Case Law Details
ITO Vs Dipali Singha Roy (ITAT Kolkata)
The Revenue appealed against the order dated 30.04.2025 passed by the Commissioner of Income Tax (Appeals), NFAC, Delhi, relating to penalty proceedings under Section 270A of the Income Tax Act, 1961. The Assessing Officer (AO) had levied penalty through an ex parte order dated 12.06.2023. Although the assessee did not comply with notices issued during both the assessment and appellate proceedings, the CIT(A) partly allowed relief by deleting a penalty of Rs. 73,47,400 while confirming a penalty of Rs. 4,66,462.
The Revenue challenged the deletion of the penalty relating to alleged under-reporting and misreporting of income of Rs. 1 crore received as prize money from the Sikkim State Lottery. It also contested the CIT(A)’s treatment of the prize money as turnover despite non-compliance by the assessee and rejection of books of account under Section 145(3).
Before the Tribunal, the assessee submitted that she became aware of the assessment order at a later stage and had subsequently filed an appeal in the quantum proceedings. A notice issued by the CIT(A), NFAC in the quantum appeal was produced to show that the quantum matter was pending.
The ITAT observed that the quantum appeal was still pending before the CIT(A). Accordingly, it set aside the impugned order and remanded the penalty issue to the CIT(A) for fresh adjudication along with the quantum appeal. The Revenue’s appeal was partly allowed for statistical purposes.
FULL TEXT OF THE ORDER OF ITAT KOLKATA
1. This appeal arises from order u/s 250 of the Income Tax Act, 1961 (hereafter “the Act”), dated 30.04.2025, passed by the Ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi [hereafter “the Ld. CIT(A)”].
1.1 In this case, the penalty under Section 270A of the Act has been levied by the AO vide his order dated 12.06.2023. It is pertinent to note that the said order has been passed in an exparte manner as has been clearly mentioned on page 2 of the Ld. AO’s order. Thereafter, this matter travelled up to the Ld. CIT(A) where also, as per the noting in paragraph 3 at page 2 of the impugned order, the assessee never complied to any of the notices issued from the Ld. CIT(A)’s office. However, the assessee could succeed in part and only a penalty of Rs. 4,66,462/- was confirmed and the other penalty of Rs. 73,47,400/- was deleted.
1. 2 Aggrieved with this action, the Revenue has approached the ITAT with the two grounds as under:
“1. The Ld. CIT(A), NFAC Delhi has erred in deleting the penalty amount of Rs.73,47,400/-which is the 200% of the Tax Amount of Rs.36,73,700/- derived from the under reporting of income which is also consequent of mis-reporting of Rs.1,00,00,000/- (received as prize money from Sikkim State Lottery and the same has not been offered for tax under the head of Income from the other sources.
2. The Ld. CIT(A), NFAC Delhi has erred to treat the prize money of Rs.1,00,00,000/- as turnover i.e. the turnover of the assessee while the assessee remain non-compliance throughout the assessment proceedings never complied to any notice of the FAO and also when the FAO has rejected the books of account of the assessee as per the provision of the section 145(3) of the I. T. Act, 1961.”
2. Before us, the Ld. DR pointed out the finding in paragraph 2 of the assessment order dated 26.12.2022 and the relevant portion from the Ld. AO’s order under Section 270A of the Act (dated 12.06.2023). It was the submission that the Ld. AO’s order in levying penalty should be confirmed.
2.1 The Ld. AR made a statement at the Bar and filed a notice issued by CIT(A), NFAC in the quantum matter for this very same assessment year. It was the submission that the assessee was made aware of the assessment order at a much later stage and thereafter has filed an appeal in the quantum matter before the Ld. CIT(A). As evidence of this the notice fixing the date of hearing issued by the Ld. CIT(A), NFAC was placed on record for our perusal. It was the submission that the quantum matter is pending and hence there is no reason why the penalty matter should continue to be heard by the ITAT.
3. We have carefully considered the rival submissions and have gone through the records before us. It is obvious that the quantum matter is pending as of now at first appeal stage and hence the impugned order is set aside and this issue is remanded back to the file of Ld. CIT(A) for fresh adjudication, along with quantum matter. Needless to say, depending on the fate in the quantum matter, this penalty would either survive or fall as per the outcome thereon.
4. In result, appeal of the Revenue is partly allowed for statistical purposes.
Order pronounced on 27.11.2025
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