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Judgment
O R D E R
PER ANUBHAV SHARMA, JM:
This appeal is preferred by the assessee against the order dated 07.11.2025 of the Ld. National Faceless Appeal Centre, Delhi (hereinafter referred to as the First Appellate Authority or ‘the ld. FAA’ for short) in DIN & Order No : ITBA/NFAC/S/250/2025-26/1082396297(1) arising out of the penalty order dated 20.03.2024 u/s 271AAC(1) of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) passed by Income Tax Faceless Assessment Unit, for AY: 2017-18.
On hearing both sides we find that vide ITA No. 5713/Del/2025 for AY: 2017-18 a Coordinate Bench vide order dated 24.12.2025 has taken into consideration the irregularities in grant of approval u/s 151 of the Act to hold that assumption of jurisdiction and the consequent order is vitiated and the Coordinate Bench had quashed the impugned reopening itself.
Ld. DR has contended that present penalty proceedings are separate and distinct. However, we are of the considered view that when the addition itself falls and is deleted there can be no sustainable allegation for levy of penalty u/s 271AAC(1) which can be determined only on the basis of addition made in corresponding sections of deeming income. Therefore, we allow the appeal of the assessee and the impugned penalty is quashed.
Order pronounced in the open court on 22.05.2026