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Judgment
Per Raj Kumar Chauhan, Judicial Member:
This appeal of the assessee is directed against the order dated 07.05.2024 of ld. CIT(A)/NFAC , Delhi passed u/s 250 of the Income Tax Act, 1961 (hereinafter referred to as “the Act”) for A.Y. 2021-22 wherein, the pe nalty order dated 28.11.2024 is passed u/s 270A during the appellate proceedings by ld. CIT(A)/NFAC , Delhi on the ground that the appellant has misrepresented facts while calculating LTCG in sale of two immovable properties and that lead to claim of excess deduction of LTCG and also under reporting of his to tal income in the return of inco me filed. Hence, a separate penalty proceedings u/s 270A of the Act was initiated during the course of appellate proceedings. A show-cause notice was issued and in response to said show-cause notice dated 07.05.2024, the appellant submitted reply dated 31.05.2024 stating that he had filed appeal against the quantum order before the Hon’ble ITAT. The ld. CIT(A) observed that the appellant did not file any separate written submission in response to the show-cause notice for penalty u/s 270A of the Act, the ld . CIT (A) proceeded to decide the penalty ex-parte.
Aggrieved by the said impugned order, the assessee filed appeal before us and has raised the following grounds of appeal:
“1 )That the order of the L earned Commissioner of Inc ome Tax (Appeal] is ba d i n law a nd on the facts of t he cas e.
2] That the assessee has already preferr ed an appeal before the Honourabl e Income Ta x Appellate Tribunal , New Del hi agai nst the quantum enhancement of Capital G ains to Rs . 10,05,82,1 09/- agai nst decl ared Ca pi tal Gai ns of Rs. 5,82,92,758/- and di sallowance of deducti on u/s 54 for Rs. 5 ,82,92,758/-.
3] That the assessee furnis hed the details of the quant um appeal filed befor e the Honourable Income Tax Appellat e Tribunal, N ew Del hi vide respons e dated 04.06.2024, 16.07.2024 & 28.10.2024 and r eques ted for the penalty pr oceedi ngs to be kept i n abeyanc e ti ll the outcome of t he a ppeal. The Ld. CIT(A) ha s disregarded the same contrar y to t he pro visi ons laid down u/s 275(l)(a ) of The Income Tax A ct, 1961.
4] That the Ld. C IT (A ) has disregar ded t he facts on rec ord and has err oneously given credit for the i ndexed cost of acquisition o f the capital asset for Rs. 289,17,891/- i ns tead of Rs . 6,86,6 5,242/- claim ed by the assessee, as per det ails given belo w: -
S. N o . P u r c h a s e D a t e I n d e x R a t i o Co s t ( i n R s . ) I n d e x Co s t a ] 1 9 . 1 0 . 2 0 1 3 3 0 1 / 2 2 0 8 4 , 7 2 , 0 0 0/ - 1 , 1 5 , 9 1 , 2 36 /- b) 1 9 . 1 0 . 2 0 1 3 3 0 1 / 2 2 0 1 , 2 6 , 6 4 , 00 0 /- 1 , 7 3 , 2 6 , 6 55 /- 2 , 8 9, 17 , 8 9 1/ 0 1 . 0 4 . 2 0 0 1 3 0 1 / 1 0 0 1 , 3 2 , 0 5 , 10 0 /- -3 , 9 7 , 4 7 , 3 51 /- To t a l 6 , 8 6, 65 , 2 4 2/ -
5] That the net s ale consideration of the pr operties has bee n ta ken a s Rs. 12,95,00,000/- i ns tead of Rs.12,69,58,000/- as per details giv en bel ow: -
Sa le C on si d e r at io n 12 , 95 ,0 0 ,00 0 /- Le s s: C om m iss io n & T ra ns f e r Exp enses 25, 42 ,0 0 0 /- N et S al e C on sid e r ati on 12, 69 ,5 8 ,00 0 /- 6]That the Ld. CIT(A ) has erred i n not allowi ng deduction u/s 54 of the Inc ome Tax Ac t 1961 amounti ng to Rs.5,82,92,758/- on acc ount of i nvestment made i n the purc has e of house property on 09.04.2021 amounti ng to Rs.7,03,00,000/- (includi ng Rs .53,00,000/- for stamp paper and r egistration exp enses).
7)That t he Ld. CIT(A ) has err ed in assess ment of the Long-Term Capital Gains whi ch is correctly tabul ated as under:-
a)Net Sal es considerati on 12,69,58,000/-Less : Index Cost 6,86,65,242/-Capital Gain 5,82,92,758/-Deduction for Invt . u/s 54 Balanc e Taxable 7,03,00,000/- 5,8 2,92,758/-Nil
8)That the Ld. C IT (Appeal ) bei ng diss atisfied with the valuation re port fur nis hed b y the assessee from a gov ernment approved val uer, without r eferri ng the same to de partmental val uer , rej ected the report. The said rej ection by the Ld. CIT(A ), whic h is not i n complia nce with t he procedure laid down under the la w, cannot be tr eated as conc ealme nt of income. It was at best only a difference of opinio n in r esp ect of the val uati on of prop erty i n ques tion.
9)That the impos ition o f penalty of Rs.3,40,01,804/-is unj ust and arbitrary .”
At the thre shold , it is noticed that the penalty in dispute has been initiated and sustained by the Ld. CIT( A) primarily on the basis of quantum addition made by the Assessing Officer which has been confirmed by the order of the ld . CIT(A) dated 07.05.2024. However, during the course of hear ing, the ld. AR brought to our notice that against the very quantum appellate order dated 07.05.2024, the assessee preferred an appeal before this Tribunal in IT A No. 2827/Del/2024 and the Co-ordinate Bench of ITAT Delhi vide its order dated 20.05.2026 has restored the quantum appeal to the file of the AO for fre sh adjudication after affording an effective opportunity of hearing to the assessee. Since the quantum additio n has been restored back to the file o f the AO for fresh adjudicatio n, thus the penalty in dispute is not sustainable in the eyes of law at this juncture, therefore, the impugned order dated 07.05.2024 is set aside and the matter is restored back to the file of the AO for fresh adjudicatio n, in accordance with law, after giv ing adequate opportunity of he aring to the assessee.
In the result, the appeal of the assessee is allowed for statistical purposes.