Penalty u/s 270A quashed as AO exceeded limited scrutiny scope without approval; quantum addition and basis invalidated ITAT Delhi-AT allowed the assessee's appeal and quashed the penalty order u/s 270A. The Tribunal noted that in the related quantum proceedings, the ...
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Penalty u/s 270A quashed as AO exceeded limited scrutiny scope without approval; quantum addition and basis invalidated
ITAT Delhi-AT allowed the assessee's appeal and quashed the penalty order u/s 270A. The Tribunal noted that in the related quantum proceedings, the addition had already been set aside because the AO had exceeded the scope of limited scrutiny without obtaining mandatory approval from the competent authority. Since the very foundation for the penalty-i.e., the quantum addition-did not survive due to this jurisdictional defect, ITAT held that no penalty could be sustained. Consequently, the penalty u/s 270A was deleted in full.
Appeal against penalty order dated 04.06.2025 under section 270A, Income Tax Act, 1961 was allowed and the penalty quashed. The Tribunal noted that the related quantum appeal (ITA No.86/Del/2025 for AY 2020-21) had been allowed by order dated 25.06.2025. The Tribunal held that where the quantum addition has been quashed on the basis that there was an "error in exercising jurisdiction by expanding limited scrutiny case without due approval of the competent authority," then "no case for penalty u/s 270A of the Act survives." Applying that principle, the impugned penalty order was set aside. Order pronounced in open court on 29.10.2025.
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