INU EXPORTS PRIVATE LIMITED,MUMBAI vs. ITO 12(2)(2), MUMBAI, MUMBAI

ITA 4070/MUM/2025Status: DisposedITAT Mumbai02 January 2026AY 2017-18Bench: SHRI PAWAN SINGH (Judicial Member), SMT. RENU JAUHRI (Accountant Member)4 pages
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What did the Tribunal hold?

The Tribunal held that merely treating a business loss as a speculative loss, which was a change in the head of loss and not due to concealment or inaccurate particulars of income, does not automatically warrant the inference of under-reporting of income. The penalty proceedings are separate from the quantum assessment and require the AO to show a wilful act of under-reporting.

What were the facts?

The assessee-company reported a loss of Rs. 87.92 crore for AY 2017-18, which was selected for scrutiny. The Assessing Officer (AO) treated a debit of Rs. 87.83 crore as a speculative loss instead of a normal business loss, disallowing it and initiating penalty proceedings under section 270A. The AO levied a penalty of Rs. 15,19,85,920/- for under-reporting income.

What were the issues?

Whether penalty under section 270A is leviable for treating a business loss as speculative loss without proof of concealment or inaccurate particulars of income.

Which sections of the Income-tax Act were involved?

Section 270A,Section 274,Section 143(3),Section 154

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IN THE INCOME TAX APPELLATE TRIBUNAL “C” BENCH, MUMBAI Mumbai, Maharashtra - 400067. Mumbai – 400020. [PAN: AAACI 6806 M] Appellant / Assessee Respondent / Revenue

Assessee by Shri Shubham Mittal, CA (virtually appear) Revenue by Shri R.A. Dhyani, CIT - DR Date of Institution 09.06.2025 Date of hearing 03.11.2025 Date of pronouncement 02.01.2026

Order under section 254(1) of Income Tax Act

PER PAWAN SINGH, JUDICIAL MEMBER:

1.

This appeal by assesseeis directed against the order of ld. CIT(A) / NFAC

dated 18.04.2025 for A.Y. 2017-18 in confirming penalty levied under section 270 of the Income Tax Act. The assessee has raised following grounds of appeal:

1.

The ld. AO was not justified in passing the order, which is bad in law, void ab initio, barred by limitation, illegal, contrary to the facts and circumstances of the case, liable to be annulled.

2.

The ld. CIT(A) was not justi9fied in confirming the order which is

The order continues below.

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