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IN THE INCOME TAX APPELLATE TRIBUNAL

“D” BENCH MUMBAI

BEFORE SHRI AMIT SHUKLA, JUDICIAL MEMBER &

SHRI MAKARAND VASANT MAHADEOKAR, ACCOUNTANT MEMBER

ITA No. 9393/Mum/2025

(Assessment Year: 2016-17)

DCIT CIR 42(1)(1) Ravindar Shankar

Room No. 732, Kautilya Sawant,

Bhavan, 7^th Floor, BKC, Vs. A 101, Radha Raman

Bandra (East), Mumbai Apartment,

– 400 051 Kandapara Dahisar

West, Mumbai –

400 068

PAN/GIR No. AMNPS4817Q

(Applicant) (Respondent)

Revenue by Shri Annavaram Kosuri, Ld. DR

Assessee by None

Date of Hearing 08.04.2026

Date of Pronouncement 21.04.2026

आदेश / ORDER

PER MAKARAND VASANT MAHADEOKAR, AM:

This appeal is filed by the Revenue against the order dated

24.10.2025 passed by the Commissioner of Income Tax (Appeals),

National Faceless Appeal Centre, Delhi [hereinafter referred to as

"CIT(A)"].

2. The assessee is an individual. The return of income for A.Y.

2016–17 was filed on 31.03.2017 declaring total income of Rs.

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Ravindar Shankar Sawant

2,95,35,030/-. The case was selected for scrutiny and

assessment was completed under section 143(3) of the Income

Tax Act, 1961 determining total income at Rs. 4,71,79,030/- after

making additions of Rs. 1,59,50,000/- under section 68 and Rs.

16,94,000/- under section 69C of the Act. Subsequently, penalty

proceedings were initiated and penalty order under section

271(1)(c) of the Act was passed on 06.03.2025 levying penalty of

Rs. 61,06,236/-.

3. Aggrieved, the assessee filed appeal before the CIT(A). The

CIT(A) passed order under section 250 dated 24.10.2025 deleting

the penalty. The CIT(A) noted that the additions made in the

assessment order under sections 68 and 69C, forming the basis

of penalty, had already been deleted by the Tribunal in quantum

proceedings. It was observed that once the quantum addition

does not survive, the penalty levied under section 271(1)(c)

cannot be sustained.

4. The relevant finding of the CIT(A) reads as under:

“Since the quantum appeal filed by the appellant before the Hon’ble

Income Tax Appellate Tribunal (ITAT), Mumbai has been decided in

favour of the appellant, the very basis of the penalty imposed by the

Assessing Officer does not survive. Consequently, the penalty order

passed under section 271(1)(c) of the Income-tax Act, 1961 becomes

infructuous and non-est.”

5. Aggrieved by the order of CIT(A),the Revenue is in appeal

before us raising following grounds of appeal:

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Ravindar Shankar Sawant

1. On the facts and circumstances of the case and in law, the Ld. CIT(A)

is erred in deleting the penalty of Rs. 61,06,236/- levied u/s

271(1)(c) of the I.T. Act, 1961 for concealing the particulars of income.

2. The appellant craves leave to amend or alter or add a new ground

which may be necessary.

6. At the time of hearing, none appeared on behalf of the

assessee. However, the learned Departmental Representative

fairly conceded that the quantum addition, on the basis of which

penalty under section 271(1)(c) was levied, has already been

deleted by the Co-ordinate Bench.

7. We have considered the material available on record and the

submissions of the learned Departmental Representative.

8. It is an admitted position that the penalty under section

271(1)(c) was levied with reference to additions made under

sections 68 and 69C of the Act in the assessment completed

under section 143(3).

9. It is further an undisputed fact, as recorded by the CIT(A),

that the Co-ordinate Bench in quantum proceedings has deleted

the additions forming the very basis of penalty vide order dated

30.12.2024 in ITA No. 1849/Mum/2024.

10. In such circumstances, the settled legal position is that

when the quantum addition itself is deleted, the penalty imposed

under section 271(1)(c) cannot survive. The penalty being

incidental to the quantum addition, its foundation having been

removed, the superstructure must necessarily fall.

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Ravindar Shankar Sawant

11. The learned Departmental Representative has also fairly

conceded this factual position.

12. According