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Judgment
PER NAVEEN CHANDRA, ACCOUNTANT MEMBER :
This captioned appeal has been filed by the assessee against the order of the learned Dy. Commissioner of Income Tax - New Delhi [‘DCIT’ in short] dated 25.05.2021 arising from the penalty order dated 09.06.2025 passed by the Commissioner of Income Tax (Appeals)-25 under Section 271(1)(c) of the Income Tax Act, 1961 (the Act) concerning Assessment Year (A.Y.) 2009-10.
The assessee has taken several legal grounds but the solitary issue involved in the case revolves around levy of penalty under section 271(1)(c) of the Act.
At the outset, learned Counsel submitted that the quantum appeal for A.Y. 2009-10 has been quashed by the ITAT in ITA No.3114/Del/2025 dated 28.01.2026 as being barred by limitation. The ld AR stated that since the quantum addition has been deleted, the penalty cannot survive.
Per contra, learned DR relied on the orders of the AO and CIT(A).
We have heard the rival submissions and carefully perused the materials on record. We find that quantum addition has been quashed by the ITAT and therefore the legal doctrine of sublato fundamento cadit opus squarely applies, meaning thereby that where the initial foundation (or premise/legality) of a case, is removed or declared void, the entire structure built upon it collapses. Since, the quantum addition does not survive, there is no scope for levying penalty under section 271(1)(c) of the Act. The penalty u/s 271(1)(c) is therefore deleted.
In the result, Appeal of the assessee is allowed.