Central Coalfields Ltd. Vs ACIT/DCIT (ITAT Ranchi)
The Income Tax Appellate Tribunal (ITAT), Ranchi disposed of two appeals filed by the assessee for Assessment Years 2019-20 and 2020-21 and one appeal filed by the Revenue for Assessment Year 2018-19. The appeals arose from separate orders passed by the National Faceless Appeal Centre (NFAC)/CIT(A). ITA No. 370/Ran/2025 for Assessment Year 2020-21 was treated as the lead case.
The assessee, a Government of India undertaking and subsidiary of Coal India Limited engaged in coal mining, coal washing and sale of different grades of coal, had filed its return of income for Assessment Year 2020-21 declaring total income of ₹3,015,95,03,600. During scrutiny assessment under Section 143(3), the Assessing Officer made additions and disallowances aggregating ₹170,26,20,100 under the heads of repair expenses, CMPDIL charges, environmental and tree plantation expenses, siding maintenance charges, miscellaneous expenses and stripping activity adjustment. Penalty proceedings under Section 270A read with Section 274 were initiated on account of alleged under-reporting of income in consequence of misreporting of income.
The assessee challenged the additions before the CIT(A), who partly allowed the appeal and sustained the remaining additions. Thereafter, the Assessing Officer issued a show cause notice proposing penalty under Section 270A in respect of the additions confirmed by the CIT(A). The assessee requested that the penalty proceedings be kept in abeyance until disposal of its appeal before the ITAT against the quantum additions. The Assessing Officer rejected the request, observing that the Income Tax Act contained no provision preventing imposition of penalty merely because an appeal against the quantum additions was pending. The Assessing Officer subsequently imposed a penalty of ₹58,07,20,000 under Section 270A for under-reporting of income by not offering it for taxation and consequently misreporting income.
