Ketan Priyavadan Shah Vs ITO (ITAT Ahmedabad)
In the case before the Tribunal, Assessee had challenged a penalty levied u/s 270A, following what was alleged as “under-reporting of income” for assessment year 2020-21. The penalty order was confirmed by CIT(A) (NFAC) on 30 June 2025, amounting to ₹ 13,86,849. AO had initiated penalty proceedings and imposed the penalty based on the quantum of income determined in the assessment.
However, when the matter came before the Tribunal, it was noticed that the quantum appeal (ITA No. 734/Ahd/2025) for the same assessment year had already been restored to the file of the CIT(A) by an earlier order dated 14 August 2025. That earlier order directed the CIT(A) to decide the quantum matter de novo, giving the assessee a fresh opportunity of hearing, after condoning a delay of 114 days.
Since the penalty u/s 270A is directly connected and consequential to the quantum of income as assessed, the Tribunal observed that the penalty could not validly stand independently while the quantum issue remained sub judice. In view of this, the Tribunal held that the penalty proceedings must also be remitted to the CIT(A) for reconsideration, to be taken up along with the quantum appeal. The CIT(A) is to re-adjudicate afresh both the quantum and the penalty in accordance with law.
In effect, the Tribunal allowed the appeal for “statistical purposes,” meaning the case is sent back to ensure proper adjudication, but without deciding on the merits of the penalty until the quantum is finalized.
