Anil Kumar Paik Vs ACIT (ITAT Kolkata)
Kolkata ITAT Deletes Penalty under Section 271(1)(c) After Quantum Additions Were Fully Deleted
The Kolkata ITAT deleted the penalty of ₹2.61 crore levied under section 271(1)(c) after observing that the very foundation for the penalty had ceased to exist. The Tribunal noted that the original assessment had resulted in substantial additions, which were subsequently challenged before the Tribunal. While an earlier order had restored one issue relating to property valuation to the Assessing Officer, the Tribunal, in a subsequent quantum appeal, deleted the surviving addition as well, leaving no addition outstanding against the assessee. Since the penalty proceedings were entirely based on additions that no longer survived, the Tribunal held that the penalty had no legs to stand on and was liable to be deleted. Accordingly, the penalty under section 271(1)(c) was quashed in its entirety.
Cases Discussed
- Anil Kumar Paik Vs ACIT (ITAT Kolkata), ITA No. 1178/Kol/2026, order dated 16.07.2026
- Anil Kumar Paik Vs ACIT (ITAT Kolkata), ITA No. 468/KOL/2023, order dated 29.11.2023
FULL TEXT OF THE ORDER OF ITAT KOLKATA
This is an appeal preferred by the assessee against the order of the National Faceless Appeal Centre, Delhi (hereinafter referred to as the “Ld. CIT(A)”] dated 08.01.2026 for the AY 2016-17. The penalty was levied by the Id. AO u/s 271(1)(c) , vide order dated 28.03.2024 for A.Y. 2016-17.
2. The only issue raised by the assessee in this appeal is against the order of Id. CIT (A) upholding the penalty order passed by the Id. AO u/s 274 read with section 271(1)(c) of the Act wherein the AO levied a penalty of 12,61,13,478/-.
3. The facts in brief are that the assessee is an individual and is engaged in the business of property , trading in medicine, liquor, pathology lab and also having rental income. During the year, the assessee filed the return of income on 27.12.2018, showing income at 11,62,82,230/-. The case of the assessee was selected for scrutiny and assessment was accordingly framed u/s 143(3) of the Act vide order dated 27.12.2018 assessing the total income at 19,17,53,930/-. Thereafter, the matter reached to Tribunal and the Tribunal restored the matter back to the file of the Id. AO only in respect of addition of 18,99,780/- and other additions were deleted. The Id. AO accordingly made the addition which were confirmed by the Id. CIT (A) in the appellate proceedings.
4. The Id. Counsel for the assessee submitted before the Bench that this Tribunal in the quantum appeal deleted the addition in ITA No. 1178/Kol/2026 vide order dated 16.07.2026 and therefore the basic premise of the Id. AO for levying penalty is demolished. Therefore, the penalty appeal may also be quashed as the additions in the quantum appeal were deleted completely.
5. The Id. DR on the other hand did not oppose the argument of the Id. AR.
50 After hearing the rival contentions and perusing the materials available on record, we find that the appeal consequent to assessment order dated 27.12.2018 and the co-ordinate Bench has deleted the addition partly vide order dated 29.11.2023 in ITA No. 468/KOL/2023 and restoring the issue partly to the AO so far as the valuation of property. Now tribunal again deleted that addition in ITA No. 1178/Kol/2026 vide order dated 16.07.2026. Therefore, as on date the additions are not surviving at all. This the very basis of which the impugned penalties levied u/s 271(1)(c) of the Act, has now no legs to stand over, therefore, the impugned penalty is hereby deleted.
7. In the result, the appeal of the assessee is allowed.
Order pronounced on 24.07.2026.
