$~22 and 23 * IN THE HIGH COURT OF DELHI AT NEW DELHI + W.P.(C) 7170/2026 MIXPANEL, INC .....Petitioner Through: Mr. Kamal Sawhney and Mr. Nishank Vashistha, Advs. versus DEPUTY COMMISSIONER OF INCOME TAX CIRCLE INTERNATIONAL TAX 2 2 1 NEW DELHI & ANR. .....Respondents Through: Mr. Gaurav Gupta, SSC with Mr. Shivendra Singh, JSC and Mr. Yogit Pareek, JSC. 23. + W.P.(C) 7171/2026 & CM APPL. 35096/2026 MIXPANEL, INC. .....Petitioner Through: Mr. Kamal Sawhney and Mr. Nishank Vashistha, Advs. versus DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE-2-2-1, INTERNATIONAL TAX, NEW DELHI & ANR. .....Respondents Through: Mr. Gaurav Gupta, SSC with Mr. Shivendra Singh, JSC and Mr. Yogit Pareek, JSC. CORAM: HON'BLE MR. JUSTICE DINESH MEHTA HON'BLE MR. JUSTICE RAJNEESH KUMAR GUPTA O R D E R % 23.07.2026 1. By way of the present writ petitions, the petitioner has challenged the This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 25/07/2026 at 11:56:46 order dated 31.03.2026 passed by the Assistant Commissioner, Income Tax, New Delhi (2)(2)(1) [hereinafter referred to as ‘the Assessing Authority’], whereby a penalty under Section 270A of the Income Tax Act, 1961 [hereinafter referred to as ‘the Act’] of 1961 to the tune of Rs. 9,30,24,492/- has been imposed on account of the alleged misreporting of income. 2. Mr. Kamal Sawhney, learned counsel for the petitioner, submitted that the impugned penalty order is per se illegal and without jurisdiction, in asmuchas it emanates from an assessment order passed by the Assessing Officer [hereinafter referred to as ‘the AO’] on 27.01.2025, against which the assessee had preferred an appeal before the Income Tax Appellate Tribunal [hereinafter referred to as ‘the ITAT’], which had been allowed by the Tribunal vide its order dated 21.05.2025. 3. He argued that, though the Tribunal vide its order dated 21.05.2025 had set aside the assessment order and decided the issue relating to fee for technical services in favour of the assessee, and the assessment order had been set aside by the Tribunal vide order dated 21.05.2025, the petitioner had brought the said fact to the notice of the AO during the penalty proceedings and had requested him to drop the penalty proceedings. However, the AO did not accede to the petitioner’s request and proceeded to pass the impugned penalty order. 4. He argued that once the findings of the AO on merits had been set aside, the imposition of penalty is not only illegal but also an arbitrary exercise of power. 5. Mr. Gaurav Gupta, learned Senior Standing Counsel, on the other hand, submitted that the petitioner ought to have preferred an appeal against the This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 25/07/2026 at 11:56:46 order impugned instead of directly assailing the same before this Court. 6. He argued that the grounds raised by the petitioner before this Court can very well be raised before the Appellate Authority and that the present case is not a fit one for this Court to exercise its extra-ordinary writ jurisdiction under Article 226/227 of the Constitution of India. 7. He further submitted that, when the impugned order was passed, the Department was in the process of filing an appeal against the order of the Tribunal and thus, the Assessing Officer was justified in passing the impugned penalty order, as he was hopeful of getting a stay on the operation of the Tribunal’s order. 8. Mr. Kamal Sawhney, learned counsel for the petitioner in rejoinder, submitted that although the Department had preferred an appeal against the order of the Tribunal, neither has any interim order been passed, nor has any stay application even been moved by the Department. Therefore, the plea taken by the AO is absolutely misconceived and misplaced. 9. Having heard the learned counsel for the parties, we are of the view that, in spite of the fact that a remedy of appeal is available to the petitioner before the Commissioner of Income Tax (Appeals), the present case warrants exercise of writ jurisdiction, as the AO has proceeded arbitrarily in passing the impugned penalty order. 10. There is no gainsaying the fact that, during the course of the penalty proceedings, the ITAT had already set aside the assessment order as well as the adjustment towards FTS made by the AO. Therefore, the basis for the creation of demand had ceased to exist by virtue of findings returned by the superior fact-finding Authority, which were binding upon the AO. Once the basis of assessment had gone, the very foundation of misrepresentation or This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 25/07/2026 at 11:56:46 misreporting of the income also vanished. 11. That apart, the provision imposing the penalty, namely Section 275 (1A), unequivocally provides that, until the proceedings of appeal are pending, the penalty proceedings shall not be finalized. The said provision as a necessary corollary implies that the AO should await the outcome of the appeal, and once the appeal is allowed, give respect and effect to the Appellate order. The penalty proceedings, thus, ought to have been dropped. 12. The writ petition is therefore, allowed. The impugned penalty order dated 31.03.2026, along with consequential demand notice of even date is hereby set aside. 13. Needless to observe that, in case, the appeal filed by the Department is allowed, the respondents shall be free to take appropriate proceedings, in accordance with law, if so desired. DINESH MEHTA, J. RAJNEESH KUMAR GUPTA, J. JULY 23, 2026/sds This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 25/07/2026 at 11:56:46