27/08/2026
NDM Advisors LLP is pleased to announce a significant success before the Hon’ble Income Tax Appellate Tribunal, Delhi Bench ‘A’, in the matter of one of our corporate clients.
The Hon’ble ITAT, vide its order dated 13 August 2026, allowed the appeal and deleted the penalty of INR 46,75,375 levied under Section 271(1)(c) of the Income-tax Act, 1961.
The appeal involved a delay of 1,035 days, which was condoned by the Hon’ble Tribunal upon being satisfied there was a sufficient cause. In doing so, the Tribunal followed the settled principles laid down by the Hon’ble Supreme Court in Collector, Land Acquisition v. Mst. Katiji & Ors. (1987) 2 SCC 107, reaffirming that procedural delay should not come in the way of adjudication on merits where sufficient cause is established.
The Tribunal reaffirmed an important principle in penalty jurisprudence that an addition or transfer pricing adjustment, by itself, cannot constitute concealment of income or furnishing of inaccurate particulars. In the present case, the TP adjustment arose from technical and interpretational differences in the methodology adopted for determining the arm’s length price and did not involve any concealment or inaccurate particulars. Relying on the principles laid down by the Hon’ble Supreme Court in CIT v. Reliance Petroproducts (P.) Ltd., the Tribunal held that the essential ingredients for levy of penalty under Section 271(1)(c) were not satisfied and accordingly deleted the penalty.
We are pleased to have assisted our client in securing a favourable outcome in a long-standing tax dispute and remain committed to delivering rigorous, strategic and outcome-oriented tax and legal representation. The matter was represented before the Hon’ble ITAT – Delhi Bench by CA Mukul Gupta and Ms. Shikha Verma, Advocate.
A significant outcome for our client and another milestone for NDM Advisors LLP’s Tax & Legal practice.
