ITAT Upholds Penalty Reduction u/s 275(1A) Despite Pending HC Appeal [Read Order]
The ITAT ruled that a penalty reduction under section 275(1A) remains valid even when an appeal on the addition is still pending before the higher authority.
![ITAT Upholds Penalty Reduction u/s 275(1A) Despite Pending HC Appeal [Read Order]](https://www.taxscan.in/wp-content/uploads/2025/04/Penalty-Reduction-site-img.jpg "ITAT Upholds Penalty Reduction u/s 275(1A) Despite Pending HC Appeal [Read Order]")
In a significant ruling, the Income Tax Appellate Tribunal (ITAT), Ahmedabad, held that Section 275(1A) permits the Assessing Officer (AO) to revise penalties in line with assessment changes directed by appellate authorities or courts even though the appeal is still pending. The assessee, Sunit Sudhirbhai Chokshi, was assessed at ₹23,87,99,020 for the Assessment Year (A.Y.) 2017-18...
In a significant ruling, the Income Tax Appellate Tribunal (ITAT), Ahmedabad, held that Section 275(1A) permits the Assessing Officer (AO) to revise penalties in line with assessment changes directed by appellate authorities or courts even though the appeal is still pending.
The assessee, Sunit Sudhirbhai Chokshi, was assessed at ₹23,87,99,020 for the Assessment Year (A.Y.) 2017-18 and 2018-19, based on differences between the returned and assessed income. A penalty of ₹28,088,610 was imposed by the AO under section 271AAB of the Income Tax Act, 1961, on the additions.
Want a deeper insight into the Income Tax Bill, 2025? Click here
Read More: Advances given in Return for an Advantage by the Shareholder is not Dividend u/s 2(22)(e): ITAT
Later on appeal, the Commissioner of Income Tax (Appeal) CIT(A) reduced the additions, leading to a lower penalty. The ITAT also gave partial relief in the quantum appeal. Based on this, the CIT(A) deleted the corresponding penalty and confirmed the remaining amount.
The Revenue challenged this before the ITAT, claiming the penalty should not have been deleted while their appeal was pending before the Gujarat High Court.
Meanwhile, the counsel for the assessee supported the order passed by the CIT(A).
The department was represented by counsel Rignesh Das, while the assessee was represented by counsels Biren Shah and Gulab Thakor.
How to Audit Public Charitable Trusts under the Income Tax Act Click Here
Read More: ITAT Allows Section 80P Deduction for Kerala University Co-op Society’s Bank Interest Income
After hearing both sides, the bench led by Dr. B.R.R. Kumar (Vice President) and T.R. Senthil Kumar (Judicial Member) found that the CIT(A) rightly reduced the penalty based on the ITAT’s earlier order in the quantum appeal.
The tribunal held that section 275(1A) of the Income Tax Act, 1961, allows revision of penalty in line with appellate decisions. Since there was no stay from the High Court, the tribunal’s order remained binding. As a result, the tribunal upheld the CIT(A)’s action and dismissed the Revenue’s appeal.
To Read the full text of the Order CLICK HERE
Support our journalism by subscribing to Taxscanpremium. Follow us on Telegram for quick updates
