VIKRAM SUGRIV KALE,OSMANABAD V. INCOME TAX OFFICER WARD 1,NANDED, NANDED

ITA 2833/PUN/2025

AI Insights

The case involves Vikram Sugriv Kale, an individual engaged in manufacturing and contracting, who appealed against a penalty levied by the Income Tax Officer (ITO) under section 271AAC of the Income Tax Act, 1961. The penalty was imposed following an assessment that increased Kale's declared income significantly due to unverified expenses. Although the CIT(A) later deleted the addition to the income, the penalty remained, leading Kale to appeal for its cancellation. The Tribunal found that the penalty was improperly sustained after the deletion of the quantum addition and directed its removal.

• Counselvise Citation: [2026] 140 COUNSELVISE.COM (IT) 831706 (ITAT-PUNE)
• Duration Of Justice: 1 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-01-2026
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: misc
• Appeal Filed On: 26-11-2025
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MANISH MEHTA
• Assessee Lawyers: ROHIT S TAPADIYA; PRINTED FROM COUNSELVISE.COM
• Section: 143(3)

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH “B”, PUNE BEFORE SHRI R. K. PANDA, VICE PRESIDENT AND Ms. ASTHA CHANDRA, JUDICIAL MEMBER ITA No.2833/PUN/2025 Assessment year : 2018-19 Vikram Sugriv Kale Vikram Stoves and Fabricators, Digvijay Construction, A 37, MIDC, Osmanabad – 413501 Vs. ITO, Ward 1, Nanded PAN: AGAPK8979L (Appellant) (Respondent) Assessee by : Shri Rohit S Tapadiya Department by : Shri Manish Mehta, Addl.CIT Date of hearing : 21-01-2026 Date of pronouncement : 21-01-2026 O R D E R PER R.K. PANDA, VP: This appeal filed by the assessee is directed against the order dated 12.11.2025 of the Ld. CIT(A) / NFAC, Delhi relating to assessment year 2018-19. 2. Facts of the case, in brief, are that the assessee is an individual and engaged in the business of running a manufacturing unit and contractor-ship in irrigation department. The assessee filed his return of income declaring total income of Rs.52,02,470/-. The case was selected for limited scrutiny on the issue of verification of genuineness of expenses. The Assessing Officer passed the order u/s 143(3) r.w.s. 143(3A) and 143(3B) of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) on 20.03.2021 determining the total income of the assessee at Rs.86,63,652/-. Printed from counselvise.com 2 ITA No.2833/PUN/2025 3. The assessee filed an appeal before the Ld. CIT(A) / NFAC, who vide order dated 08.11.2024 deleted the addition made by the Assessing Officer. In the meantime, the Assessing Officer had initiated penalty proceedings u/s 271AAC(1) of the Act on 16.08.2021 and levied penalty of Rs.2,67,376/-. However, the assessee has not filed any appeal against the order of the Assessing Officer levying penalty u/s 271AAC(1) of the Act. The assessee filed an application before the Assessing Officer with a request to modify the penalty order u/s 271AAC(1) of the Act cancelling the levy of penalty on the ground that the Ld. CIT(A) / NFAC has deleted the addition. The Assessing Officer passed an order rejecting the application of the assessee by observing as under: “Hence, it is clear from the above provision that, the order sought for u/s 275(1A) of the Act is 'may be issued’ but not 'shall be issued'. The use of 'may’ generally implies discretion, but 'shall’ implies mandatory compliance. Hence, it is not binding on the Assessing Officer to pass order u/s 275(1A), suo-moto, on the basis of the order giving effect to the order of the Ld. CIT(A).” 4. The assessee filed an appeal against this order of the Assessing Officer before the Ld. CIT(A) / NFAC who vide order dated 12.11.2025 dismissed the appeal filed by the assessee by observing as under: Printed from counselvise.com 3 ITA No.2833/PUN/2025 5. Aggrieved with such order of the Ld. CIT(A) / NFAC the assessee is in appeal before the Tribunal by raising the following grounds: 1) Ld. CIT-A ought to have directed AO to pass order u/s 275(1A) by reducing the levy of penalty of Rs.2,67,376/-. 