RISHIRAJ HITENDRA BHANDARI ,MUMBAI V. INCOME TAX OFFICER WARD 24(3)(1), MUMBAI

ITA 7156/MUM/2025

AI Insights

The case involves an appeal by Rishiraj Hitendra Bhandari against a penalty levied under Section 271AAC of the Income-tax Act, 1961, concerning the Assessment Year 2017-18. The penalty was initially imposed following an addition made under Section 69 of the Act, which pertained to an investment in immovable property. This property was primarily in the name of the assessee's father, with the assessee also listed as a joint owner. However, the addition under Section 69 was later deleted by the CIT(A) in the quantum proceedings, a decision not appealed by the Revenue. The Tribunal, upon reviewing the circumstances, agreed with the assessee's argument that the basis for the penalty had been nullified by the deletion of the addition under Section 69, leading to the penalty's deletion.

• Counselvise Citation: [2026] 140 COUNSELVISE.COM (IT) 832241 (ITAT-MUMBAI)
• Duration Of Justice: 2 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-01-2026
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Assessment Year: misc
• Appeal Filed On: 06-11-2025
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ANNAVARAMKOSURI
• Assessee Lawyers: FENIL BHATT
• Section: 69

Judgement Text

"1 IN THE INCOME-TAX APPELLATE TRIBUNAL, MUMBAI“D” BENCH, MUMBAI BEFORE SHRI VIKRAM SINGH YADAV, ACCOUNTANT MEMBER AND SHRI RAHUL CHAUDHARY, JUDICIAL MEMBER ITA No. 7156/MUM/2025(AY: 2017-18) RishirajHitendra Bhandari 224/234, Tower B, Kalpataru Horizon, Worli, Mumbai-400018. vs. Income Tax Officer, Ward 24(3)(1) Piramal Chamber, Lalbaug, Parel, Mumbai-400012. PAN/GIR No:AOCPB2452H (Appellant) (Respondent) Appellant by Shri Fenil Bhatt-Advocate Respondent by Shri AnnavaramKosuri, Sr. AR Date of Hearing 14.01.2026 Date of Pronouncement 19.01.2026 O R D E R PER VIKRAM SINGH YADAV, AM: This appeal filed by the assesseeemanates from the order passed under Section 250 of the Income-tax Act, 1961 (in short, ‘Act’) by the learned Commissioner of Income-Tax, National Faceless Appeal Centre*in short, ‘CIT(A), NFAC’+, Delhi, dated 22.09.2025 for the Assessment Year 2017-18, wherein the assessee has challenged the sustenance of levy of penalty u/s. 271AAC of the Act. 2. During the course of hearing, the ld. AR submitted that the addition has been made by the AO u/s. 69 of the Act in respect of investment made in an immovable property primarily in the name of the assessee’s father and the assessee name was also added as a joint owner of the said property. It was submitted that in the quantum proceedings, the addition so made u/s. 69 of the Printed from counselvise.com ITA No.7156/MUM/2025/AY 2017-18 RishirajHitendra Bhandari 2 Act have been deleted by the ld. CIT(A) and in this regard, our reference was drawn to the order passed u/s. 250 of the Act dated 21.07.2025 which is available as part of the assessee’s paper book at pages 63-103. It was accordingly submitted that where the addition so made u/s. 69 of the Act no more survives in light of the order in the quantum proceedings and against which, the Revenue is not in appeal, there is no basis for levy of penalty u/s. 271AAC of the Act. 3. The ld. DR has been heard who has relied on the penalty order so passed by the AO. 4. We have heard the rival contentions and perused the material available on record. It is a case where the penalty has been levied u/s. 271AAC of the Act. Sub-section (1) of 271AAC of the Act provides that the AO may, notwithstanding anything contained in this Act other than the provisions of section 271AAB, direct that in a case where the income determined includes any income referred to inter-alia section 69 for any previous year, the assessee shall pay by way of penalty, in addition of tax payable u/s. 115BBE of the Act, computed @10% of the tax payable under clause (i) of sub-section (1) of section 115BBE of the Act. The penalty is thus consequential to income determined u/s 69 of the Act. In the instant case, where the addition so made by the AO u/s. 69 stand deleted by virtue of the order passed by the ld. CIT(A) in the quantum proceedings, we find merit in the contention advanced by the ld. AR that the very foundation for levy of penalty no more survives and there is thus no basis left for sustenance of levy of penalty u/s. 271AAC of the Act. In view of the same, the penalty so levied and sustained by the ld. CIT(A) is hereby deleted. Printed from counselvise.com ITA No.7156/MUM/2025/AY 2017-18 RishirajHitendra Bhandari 3 5. In the result, appeal of the assessee is allowed. Order is pronounced on 19.01.2026 Sd/- Sd/- (RAHUL CHAUDHARY) (VIKRAM SINGH YADAV) JUDICIAL MEMBER ACCOUNTANT MEMBER Anandi.Nambi(Steno) MUMBAI Date: 19.01.2026 Copy of the Order forwarded to: 1. The Assessee 2. The Respondent 3. The CIT(A) 4. CIT 5. DR/AR, ITAT, MUMBAI 6. Guard File By Order Assistant Registrar ITAT, MUMBAI Printed from counselvise.com "