Karmic Energy Pvt. Ltd. vs ITO, Ward 14(2)

PER ANUBHAV SHARMA, JM:

This appeal is preferred by the assessee against the order dated 04.02.2026 of the Ld. National Faceless Appeal Centre (NFAC) Delhi (hereinafter referred as Ld. First Appellate Authority or in short Ld. ‘FAA’) in DIN & Order No: ITBA/NFAC/S/250/2025-26/1085580449(1) arising out of the assessment order dated 25.06.2019 u/s 271(1)(c) of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) passed by ITO, Ward 14(2) for AY: 2016-17.

Heard and perused the record. The ld. Counsel has submitted that the impugned order has been passed by ld. CIT(A) upholding the penalty u/s 271(1)(c) of the Act while quantum appeal was still pending before the ld. CIT(A). Ld. Counsel has submitted that this aspect was specifically mentioned to the ld. First Appellate Authority still the impugned order has been passed. At the time of hearing also ld. Counsel stated at bar that the quantum appeal is still pending before ld. First Appellate Authority.

In light of aforesaid we are of the considered view that ld. First Appellate Authority exercising co-terminus powers of Assessing Officer when hears first appeal on quantum the same should be adjudicated prior to adjudication of penalty appeal which has the foundation in the quantum order of assessment.

Accordingly, we allow the appeal of assesse for statistical purposes and setting aside the impugned order we restore the issues on merits to the files of ld. CIT(A) to pass order afresh after taking into consideration the aforesaid observations of the Bench.