2) The ld. AO ought to have passed the order u/s 275(1A) and ought to have cancelled the penalty of Rs.2,67,376 levied u/s 271AAC in view of the fact Printed from counselvise.com 4 ITA No.2833/PUN/2025 that the quantum order is already decided in my favour the entire addition is deleted. 3) The appellant craves its right to add to or alter the Grounds of Appeal at any time before or during the course of hearing of the case. 6. The Ld. Counsel for the assessee submitted that once the quantum addition which is the basis for levy of penalty has been deleted, the penalty does not survive and the Assessing Officer should have passed an order cancelling the penalty. However, he has not done so. The Ld. CIT(A) / NFAC also without considering the fact of the case properly has dismissed the appeal. He accordingly submitted that the grounds raised by the assessee should be allowed and the penalty levied by the Assessing Officer and sustained by the Ld. CIT(A) / NFAC be deleted. 7. The Ld. DR on the other hand heavily relied on the orders of the Assessing Officer and the Ld. CIT(A) / NFAC. 8. We have heard the rival arguments made by both the sides, perused the orders of the Assessing Officer and Ld. CIT(A) / NFAC and the paper book filed on behalf of the assessee. It is an admitted fact that the assessee has not filed any appeal against the penalty order passed by the Assessing Officer. However, the assessee filed an application before the Assessing Officer with a request to delete the penalty on the ground that the quantum addition has already been deleted by the Ld. CIT(A) / NFAC. This application in our opinion, should have been considered by the Assessing Officer especially when the quantum addition has Printed from counselvise.com 5 ITA No.2833/PUN/2025 already been deleted and penalty has no legs to stand. We find the Ld. CIT(A) / NFAC became hyper technical and dismissed the appeal filed by the assessee despite knowing the fact that the quantum addition has already been deleted. In our opinion, once the quantum addition has been deleted, the Assessing Officer should have suo motu deleted the penalty since the very basis on which the penalty was levied does not survive. In view of the above discussion and considering the fact that the quantum addition has already been deleted by the Ld. CIT(A) / NFAC and the Revenue is not in appeal before the Tribunal against the such deletion, the penalty so levied by the Assessing Officer does not survive. Accordingly the same is directed to be deleted. The grounds raised by the assessee are accordingly allowed. 9. In the result, the appeal filed by the assessee is allowed. Order pronounced in the open Court on 21st January, 2026. Sd/- Sd/- (ASTHA CHANDRA) (R. K. PANDA) JUDICIAL MEMBER VICE PRESIDENT पुणे Pune; दिन ांक Dated : 21st January, 2026 GCVSR Printed from counselvise.com 6 ITA No.2833/PUN/2025 आदेश की प्रतितिति अग्रेतिि/Copy of the Order is forwarded to: 1. अपील र्थी / The Appellant; 2. प्रत्यर्थी / The Respondent 3. 4. The concerned Pr.CIT, Pune DR, ITAT, ‘B’ Bench, Pune 5. ग र्ड फ ईल / Guard file. आदेशानुसार/ BY ORDER, // True Copy // Assistant Registrar आयकर अपीलीय अदिकरण ,पुणे / ITAT, Pune S.No. Details Date Initials Designation 1 Draft dictated on 21.01.2026 Sr. PS/PS 2 Draft placed before author 21.01.2026 Sr. PS/PS 3 Draft proposed & placed before the Second Member JM/AM 4 Draft discussed/approved by Second Member AM/AM 5 Approved Draft comes to the Sr. PS/PS Sr. PS/PS 6 Kept for pronouncement on Sr. PS/PS 7 Date of uploading of Order Sr. PS/PS 8 File sent to Bench Clerk Sr. PS/PS 9 Date on which the file goes to the Office Superintendent 10 Date on which file goes to the A.R. 11 Date of Dispatch of order Printed from counselvise.com "