CRS INFRASTRUCTURE LIMITED,NEW DELHI V. INCOME TAX OFFICER, WARD-6(1), NEW DELHI

ITA 5953/DEL/2025

AI Insights

The case involves CRS Infrastructure Ltd, which appealed against a penalty of Rs. 30,000 confirmed by the Commissioner of Income Tax (Appeals)/National Faceless Appeal Centre. The penalty was imposed for non-compliance with notices under section 142(1) during the assessment year 2016-17. The primary contention was that the penalty should not survive as the underlying assessment was set aside, and the show-cause notice for the penalty was vague. The Tribunal agreed with the assessee, noting the lack of specific details in the penalty notice and the procedural irregularities in the assessment process.

• Counselvise Citation: [2026] 140 COUNSELVISE.COM (IT) 841711 (ITAT-DELHI)
• Duration Of Justice: 5 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-02-2026
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Assessment Year: 2016-2017
• Appeal Filed On: 24-09-2025
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Set aside; Reasonable cause; Principle of natural justice
• Section: 147; 148; 144; 142(1)

Judgement Text

"5953_DEL_2025_CSR Infrastructure Limited 1 | P a g e IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH ‘G’, NEW DELHI BEFORE SHRI YOGESH KUMAR US, HON’BLE JUDICIAL MEMBER & SMT. RENU JAUHRI, HON’BLE ACCOUNTANT MEMBER ITA No. 5953/DEL/2025; Assessment Year: 2016-17 CRS Infrastructure Ltd B-201, Vikas Tower, Vikaspuri New Delhi- 18 Vs ITO Ward-6(1) Delhi (APPELLANT) (RESPONDENT) PAN No. AACCC9689A Assessee Represented by: Shri Ashish Bansal, Adv. Revenue/Department Represented by: Shri Arvind Kumar Trivedi, Sr. DR Date of Hearing: 18.02.2026 Date of Pronouncement: 25.02.2026 ORDER PER RENU JAUHRI : The above captioned appeal is preferred by the assessee against the order dated 29.07.2025, passed by Commissioner of Income Tax (Appeals)/National Faceless Appeal Centre [for short, Ld. CIT(A)/NFAC], New Delhi u/s 250 of the Income Tax Act, 1961 [hereinafter referred to as, “Act”] for A.Y. 2016-17. 2. The assessee has raised following grounds of appeal: “ 1.1. BECAUSE the learned CIT(A) has erred in law and on facts in confirming the penalty under section 271(1)(b) of the Income Tax Act. 1961 (hereinafter referred to as the Act) amounting to Rs. 30,000.00. 1.2. BECAUSE the underlying assessment itself was set aside in the first appeal in terms of order dated 23.07.2025 and therefore, the penalty of Rs. 30.000.00 can not survive in the eyes of law. 1.3. BECAUSE it is a settled position of law that once the assessment itself no longer exists, the resultant penalty can not Printed from counselvise.com 5953_DEL_2025_CSR Infrastructure Limited 2 | P a g e independently survive inasmuch as the penalty proceedings are inextricably linked to the result of the assessment and are not standalone in nature. WITHOUT PREJUDICE TO THE ABOVE 2.1. BECAUSE the learned Assessing Officer has failed to specify in the show cause notice dated 30.03.2024 as to which of the notices against which the impugned penalty was proposed and as such, the penalty proceedings and the consequential levy of penalty becomes void ab initio. 2.2. BECAUSE specification of the notice(s) against which the penalty is proposed is sine qua non for a valid show cause notice under section 271(1)(b) of the Act and therefore, the notice dated 30.03.2024 is not legally tenable. 3. BECAUSE there was a reasonable cause for non-compliance, if any, and as such pursuant to the provisions contained in section 2738 of the Act. the penalty of Rs. 30,000.00 is not liable to be sustained. 4. BECAUSE the order appealed against is contrary to the facts, law and the principles of natural justice to the extent above. 3. Brief facts of the case are that the assessee had not furnished its return for A.Y. 2016-17 whereas it had entered into high value transactions during the year under consideration. Accordingly, the case was reopened and a notice u/s 148 was issued . Thereafter, several notices were issued to the assessee u/s 142(1) to which no compliance was made and assessment was completed u/s 147 r.w..s 144 of the Act vide order dated 30.03.2024. Penalty proceedings u/s 271(1)(b) were also initiated for non-compliance to the notices u/s 142(1) issued during the course of assessment proceedings. Subsequently, a penalty of Rs. 30,000/- was levied vide order dated 09.09.2024. Printed from counselvise.com 5953_DEL_2025_CSR Infrastructure Limited 3 | P a g e 3.1 Aggrieved, the assessee preferred an appeal against levy of penalty before Ld. CIT(A). However, the appeal was dismissed by Ld. CIT(A), confirming the penalty vide order dated 23.07.2025. Further aggrieved, the assessee is in appeal before us. 4. Before us, Ld. AR has pointed out that the appeal against the assessment order was also filed before Ld. CIT(A). Vide order dated 23.07.2025, Ld. CIT(A) has restored the matter to Ld. AO for de novo assessment. He has, therefore, submitted that the penalty proceedings emanating from the same assessment order also deserve to be set-aside. He has further pointed out that in the notice for penalty issued by the Ld. AO, there is no mention of the notices u/s 142(1) which were not complied by the assessee and in respect of which the penalty was sought to be levied. Hence, even otherwise on the ground that penalty notice was vague, the penalty order is liable to be quashed. 5. Ld. DR on the other hand, has pointed out that the assessee had made no compliance to various notices as detailed in the assessment order and, accordingly, penalty u/s 271(1)(b) of Rs. 30,000/- deserves to be upheld. 6. We have heard the rival submissions and perused the material placed before us. It is noted that in the notice dated 30.03.2024, issued u/s 274 r.w.s 271(1)(b), it was stated that the assessee had failed to comply with ‘the following notices issued to him’. However, no details of these notices was mentioned as is evident from the copy of notice placed before us. Further, on perusal of the assessment order, it is noticed that in the table detailing the notices issued to the assessee, Ld. Printed from counselvise.com 5953_DEL_2025_CSR Infrastructure Limited 4 | P a g e AO has noted that reply to notice dated 30.01.2024 had been received. But while levying the penalty, Ld. AO has stated that the notice dated 30.01.2024 was not complied with and proceeded to levy the penalty. Finally, the assessee has not been given proper opportunity to furnish its explanation regarding reasons for non-compliance to the notices u/s 142(1), on account of absence of details of specific notices not complied with by it, in the show-cause notice. 7. In view of above facts and circumstances coupled with the fact that the assessment order has been set aside with directions to the AO to make de novo assessment, we hold that levy of penalty u/s 271(1)(b) in the instant case is not justified. We, therefore, delete the penalty of Rs. 30,000/- levied by the Ld. AO. 8. In the result, the appeal of the assessee is allowed. Order pronounced in the Open Court on 25 .02.2026. Sd/- Sd/- (YOGESH KUMAR US) (RENU JAUHRI) JUDICIAL MEMBER ACCOUNTANT MEMBER Dated: 25 .02.2026 Pooja Mittal, Sr. PS Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(A) 5. DR Asstt. Registrar, ITAT, New Delhi Printed from counselvise.com "