2026 (3) TMI 1228

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.... in turn arisen out of penalty order dt. 20/03/2023 passed u/s 270A of the Act by the National Faceless e-Asstt Centre ['Ld. NFeAC' hereinafter] anent to assessment year 2020-21['AY' hereinafter]. 2. This appeal deals with the legitimacy of action of first appellate authority in confirming levy of penalty u/s 270A of the Act when appeal against quantum is pending for adjudication on merits. 3. We have heard the learned counsel for the assessee Mr Halbhavi and Ld. Uniyal representing respondent Revenue at length and subject to the provisions of rule 18 of Income Tax Appellate Tribunal Rules, 1963 ['ITAT- Rules' hereinafter] perused the material placed on records and duly considered the facts in the light of settled legal position which....

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....the Act was also assailed by the assessee by filing first appeal before Ld. first appellate authority. Pending the disposal of former quantum appeal the Ld. NFAC by an impugned order dt 29/10/2025 however upheld the action of Ld. NFeAC in imposing the penalty u/s 270A of the Act. 3.5 The assessee in this appeal alleged the action of Ld. NFAC for confirming levy of penalty prematurely without first dealing with the quantum appeal on merits as violative of natural justice. 4. In adjudicating the issue under consideration, without reproducing the provisions of section 270A of the Act, it shall be purposive to state that, from AY 2017-18 the AO, CIT, CIT(A) and PCIT are severally empowered at a discretion to initiate and levy a penalty @5....

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....ditional tax' as held by the Hon'ble Supreme Court in 'CIT Vs Bikaji Dadabhai & Co.' [1961, 42 ITR 123 (SC)] which their hon'ble lordships subsequently reiterated in 'Jain Brothers Vs Union of India' [1970, 77 ITR 107 (SC)]. In the light of aforestated judicial precedents, we are heedful to state that, the Ld. NFAC without first adjudicating the pending quantum appeal, that is to say without first determining the basic tax payable has proceeded to determine the additional tax payable by the appellant in the form of penalty u/s 270A. This in our considered view is like, building the floors in the air without first laying down the foundation on the earth. 7. The sound general rule is that penalty cannot in law be levied on a doctrine of 't....