIT(A).

3. In the result, Appeal of the Revenue is partly allowed for statistical purpose.

Order pronounced in the open court on 08t^h May, 2026