ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE, SHILLONG, SHILLONG vs. MEGHALAYA POWER TRANSMISSION CORPORATION LIMITED, LUMJINGSHAI, SHILLONG

PDF · subscribers
ITA 308/GTY/2025Status: DisposedITAT Guwahati13 March 2026AY 2016-175 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal disagreed with the Ld. CIT(A)'s conclusion and set aside the order, restoring the AO's order. The Tribunal found that the penalty was imposed under Section 271(1)(c) for claiming wrong brought forward losses and their set-off, which were not permissible under the Income-tax Act, 1961. The Tribunal held that these disallowed losses constituted the furnishing of inaccurate particulars of income by the assessee. The Tribunal observed that the Ld. CIT(A) deleted the penalty by solely relying on the assessee's claim that the current year's loss was not intentional and was due to technical reasons, citing the Reliance Petro products case. However, the Tribunal opined that the assessee had wrongly claimed the loss, which was not allowable, and thus furnished inaccurate particulars of income that were not genuine. Therefore, the Tribunal found the AO's imposition of penalty to be justified. The operative direction was to restore the order of the Assessing Officer.

What were the facts?

The Revenue is in appeal against the order of the National Faceless Appeal Centre (NFAC), Delhi, dated 11.09.2025, for Assessment Year 2016-17. The appeal challenges the deletion of a penalty of ₹1,00,78,595/- imposed by the Assessing Officer (AO) under Section 271(1)(c) for furnishing inaccurate particulars of income related to the carry forward of losses. The assessee, Meghalaya Power Transmission Corporation Limited, initially declared a total loss of ₹2,98,51,729/-. The assessment was completed at a loss of ₹2,74,27,701/-. Subsequently, the Principal Commissioner of Income Tax (PCIT) invoked Section 263, directing a fresh adjudication. The AO observed that the assessee filed a belated return under Section 139(4) with a tax audit report, making the business loss claimed not allowable under Section 80IA. The AO also noted that the carry forward of business loss of ₹43,33,71,531/- was not as per the Act. Consequently, the AO imposed a penalty under Section 271(1)(c) for furnishing inaccurate particulars of income, amounting to ₹1,00,78,595/-.

What were the issues?

1. Whether the deletion of penalty under Section 271(1)(c) by the Ld. CIT(A) for furnishing inaccurate particulars of income concerning the carry forward of losses is justified, considering the assessee filed a belated return under Section 139(4)? (Question of law and fact, turning on Sections 271(1)(c), 139(4), 80IA, 72, 73, and 73A of the Income-tax Act, 1961). Assessee's contentions (as per Ld. CIT(A)'s order): The assessee argued that the loss of ₹43,33,71,531/- was a combined brought forward loss as of AY 2016-17 and was allowed to be carried forward even if the current year's return was not filed on time. They submitted that the return was filed belatedly under Section 139(4) and the system automatically populated the 'Schedule CFL' with the loss amount, with no option to delete it. They claimed there was no malafide intention to claim an unallowable loss, and the Income Tax Department's system would not allow its carry forward. They relied on CIT v. Reliance Petro products Pvt. Ltd. (2010) 322 ITR 158 (SC), stating that making an unsustainable claim does not automatically amount to furnishing inaccurate particulars unless false or mala fide. Revenue's contentions (as per Tribunal's observation): The Revenue contended that the assessee wrongly claimed the loss, which was not allowable, thereby furnishing inaccurate particulars of income that were not genuine.

Which sections of the Income-tax Act were involved?

Section 271(1)(c),Section 139(4),Section 80IA,Section 72,Section 73,Section 73A,Section 143(3),Section 263,Section 144,Section 144B

AI-generated summary — verify with the full judgment below

Cases cited in this judgment(1)Show list

Detected automatically from the text. Citations are also linked where they appear in the judgment. The count shows how many other judgments on BharatTax rely on the same authority.

Income Tax Appellate Tribunal, GAUHATI BENCH, GUWAHATI

Before: SHRIDUVVURU RL REDDY, VP & SHRI RAJESH KUMAR, AM

This is an appeal preferred by the Revenue against the order of the National Faceless Appeal Centre, Delhi (hereinafter referred to as the “Ld. CIT(A)”] dated 11.09.2025 for the AY 2016-17.

2.

The only issue raised by the Revenue is against the order of ld. CIT (A) deleting the penalty of ₹1,00,78,595/- as imposed by the ld. AO for furnishing inaccurate particulars of income in respect of carry forward of losses.

3.

The facts in brief are that the assessee filed the return of income on 17.10.2016, declaring total loss of ₹2,98,51,729/-. The assessee is mainly engaged in the activity of power transmission. The

4.

In the appellate proceedings, the ld. CIT (A) deleted the penalty by observing and holding as under:-

“The penalty order, the grounds of appeal and the submission have been perused. It is seen that the penalty u/s 271(1)(c) has been imposed for furnishing of inaccurate particulars of two amounts (i) an amount of Rs 6,31,275/- In respect of disallowances made by the AO to the extent sustained in appeals (ii) an amount of Rs.2,98,51,729/- which the AO had held as wrongly claimed loss in the belated Return filed u/s 139(4). I find that the appellant has pressed for the grounds related to the second amount only. It has been submitted by the appellant as follows: In this case the assessee, being Meghalaya Power Transmission Corporation limited (MePTCL) is mainly engaged eaming income from power transmission

6.

In the result, the appeal of the Revenue is allowed.

Order pronounced on 13.03.2026.

More judgments on Section 271(1)(c)

All 25,141 judgments and leading authorities on Section 271(1)(c) →

Recent GST High Court judgments

Search GST case law →