DCIT Vs Uranium Corporation of India Limited (ITAT Ranchi)
In a significant ruling, the Income Tax Appellate Tribunal (ITAT), Ranchi bench, has dismissed an appeal filed by the Deputy Commissioner of Income Tax (DCIT) against Uranium Corporation of India Limited (UCIL). The appeal challenged the decision of the National Faceless Appeal Centre, Delhi (NFAC), which had deleted a penalty of ₹1,28,22,090/- levied on UCIL under Section 270A of the Income Tax Act, 1961, for the assessment year 2018-19. The Tribunal’s decision, pronounced on June 10, 2025, underscores the nuanced application of penalty provisions, particularly in cases involving inadvertent errors and companies operating under the Minimum Alternate Tax (MAT) regime.
Background of the Dispute
Uranium Corporation of India Limited, a public sector undertaking operating under the Department of Atomic Energy, is engaged in the crucial activities of querying and mining. For the assessment year 2018-19, UCIL filed its return of income declaring a substantial loss of ₹75,86,55,618/-. The case was subsequently selected for scrutiny under the Computer Assisted Scrutiny Selection (CASS) system, leading to the issuance of statutory notices by the Assessing Officer (AO).
Following the assessment proceedings, the AO, vide an order dated March 22, 2021, assessed UCIL’s loss at a reduced figure of ₹73,85,52,574/- under Section 143(3) read with Sections 143(3A) and 143(3B) of the Act. Crucially, the AO also imposed a penalty of ₹1,28,22,090/- under Section 270A of the Act, asserting that the company had “underreported its income” for the relevant assessment year. The basis for this penalty was the claim of certain expenses, specifically Corporate Social Responsibility (CSR) expenditure, which the AO deemed “wrong,” leading to an increase in the declared business loss. The revenue’s contention was that such an increase in loss, if carried forward, could be set off against future incomes, thereby adversely impacting government revenue.
