Dinesh Kumar vs Deputy Commissioner

PER ANUBHAV SHARMA, JUDICIAL MEMBER:

This appeal is preferred by the assessee against the order dated 28.10.2025 of the Ld. Commissioner of Income Tax (A)-43, Delhi (hereinafter referred to as the First Appellate Authority or ‘the ld. FAA’ for short) in DIN & Order No: ITBA/APL/S/250/2025-26/1082044910(1) arising out of the penalty order dated 26.09.2024 u/s 271(1)(c) of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) passed by Circle, International Tax 2(1)(2), for AY: 2016-17.

On hearing both sides we find that the appeal of the assesse has been dismissed on the basis that Form 35 has not been filed by the assesse at all and being defective the appeal was dismissed.

However, before us ld. Counsel has placed on record at page No. 37 the screen shot of submission of evidences before ld. CIT(A) and at page No. 41-46 the copy of Form 35 has also been filed bearing acknowledgment number. We find that in the impugned order the grounds of appeal of the assesse have been incorporated which certainly would have been on record of ld. CIT(A) if Form 35 was there. Then, in para 4 submissions of assesse in response to a notice u/s 250 have been reproduced. Thus, it appears that out of some misconstruing of facts, a conclusion was drawn that Form 35 has not been filed leading to dismissal of the appeal as defective.

However, what is material in this case is that at page No. 2-4 copy of assessment order dated 11.03.2024 is on record which shows that assessee’s case was reopened by notice u/s 148 in response to which assesse had filed a return of income declaring total income of Rs.6,12,570/- and which was accepted and no addition was made. The penalty proceedings has been initiated on the basis that assesse had not filed original ITR even after having taxable income above basic exemption limit, thus there is a concealment of income and thus, it was found to be fit case for initiation of penalty proceedings u/s 271(1)(c) of the Act. At page 38 of the paper book the copy of impugned order is available.

We find that the case was reopened on the basis that there was sale of some immovable property for which TDS was deducted and assesse has reported long term capital gain of Rs.5,56,098/- and income from other sources of Rs.66,471/-. However, there was no tax liability left after the TDS rather the computation sheet available at page No. 5-7 shows the total taxes of Rs.1,72,251/- stood paid against aggregate tax liability of Rs.1,72,258/- and there was amount payable/refundable of Rs. 7/- only.

Though, ld. DR has submitted that Tribunal has been consistently giving relief to assesses, on technical ground, however, in the present facts and circumstances we find that levy of penalty was not justified and ld. CIT(A) has dismissed the appeal of the assesse erroneously by observing there is Form 35. Thus, no purpose would be served by sending the appeal back to ld. CIT(A) when we have sufficiently examined the issue and not inclined to sustain penalty.

Thus the appeal is allowed and the penalty is quashed.

Order pronounced in the open court on 05.08.2026