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Judgment
Per Raj Kumar Chauhan, Judicial Member:
The appeal of the assessee is directed against the order dated 12.12.2025 u/s 250 r.w.s. 271(1)(c) r.w.s. 274 of the Income Tax Act, 1961 (hereinafter referred to as "the Act") wherein the penalty imposed vide assessment order dated 31.12.2018 passed u/s 153A r.w.s. 143(3) of the Act was partly confirmed by the Id. CIT(A) holding that the quantum appeal has been partly allowed by the Hon'ble ITAT, New Delhi by deleting the 50% of the addition vide order dated 02.04.2025 and accordingly penalty is restricted to the addition confirmed. The Id. CIT(A) has accordingly passed the impugned order partly allowing the appeal of the assessee.
Aggrieved by the impugned order, the assessee in appeal before us and has raised the following grounds of appeal:
'1 That the Ld. CIT(A) has erred in law and on facts, while confirming the penalty u/s 271(1)(c) of the act without appreciating the facts and explanation offered by appellant during the course of impugned appeal proceedings. As such penalty of Rs. 1,31,480/ may please be deleted.
2 That, the Ld. CIT(A) has erred in law and on facts, while confirming the penalty u/s 271(1)(c) of the act alleging concealment of income by appellant assessee without appreciating the fact that tire appellant had duly filed detailed documentary evidences in support of its claim in quantum appeal and tire issue is subjectively decided by Honorable ITAT allowing partial relief to the appellant therein and thereby, such subjective issue does not tantamount to concealment of income and consequently, case of the appellant is covered by judgement of honorable Apex Court in the case of CIT vs. Reliance Petroproducts Pvt. Ltd. 2010 322 ITR 158 (SC). As such, impugned conclusion confirmed by the Ld. CIT(A) that the appellant assesses had concealed impugned income is inappropriate and thereby impugned penalty confirmed is invalid and deserve to be quashed at the threshold.
3 That, the Ld. CIT(A) has erred in law and on facts, while confirming the penalty u/s 271(1)(c) of the act alleging concealment of income by appellant assesses without appreciating the fact that there was no column in the Income Tax Return applicable for her, to report impugned exempted gifts received during the period under consideration. As such, impugned conclusion confirmed by the Ld. CIT(A) that the appellant assesses had concealed impugned income is inappropriate and thereby impugned penalty confirmed is invalid and deserve to be quashed at the threshold."
We have heard the Id. AR and the Id. DR. The Id. AR at the very outset submitted that the confirmation of the penalty which was imposed by the AO without any legal justification is not justified and the whole penalty should have been deleted by the Id. CIT(A). It is further argued that once the quantum appeal has been allowed though partly, the factum of concealment of income or furnishing inaccurate particular of income cannot be stated to be established and the said aspect of the assessment proceedings stands diluted by the Hon’ble ITAT order. It is further argued that even the co-ordinate bench of Delhi Tribunal in the case of sister of the assessee, vide order dated 30.01.2025 in ITA No. 3553/Del/2023 has set aside the penalty proceedings, notwithstanding that the quantum proceedings were not set aside. The Id. AR has referred and relied even the case of CIT vs. Reliance Petroproducts Pvt. Ltd. (2010) 322 ITR 158 (SC) which has been referred and relied by the Hon’ble co-ordinate bench. The Id. co-ordinate bench while deleting the penalty has observed in para No. 4 and 5 as under:
“4. Be that as it may, the fact remains that the impugned quantum addition of unexplained investment is a highly subjective issue requiring appreciation of evidence at length whose rejection could neither be termed as concealment of income nor furnishing of inaccurate particulars; as the case may be. I, accordingly quote CIT v. Reliance Petroproducts Pvt. Ltd. (2010) 322 ITR 158 (SC) that once quantum and penalty have been held as parallel in nature, each and every disallowance/ addition in former does not attract the latter penal provision, to delete the impugned penalty in very terms. Ordered accordingly.
5.This assessee’s appeal is allowed”
The Id. DR on the other hand supported the order of the Id. lower authorities and prayed for dismissal of the appeal.
We have considered the rival submissions and examined the record. Admittedly, the facts and circumstances of the case are in hand are identical to the fact and circumstances of ITA No. 3553/Del/2023 (supra) which is case of sister of assessee. Respectfully following the observation of the Id. co-ordinate bench, we are of the considered opinion that confirmation of penalty by the Id. CIT(A) in this case was not warranted and the same was not legally justified. It is so, because once the quantum appeal has been partly allowed by reducing the addition made u/s 69A r.w.s. 115BBE of the Act, the mandate of the provision of section 271(1)(c) of the Act which requires concealment of income or furnishing of inaccurate particulars of income, stands diluted and it cannot be stated that the requirement of section 271(1)(c) of the Act for imposing the penalty was fulfilled. For these reasons, the grounds raised by the assessee are allowed and penalty so imposed is ordered to be deleted.
In the result, the appeal of the assessee is allowed.