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2020 (1) TMI 1170 - ITAT MUMBAIPenalty u/s 271(1)(c) - tax payable on income computed under normal provisions of the Act is less than, the tax payable under the deeming provisions of section 115JB - HELD THAT:- We find that the Hon’ble Delhi High Court, in the case of Nalwa sons Investments Ltd. Vs CIT [2010 (8) TMI 40 - DELHI HIGH COURT] held that when, the tax payable on income computed under normal provisions of the Act is less than, the tax payable under the deeming provisions of section 115JB then penalty u/s 271(1)(c) could not be imposed with reference to additions/disallowances made under normal provisions of the Act - CBDT had issued a circular No. 25/2015, dated 31/12/2015, where it has accepted the judgment of Hon’ble Delhi High Court and accordingly, issued a circular explaining the position of law before insertion of Explanation 4 to sub section (1) of section 271(1)(c) of the I.T. Act, 1961 by the Finance, Act, 2015, which provide for method of calculating the amount of tax sought to be evaded for situations, where the income determined under the normal provision is less than the income declared for the purpose of MAT provisions u/s 115JB - where the income tax payable on the total income as computed under the normal provisions of the Act is less than the tax payable on the book profits u/s 115JB of the Act, then penalty u/s 271(1)(c) of the Act is not attracted with reference to additions/disallowances made under normal provisions of the Act. In this case, it is an admitted fact that the Ld. AO has made additions towards unexplained cash credit u/s 68 of the Act to income computed under normal provisions of the Act. Further, even after additions, the tax payable under normal provisions of the Act is less than, the tax payable under the provisions of section 115JB of the I.T. Act, 1961. Therefore, we are of the considered view that penalty u/s 271(1)(c) of the Act, cannot be levied with reference to additions/ disallowances made to total income computed under normal provisions of the Act. Hence, we direct the Ld. AO to delete penalty levied u/s 271(1)(c) - Decided in favour of assessee.
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