INCOME TAX OFFICER, LUDHIANA V. KP EXIM INC, LUDHIANA

ITA 561/CHANDI/2025

AI Insights

The case involves an appeal by the Income Tax Department against the order of the Commissioner of Income Tax (Appeals), which had deleted a substantial penalty imposed on K.P. Exim Inc. The penalty was originally levied by the Assessing Officer following a reassessment that added a significant amount to the assessee's income under section 69 of the Income Tax Act. However, this reassessment was later set aside by the CIT (Appeals), and upon re-assessment, the original income was accepted, leading to the deletion of the penalty. The Tribunal's decision focused on the absence of any addition to the assessee's income in the final reassessment, which was crucial in determining the sustainability of the penalty.

• Counselvise Citation: [2026] 140 COUNSELVISE.COM (IT) 839118 (ITAT-CHANDIGARH)
• Duration Of Justice: 10 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-02-2026
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2015-2016
• Appeal Filed On: 17-04-2025
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MANAV BANSAL
• Assessee Lawyers: Y.K. SAXENA; AMANDEEP SAXENA
• Keywords: Set aside
• Section: 148; 271(1)(c)

Judgement Text

"आयकर अपीलȣय अͬधकरण,चÖडीगढ़ Ûयायपीठ, चÖडीगढ़ IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH, ‘A’ CHANDIGARH BEFORE SHRI RAJPAL YADAV, VICE PRESIDENT AND SHRI MANOJ KUMAR AGGARWAL, ACCOUNTANT MEMBER आयकर अपील सं./ ITA No. 561/CHD/2025 Ǔनधा[रण वष[ / Assessment Year: 2015-16 The ITO, Ward 3(1), Rishi Nagar, Ludhiana. Vs K.P.Exim Inc, Main Bahadur K.Road, Khaira,Lodhowal B.O., Ludhiana. èथायी लेखा सं./PAN NO: AAKFK2926M अपीलाथȸ/Appellant Ĥ×यथȸ/Respondent Assessee by : Shri Y.K. Saxena, Advocate & Shri Amandeep Saxena, CA Revenue by : Shri Manav Bansal, CIT DR Date of Hearing : 17.02.2026 Date of Pronouncement : 20.02.2026 HYBRID HEARING O R D E R PER RAJPAL YADAV, VP The Revenue is in appeal against the order of ld. Commissioner of Income Tax (Appeals) [in short ‘the CIT (A)’] dated 25.02.2025 passed for assessment year 2015-16. 2. The solitary grievance of the Revenue is that ld.CIT (Appeals) has erred in deleting the penalty of Printed from counselvise.com ITA No.561/CHD/2025 A.Y.2015-16 2 Rs.1,01,62,590/- which was imposed by the AO u/s 271(1)(c) of the Income Tax Act. 3. The brief facts of the case are that assessee has filed its return of income on 30.09.2015 declaring total income at Rs.8,90,880/-. This return was processed u/s 143(1) and returned income was accepted. The AO, thereafter, reopened the assessment by issuance of a notice u/s 148 of the Income Tax Act on 31.03.2021. The AO in an ex-parte order dated 26.03.2022 made an addition of Rs.2,90,07,882/- u/s 69 of the Income Tax Act. This ex-parte assessment order was set aside by the ld.CIT (Appeals) on 11.11.2022 u/s 251(1) 1st Proviso. The ld. AO has passed the fresh assessment order on 31.01.2026 and accepted the returned income filed by the assessee. 4. Since ld.CIT (Appeals) has set aside the assessment order and restored it to the file of AO for re-determination of the income of the assessee, therefore, ld.CIT (Appeals) has deleted the penalty. Printed from counselvise.com ITA No.561/CHD/2025 A.Y.2015-16 3 5. Before us, it has been brought to our notice that AO did not make any addition to the returned income of the assessee, therefore, no penalty is sustainable over the assessee. 6. With the assistance of ld. Representative, we have gone through the record carefully. A perusal of Section 271(1)(c)(iii) of the Act would indicate that penalty is to be computed on the additions made to the total income of the assessee. In other words, if some addition is being made to the declared income of an assessee, only then penalty could be computed. In the present case, no addition has been made after the fresh assessment order and therefore, there is no foundation to visit the assessee with the penalty. The ld.CIT (Appeals) has rightly deleted the penalty. No interference is called for. Accordingly, this appeal is dismissed. 7. In the result, appeal of the Revenue is dismissed. Order pronounced on 20.02.2026. Sd/- Sd/- (MANOJ KUMAR AGGARWAL) (RAJPAL YADAV) ACCOUNTANT MEMBER VICE PRESIDENT “Poonam” Printed from counselvise.com ITA No.561/CHD/2025 A.Y.2015-16 4 आदेश कᳱ ᮧितिलिप अᮕेिषत/ Copy of the order forwarded to : 1. अपीलाथᱮ/ The Appellant 2. ᮧ᭜यथᱮ/ The Respondent 3. आयकर आयुᲦ/ CIT 4. िवभागीय ᮧितिनिध, आयकर अपीलीय आिधकरण, च᭛डीगढ़/ DR, ITAT, CHANDIGARH 5. गाडᭅ फाईल/ Guard File सहायक पंजीकार/ Assistant Registrar Printed from counselvise.com "