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IN THE INCOME TAX APPELLATE TRIBUNAL “G” BENCH, MUMBAI

BEFORE SHRI SAKTIJIT DEY, VICE PRESIDENT AND

SHRI ARUN KHODPIA, ACCOUNTANT MEMBER

ITA No. 7497/Mum/2025

(Assessment Year: 2018-19)

Zebra Networks Private Limited Income Tax Officer

Unit No.4, Peninsula Corporate Park, Assessment Unit,

Peninsula Chamber, G. K. Marg, Vs. Income Tax Department,

Mumbai-400 013 Mumbai – 400 020

PAN/GIR No. AABCI 6267 P

(Appellant) : (Respondent)

Appellant by : Shri Ketan L Vajani

Respondent by : Shri Swapnil Choudhary – Sr.AR

Date of Hearing : 28.01.2026

Date of Pronouncement : 28.01.2026

O R D E R

Per Saktijit Dey, Vice President:

This is an appeal by the assessee against order dated 19.09.2025, passed by National

Faceless Appeal Centre (‘NFAC’ for short), Delhi for the assessment year (A.Y. for short)

2018-19, confirming the penalty imposed of Rs.76,45,696/- u/s. 271AAC(1) of the Income

Tax Act, 1961 (‘the Act’ for short).

2. We have heard the parties and perused the materials on record. Briefly the facts are,

the assessee is a resident corporate entity. For the assessment year under dispute, the

assessee had filed its return of income on 30.10.2018, declaring loss of Rs.59,17,484/-. The

return of income so filed by the assessee was selected for scrutiny.

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ITA No. 7497/Mum/2025 (A.Y.2018-19)

Zebra Networks Private Limited vs. ITO

3. In course of assessment proceeding, the Assessing Officer (A.O. for short) called

for various details and after examining them completed the assessment u/s. 143(3) of the

Act, making the following additions:

a) Unexplained cash credit u/s. 68 of the Act – Rs.9,89,73,410/-

b) Disallowance of expenses of Rs.12,64,743/-

4. Contesting the additions, the assessee preferred an appeal before ld. First appellate

authority and being unsuccessful there, went in further appeal before the Income Tax

Appellate Tribunal.

5. During the pendency of assessee’s appeal, based on the additions made, the A.O.

initiated proceedings for imposition of penalty u/s. 271AAC(1) of the Act and ultimately

passed an order on 19.09.2025, imposing penalty of Rs.76,45,696/-. The penalty so

imposed by the A.O. was also confirmed by the first appellate authority.

6. Before us, ld. Counsel appearing for the assessee submitted that while deciding the

quantum appeal of the assessee, the Tribunal, in order dated 23.12.2025 passed in ITA No.

6469/Mum/2025, has set aside the issues relating to both the additions back to the A.O. for

fresh adjudication. Thus, he submitted, as on date there is no surviving addition to impose

penalty u/s. 271AAC(1) of the Act.

7. The ld. Departmental Representative (ld. DR for short) could not controvert the

aforesaid factual position.

8. Having considered rival submissions and perused the materials on record, we find

that the additions based on which the A.O. had imposed penalty u/s. 271AAC(1) of the

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ITA No. 7497/Mum/2025 (A.Y.2018-19)

Zebra Networks Private Limited vs. ITO

Act, in the meanwhile, have been set aside by the co-ordinate bench while deciding

assessee’s appeal in quantum proceeding with a direction to the A.O. to decide the issues

afresh after providing due and reasonable opportunity of being heard to the assessee. Thus,

by virtue of such decision of the co-ordinate bench, there is no surviving addition on which

the penalty-imposed u/s. 271AAC(1) of the Act can be sustained. That being the factual

position on record, we are inclined to set aside the impugned orders passed by the A.O. and

the first appellate authority and restore the issue relating to the imposition of penalty to the

A.O. It will be open to the A.O. to initiate proceedings u/s. 271AAC(1) of the Act afresh,

if warranted, depending upon the outcome of the fresh assessment.

9. In the result, the appeal is allowed for statistical purpose.

Order pronounced in the open court on 28.01.2026

Sd/- Sd/-

(Arun Khodpia) (Saktijit Dey)

Accountant Member Vice President

Mumbai; Dated : 28.01.2026

Roshani, Sr. PS

Copy of the Order forwarded to :

1. The Appellant

2. The Respondent

3. The CIT(A)

4. C