Section 271(1)(c) Penalty Deleted Due to Consistency with Earlier Year Ruling: ITAT Dehradun

DCIT Vs State Infrastructure & Industrial Development Corporation of Uttarakhand Ltd. (ITAT Dehradun)

The appeal was filed by the Revenue against the order dated 22.09.2025 passed by the Commissioner of Income Tax (Appeals), NFAC, for Assessment Year 2014–15, arising from an assessment completed under section 143(3) of the Income Tax Act, 1961.

The issue in dispute concerned the levy of penalty under section 271(1)(c) for alleged furnishing of inaccurate particulars of income. The assessee had initially claimed deduction under section 80IA but later suo motu withdrew the inadvertent excess claim. Despite this, the Assessing Officer levied a penalty of ₹1,95,90,100, which included amounts relating to excess deduction under section 80IA and disallowed expenses under section 40A(ia).

During appellate proceedings, the Commissioner (Appeals) noted that in the assessee’s own case for Assessment Year 2011–12, under identical facts and circumstances, a similar penalty had been deleted. Relying on that earlier decision and relevant case laws, the Commissioner (Appeals) deleted the penalty in the present year as well.

The Tribunal observed that the facts of the case for the year under appeal were identical to those in the earlier year. It further noted that the Revenue had not controverted this position. Applying the principle of consistency, the Tribunal held that the Commissioner (Appeals) was justified in following the earlier decision and deleting the penalty.

Accordingly, the Tribunal confirmed the order of the Commissioner (Appeals) and upheld the deletion of penalty under section 271(1)(c). The appeal filed by the Revenue was dismissed.

Assessee was represented by Shri Sahil Kala, CA

FULL TEXT OF THE ORDER OF ITAT DEHRADUN

The present appeal is filed by Revenue against the order dated 22.09.2025 passed by Ld. Commissioner of Income Tax (A), NFAC, Delhi [“Ld. CIT(A)”] u/s 250 of the Income Tax Act, 1961 [“the Act”] arising out of assessment order dated 19.12.2016 passed u/s 143(3) of the Act pertaining to Assessment Year 2014-15.

2. Heard both the parties at length. The claim of the assessee was that it had suo-motto withdrew the inadvertent amount of deduction claimed u/s 80IA of the Act however, the AO has levied the penalty u/s 271(1)(c) of the Act by AO which was confirmed by Ld. CIT(A).

3. CIT (A) by observing that under identical circumstances, penalty levied for AY 2011-12 was deleted by his predecessor. Since the Ld. CIT(A) has followed the order for AY 2011-12 wherein penalty levied under identical circumstances, was deleted which facts has not been controverted by the Revenue. The relevant observation of ld. CIT(A) while deleting the penalty are reproduced as under:-

6. DECISION:

6.1 “The impugned made in the case of the appellant by an order of regular assessment passed on the basis of quantum addition 19.12.2016. This order of quantum addition was passed u/s 143(3). During the appellate proceeding in the appeal filed against this order of quantum addition, the CIT(A), Dehradun vide its order DIN & Order: Appeal No. 10577/CIT(A)/DDN/2016-17 dated 26.04.2017 has confirm the addition made by AO in assessment order and partly allowed the appeal of the assessee.

6.2 AO levied penalty u/s 271(1)(c) for concealment of income on part of the assessee for a sum of Rs.5,76,34,588/- (Rs. 5,74,49,588/-excess claimed u/s 801A and Rs. 1,85,000/-expenses) minimum penalty @100% tax of amount Rs. 1,95,90,100/- was levied in this case. In this case AO has levied penalty for furnishing Inaccurate particulars of income u/s 271(1)(c) regarding excess claim of Rs.5,74,49,588/- u/s 80IA and Rs. 1,85,000/- as expenses disallowed u/s 40A(ia). In the identical set of facts CIT(A), Dehradun in assessee’s own case for assessment year 2011-12 has deleted penalty u/s 271(1)(c). In light of the case laws cited by the assessee, findings of CIT(A) for assessment year 2011-12 and the case laws cited by the assessee, penalty of Rs.1,95,90,100/- levied u/s 271(1)(c) is deleted.”

4. In the light of aforesaid facts and considering the fact that the issue is identical in the year under appeal thus, by following the principal of consistency, penalty levied in the year under appeal u/s 271(1) of the Act is rightly deleted by ld. CIT(A) which order is hereby confirmed.

5. In the result, the appeal of the Revenue is dismissed.

Order pronounced in the open Court on 10.03.2026.