DEPUTY COMMISSIONER OF INCOME TAX 2 1 1 MUMBAI, MUMBAI vs. BANK OF INDIA, MUMBAI

आदेश / ORDER PER SMT. BEENA PILLAI, JUDICIAL MEMBER: Present appeal filed by revenue arises out of the order dated 12/02/2026 passed by NFAC, Delhi [hereinafter referred to as “Ld.CIT(A)”] for A.Y. 2018-19, on the following grounds of appeal:-

“1) The Ld. CIT(A) has erred in law and on facts in deleting the penalty levied under section 270A of the Income-tax Act, 1961. 2) The Ld. CIT(A) has erred in holding that the conditions for levy of penalty under section 270A were not satisfied, without appreciating that the assessed income exceeded the returned income, clearly attracting the provisions of section 270A(2)(g).

3) The Ld. CIT(A) has erred in deleting the penalty on the ground that additions have been deleted by the honourable ITAT, without appreciating that the issues have not attained finality and are subject to further appeal. 4) The Ld. CIT(A) has erred in holding that the case of the assessee is covered under section 270A(6), without appreciating that the assessee failed to substantiate that the explanation offered was bona fide and that all material facts were fully and truly disclosed. 5) The appellant craves to leave and add, amend, alter and/OR delete any of the ground of appeal as above.” 2. Brief facts of the case are as under:-

The assessee is a public sector bank. For AY 2018-19, the assessee filed its original return of income on 29/11/2018, declaring total loss of Rs. 6,416,21,52,964/-, which was subsequently revised on 31/03/2019, declaring total loss of Rs. 6,396,27,72,352/-. The case was selected for scrutiny and notice u/s. 143(2) was issued on 22/09/2019. Thereafter, notices u/s. 142(1) were issued from time to time and the assessment proceedings were conducted under the Faceless Assessment Scheme. The assessee furnished submissions and documents during the assessment proceedings and also availed an opportunity of Video Conferencing.

2.1. The assessment was completed u/s. 143(3) r.w.s. 144B of the Act on 28/09/2021, wherein various additions/disallowances were made aggregating to Rs. 9,307,87,93,451/-. These included, inter alia, disallowance u/s. 14A of Rs. 32,79,58,949/-, amortization of lease premium of Rs. 4,37,76,998/-, addition on account of exclusion of foreign income of Rs. 965,85,86,196/-, amortization of premium paid on securities under HTM category of Rs. 374,18,00,000/-, interest on innovative perpetual bonds of Rs.

657,06,16,348/-, interest accrued but not due of Rs. 2,403,81,07,459/-, bad debts written off of Rs. 2,620,31,00,000/- , valuation loss on securities held as stock-in-trade of Rs. 1,489,78,26,714/- and penalty imposed by RBI of Rs. 25,72,00,000/-. Penalty proceedings u/s. 270A were initiated in respect of the aforesaid additions/disallowances.

Aggrieved by the aforesaid assessment order, the assessee preferred an appeal before the Ld. CIT(A).

2.2. The Ld. CIT(A), vide order dated 28/02/2023, partly allowed the appeal. Certain additions/disallowances were sustained, while additions relating, inter alia, to amortization of premium paid on HTM securities, interest on innovative perpetual bonds, interest accrued but not due, valuation loss on securities held as stock-in- trade and penalty imposed by RBI were deleted. The assessee thereafter challenged the matters decided against it before the Tribunal.

2.3. Subsequently, the Ld. AO proceeded with the penalty proceedings u/s. 270A and passed the impugned penalty order dated 28/03/2024, levying a penalty of Rs. 564,43,87,905/- for under-reporting of income. The penalty proceedings were based upon the additions/disallowances which had survived the appellate proceedings.

Aggrieved by the aforesaid penalty order, the assessee preferred an appeal before the Ld. CIT(A).

2.4. Before the Ld. CIT(A), the assessee contended, inter alia, that mere confirmation of additions/disallowances in quantum proceedings could not, by itself, justify levy of penalty u/s. 270A; that the relevant claims had been made bona fide and all material facts had been disclosed; and that the provisions of section 270A(6) had not been properly considered by the Ld. AO. The assessee accordingly challenged the levy of penalty of Rs. 564,43,87,905/-.

2.5. The Ld. CIT(A), after considering the submissions of the assessee and the penalty order, noted that certain additions on which penalty had been levied had already been deleted by the Tribunal, and therefore the corresponding penalty could not survive. In respect of the remaining additions, namely, amortization of lease premium and exclusion of foreign income, the Ld. CIT(A) noted that substantial questions of law concerning the said issues had been admitted by the Hon'ble jurisdictional High Court, rendering the claims debatable. Relying, inter alia, upon the judicial precedents referred to in the appellate order, the Ld. CIT(A) held that the penalty in respect of these issues was also not sustainable and accordingly cancelled the same. The Ld. CIT(A), therefore, cancelled the entire penalty of Rs. 564,43,87,905/-.

Aggrieved by the aforesaid order of the Ld. CIT(A), the Revenue is in appeal before the Tribunal.

We have perused the submissions advanced by both sides in light of the records placed before this Tribunal.

In the result, appeal filed by the revenue stands dismissed.

Order pronounced in the open court on 17/08/2026.

Sd/- Sd/- RATNA DASGUPTA BEENA PILLAI ACCOUNTANT MEMBER JUDICIAL MEMBER Mumbai Dated: 17/08/2026 SC, Sr. P.S.

Copy to: DEPUTY COMMISSIONER OF INCOME TAX 2 1 1 MUMBAI, 1 561, AAYAKAR BHAVAN, M K ROAD, MUMBAI-400020, MAHARASHTRA

BANK OF INDIA, C 5 G BLOCK STAR HOUSE 1, BANDRA 2 KURLA COMPLEX, MUMBAI-400051, MAHARASHTRA

3 THE PCIT / CIT, 4 THE D.R., ITAT, MUMBAI BENCH 5 GUARD FILE