Nidhiben Mrugeshkumar Shah Vs ACIT (ITAT Ahmedabad)
Penalty u/s 271(1)(c) Cannot Survive When Quantum Addition is Remanded – Matter Restored to CIT(A)
Penalty u/s 271(1)(c) was levied on addition of ₹10,00,100 as unexplained cash deposits, & minimum penalty of ₹1,55,561 was confirmed by CIT(A).
Before ITAT, Assessee submitted that the quantum addition itself had been remanded back by ITAT in ITA No. 990/Ahd/2025 (order dated 24.09.2025) because the lower authorities did not properly consider evidence explaining the source of cash. ITAT had directed CIT(A) to re-examine all evidence, obtain AO’s remand report, & pass a speaking order after due opportunity. Since the very basis of penalty (the addition) was unsettled & restored to CIT(A), Assessee argued that the penalty cannot survive at this stage. Department fairly agreed.
Tribunal held that when the quantum is set aside for fresh adjudication, the penalty cannot be sustained independently. Accordingly, the penalty order was also restored to CIT(A) to be decided along with the quantum appeal.
FULL TEXT OF THE ORDER OF ITAT AHMEDABAD
The present appeal has been filed by the assessee against the order of the Ld. Commissioner of Income Tax (Appeals), (hereinafter referred to as “CIT(A)”), National Faceless Appeal Centre (hereinafter referred to as “NFAC”), Delhi dated 18.06.2025 confirming the levy of penalty for concealing particulars of income / furnishing inaccurate particulars of income, levied under Section 271(1)(c) of the Income Tax Act, 1961 (hereinafter referred to as the “Act”) and relates to Assessment Year (A.Y.) 2011-12.
