ZEE AKAASH NEW PRIVATE LIMITED ,MUMBAI vs. ACIT CENTRAL CIRCLE 2(4), MUMBAI

ITA 6868/MUM/2025Status: DisposedITAT Mumbai08 October 2026AY 2020-2135 pages
AI SummaryDismissed

What were the facts?

The assessee, M/s Zee Akaash News Private Limited, is a television broadcaster. For Assessment Year 2020-21, it declared an income of Rs. 28,95,46,040. Following a survey on January 4, 2021, it was found that the assessee and its associates engaged in transactions with entities providing only entries at inflated prices, such as M/s Mixrex Media & Cable Pvt. Ltd. (MMCPL). Field inquiries revealed MMCPL's premises were shut, its director admitted to signing blank documents for a monthly sum of Rs. 5,000, and the company conducted no business. Summons to MMCPL were returned undelivered. The Assessing Officer (AO) concluded MMCPL was a bogus entity. The assessee agreed to disallow expenses/depreciation/amortization of Rs. 4,07,56,500 related to these transactions, leading to an assessed total income of Rs. 33,03,02,540. Penalty proceedings under Section 270A were initiated, and the Commissioner of Income-tax (Appeals) upheld the penalty of Rs. 2,05,15,192.

What did the Tribunal hold?

The Tribunal held that the assessee's contention that the surrender of bogus expenses (depreciation and amortization) was voluntary was rejected. The Tribunal found that the assessee's claim of buying peace and avoiding prolonged litigation also fell flat, as the Act provides for immunity from penalty under Section 270AA, which the assessee did not opt for. The Tribunal concluded that the assessee's case squarely fell under clauses (a) and (d) of Section 270A(9) of the Act, as the transactions were with bogus, non-existent parties providing entries at arbitrary/inflated prices without any standard operating procedure or business rationale, constituting misrepresentation of a glaring fact. The issue regarding the absence of specific clauses in the show cause notices was rejected as it was not raised before the lower authorities. Consequently, all grounds of appeal were dismissed.

What were the issues?

1. Whether the penalty levied under Section 270A of the Income-tax Act, 1961, for under-reporting in consequence of misreporting is sustainable when the assessee claims to have voluntarily offered the disallowance to avoid litigation and provided bona fide explanations with full disclosure? Assessee's contentions: The assessee argued that the penalty under Section 270A(9) was not leviable as the conditions were not met. They contended that the disallowance was voluntarily offered during survey and assessment proceedings to avoid prolonged litigation, and that they had provided bona fide explanations and disclosed all material facts, referencing Section 270A(6). They also raised an issue regarding the absence of specific clauses of Section 270A(9) in the show cause notices, which they argued should lead to the quashing of the penalty. Reliance was placed on coordinate bench decisions regarding voluntary disclosures, lack of specific penalty charges, and estimation-based additions. Revenue's contentions: The revenue, through the AO and implicitly upheld by the CIT(A), contended that the assessee's case fell under Section 270A(9)(a) (misrepresentation or suppression of facts) and 270A(9)(d) (recording of any false entry in the books of account) due to the use of bogus entities and inflated prices for expenses/depreciation/amortization.

Which sections of the Income-tax Act were involved?

Section 270A,Section 270AA,Section 133(6),Section 131,Section 143(3)

AI-generated summary — verify with the full judgment below

Before: SHRI NARENDER KUMAR CHOUDHRY & SHRI PRABHASH SHANKAR

For Appellant: Shri Madhur Agrawal / Fenil Bhatt, ARs
For Respondent: Shri Basavraj Hiremath, CIT-DR
Hearing: 24.08.2026Pronounced: 08.10.2026

PER PRABHASH SHANKAR [A.M.] :- The instant appeal preferred by the assessee emanates from the order dated 29.08.2025 passed by the Learned Commissioner of Income-tax, Appeal, CIT(A) 48, Mumbai [hereinafter referred to as “CIT(A)”] pertaining to penalty levied u/s. 270A of the Income-tax Act, 1961 [hereinafter referred to as “Act”] for the Assessment Year [A.Y.] 2020-21. P a g e | 2 A.Y. 2020-21 M/s Zee Akaash News Pvt. Ltd.

2.

The grounds of appeal are as un

The order continues below.

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