Mideast Integrated Steels Ltd

Parties Involved

Facts Summary

The assessee, Mideast Integrated Steels Ltd, filed its Return of Income electronically on 14.12.2017 declaring NIL income and claimed a loss of Rs. 9,74,14,252/-. Later, the return was revised on 28.02.2019 declaring a total income of Rs. 6,82,34,300/-. The return was selected for complete scrutiny assessment, and statutory notices were issued. The Assessing Officer (AO) assessed the total income of the assessee at Rs. 44,51,26,180/- and initiated penalty proceedings under section 270A(2)(a) for underreporting income. However, the penalty proceedings were kept in abeyance till the disposal of the appeal before the ld. CIT(A). The ld. CIT(A) partly allowed the appeal, and both parties went in appeal before the ITAT. The ITAT dismissed the appeal of both parties. On finalization of assessment/appellate proceedings, the AO levied penalty under section 270A(9) @200% of Rs 1,29,62,266/- on account of disallowance of PF/ESI contribution and disallowance of expense. On appeal by the assessee, the CIT(A) deleted the penalty on PF/ESI contribution and partly deleted the penalty on disallowance of expense. Both parties are now in appeal before the ITAT.…

Legal Issues

• 1. Validity of penalty notice for under-reporting or mis-reporting of income under section 270A of the Act.
• 2. Whether penalty can be levied on debatable issues and adhoc disallowances.

Judgment Outcome

Decided in favour of Assessee.

Precedents Relied Upon

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