आयकर अपील(cid:547)य अ(cid:876)धकरण, हैदराबाद पीठ IN THE INCOME TAX APPELLATE TRIBUNAL Hyderabad ‘B’ Bench, Hyderabad BEFORE SHRI MANJUNATHA G, ACCOUNTANT MEMBER AND SHRI RAVISH SOOD, JUDICIAL MEMBER आ.अपी.सं /ITA No.1295/Hyd/2025 (िनधा१रण वष१/Assessment Year:2020-21)

M/s. Granules India Limited, Dy. Commissioner of Income Hyderabad. Vs. Tax, PAN : AAACG7369K Circle 2(1), Hyderabad.

(Appellant) (Respondent)

िनधा१ौरती (cid:554)ारा/Assessee by: Shri Y.V. Bhanu Narayan Rao, C.A.

राज(cid:830) व (cid:554)ारा/Revenue by: Dr. Sachin Kumar, SR-DR सुनवाई की तारीख/Date of hearing: 22/12/2025 घोषणा की तारीख/Pronouncement: 24/12/2025 आदेश/ORDER PER RAVISH SOOD, J.M:

The present appeal filed by the assessee company is directed against the order passed by the CIT(Appeals), NFAC, Delhi, dated 24.06.2025, which in turn arises from the order passed by the AO under Section 270A of the Income-tax Act, 1961, dated 27.09.2022, for the Assessment Year 2020-21. The assessee company has assailed the impugned order of the CIT(Appeals) on the following grounds of appeal before us:

“1. On the facts and in the circumstances of the case, the learned Commissioner of Income-tax (Appeals), NFAC, Delhi [CIT(A)] erred in law and facts by upholding the penalty of Rs. 82,63,156/- levied by the learned Assessing O icer u/s 270A of the Act, and hence the same needs to be deleted.

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2. On the facts and in the circumstances of the case, the learned CIT(A) failed to appreciate the fact that the impugned claim of deduction of Health and Education Cess by the Assessee company was based on the prevailing judicial pronouncement at the time of filing the return of income u/s. 139(1) of the Act, and as such the same cannot be construed as under reporting of income owing to any subsequent amendments in law and thus, penalty u/s.270A of the Act cannot be levied.

3. On the facts and in the circumstances of the case, the learned Commissioner of Income-tax (Appeals), NFAC, Delhi [CIT(A)] ought to have appreciated the fact that the assessee had given up the claim of education cess of Rs.4,81,53,591/- pursuant to retrospective amendment enacted vide Finance Act, 2022 before the completion of the assessment, and ought to have deleted the penalty levied u/s 270A of the Act.

4. On the facts and in the circumstances of the case, the learned CIT(A) had grossly erred in not considering the fact that the very notification which specified the procedure to surrender the impugned claim of education cess was e ective from 01/10/2022 whereas the impugned assessment order disallowing the impugned claim was passed on Ư27/09/2022, and he ought to have deleted the penalty erroneously levied u/s

270A of the Act.

5. Without prejudice to the above, the learned CIT(A) failed to appreciate the fact that Section 155(18) of the Act specifically provides that the claim for deduction of surcharge or cess shall not be deemed to be under-reported income for the purposes of sub-section (3) of section 270A of the Act if an application is made to the Assessing Officer in the prescribed form e ective 1/10/2022. However, as the form itself was not notified at the time of passing of order u/s.143(3) of the Act, the provisƯions of section 155(18) cannot be applied to levy the penalty u/s.270A of the Act.

6. The assessee company craves your honours leave to add/

alter/ withdraw the above grounds at the time of the hearing”

2. Succinctly stated, the assessee company, which is engaged in the business of manufacturing of pharmaceutical products, had filed its return of income for A.Y. 2020-21 on 15.02.2021, declaring its total income at Rs. 482,98,50,810/- and claiming a refund of Rs. 1,77,09,020/-. The return of income filed by the assessee company was processed under Section 143(1) of the Act, dated 24/12/2021, by the AP/CPC, Bengaluru, wherein its income was determined at Rs. 532,16,26,070/-.

3. Thereafter, the AO framed the assessment vide his order passed under Section 143(3) r.w.s. 144B of the Act, dated 27.09.2022, determining