The amended limitation period under Section 275(1) of the Income Tax Act cannot apply to pending penalty proceedings if the limitation period had already expired prior to the amendment's effective date of April 1, 2025; such cases remain governed by the un-amended provisions.

O R D E R

PER VIKRAM SINGH YADAV, A.M :

This is an appeal filed by the assessee against the order of the Learned Commissioner of Income Tax (Appeals)-National Faceless Appeal Centre (NFAC), Delhi [„Ld.CIT(A)‟], dated 10-09-2025, pertaining to Assessment Year (AY) 2017-18.

Briefly, the facts of the case are that the assessment in this case was completed u/s.144 of the Income Tax Act, 1961 („the Act‟), vide order dt. 07-12-2019, wherein the assessed income was determined at Rs. 1,86,27,270/-, wherein the AO has disallowed the claim of deduction u/s. 57 of the Act amounting to Rs. 1,42,55,352/-, income claimed exempt amounting to Rs. 35,55,110/- was brought to tax and deduction claimed u/s. 80C of the Act of Rs. 1,15,000/- was disallowed for want of necessary submissions/documentary evidences. Separately, penalty proceedings were initiated u/s. 270A of the Act for under reporting of income. The assessee thereafter carried the matter in appeal before the Ld.CIT(A), who has sustained the order and the findings of the AO vide his order dt. 20-09-2024.

In absence of anything further appeal filed by the assessee, persuant to the order passed by the Ld.CIT(A), a fresh show cause u/s 270A was issued dt. 04-06-2025 which was not responded to by the assessee. Thereafter, a letter dt. 11-06-2025 was issued which also remain non-complied with and the matter was thereafter referred to verification unit for physical service of notice and pursuant thereto, the AO passed the penalty order u/s. 270A of the Act, dt. 25-06-2025, stating that it is a fit case to levy penalty u/s. 270A of the Act as the assessee has not adduced any reasonable cause of default and, therefore, he is satisfied to levy penalty u/s. 270A of the Act for under reporting of income and penalty @50% on the tax determined on the assessed income was levied on the assessee amounting to Rs. 39,47,463/-, after seeking prior approval of the Addl.CIT u/s. 274(2) of the Act.

The assessee thereafter carried the matter in appeal before the Ld.CIT(A), who has confirmed the levy of penalty and the order of the AO stating that the contention of the assessee raised in the statement of facts and the grounds of appeal are not supported by any documentary or legal evidences/explanation and hence did not find any merit. It is for the assessee to submit a detailed explanation so as to contradict the findings in the assessment order and penalty order, which he has failed to do so and accordingly penalty amounting to Rs. 39,47,463/- was confirmed.

Against the said order, the assessee has filed an appeal before us and has raised multiple grounds of appeal. Further, vide application dt. 12-01-2026, the assessee also sought permission to raise following additional grounds of appeal:

“1. The CIT(A) ought to have held that the penalty order passed by the Assessing Officer as well as the approval granted by the Additional Commissioner u/s. 274(2) of the Act are without application of mind and hence invalid and non-est.”

Further, vide another application dt. 13-01-2026, the assessee requested for addition of another additional grounds of appeal, which reads as under:

“1. The Ld. CIT(A) ought to have held that the penalty order passed by the Assessing officer dated 25.06.2025 is time barred and non-est.

2. The Ld. CIT(A) ought to have appreciated that since appeal against the assessment order was dismissed by Faceless CIT(A) vide his order dated 20.09.2024 and since no appeal was filed against the said order, the penalty order ought to have been passed on or before 31.03.2025 being six months from the end of the quarter in which the order of the Faceless CIT(A) has been received by NFAC.”

During the course of hearing, the arguments of the Ld.AR were directed in respect of additional grounds of appeal, wherein the assessee has challenged the penalty order passed by the AO as barred by limitation. It was submitted that these are purely legal grounds of appeal and all relevant facts are on record and the as