2023 (3) TMI 667 - AT - Income Tax

Penalty u/s 271(1)(c) - assessee was subjected to pay taxes u/s. 115JB - Levy of penalty deleted by CIT(A) - HELD THAT - CBDT vide circular dated 31.12.2015 has held that where the Income Tax is payable on the basis of book profit u/s.115JB of the Act then penalty u/s. 271(1)(c) is not attracted with reference to the additions disallowances made under normal provisions The issue in the present ground is with respect to th. We find that the CIT(A) after considering the submissions of the assessee has given a finding that assessee was subjected to pay taxes u/s. 115JB of the Act even after taking into consideration all the additions made by the AO in the assessment order. He thereafter by relying on the CBDT circular held that the penalty u/s. 271(1)(c) was not leviable. Before us Revenue has not pointed to any fallacy in the findings of CIT(A) nor has demonstrated that the reliance placed by CIT(A) on the CBDT circular (supra) is misplaced. In such a situation we find no reason to interfere with the order of CIT(A) and thus grounds of Revenue is dismissed.

Summary

Issues involved:
The judgment involves the appeal against the separate Orders of the Ld. CIT(A)-27, Delhi, for Assessment Year (A.Y.) 2012-13 and A.Y. 2013-14, regarding the levy of penalty under section 271(1)(c) of the Income Tax Act, 1961.

A.Y. 2012-13:
The assessee, a company engaged in manufacturing, filed a return of income for A.Y. 2012-13. The Assessing Officer (AO) made various additions to the total income, leading to the imposition of a penalty under section 271(1)(c) of the Act. The CIT(A) deleted the penalty relying on a CBDT circular stating that penalty is not attracted when tax payable under normal provisions is less than tax payable under section 115JB. The Revenue appealed, contending that the CIT(A) erred in applying the circular and canceling the penalty.

A.Y. 2013-14:
Similar to A.Y. 2012-13, the Revenue challenged the CIT(A)'s decision to delete the penalty imposed by the AO under section 271(1)(c) for A.Y. 2013-14. The Revenue argued that the CIT(A) wrongly relied on the CBDT circular and that the penalty should not have been canceled.

Judgment:
The ITAT Delhi upheld the CIT(A)'s decision in both appeals, dismissing the Revenue's contentions. The Tribunal found that the CIT(A) correctly applied the CBDT circular, which states that penalty under section 271(1)(c) is not leviable when tax payable under section 115JB exceeds tax payable under normal provisions. The Tribunal noted that the Revenue failed to demonstrate any error in the CIT(A)'s findings or the application of the circular. Consequently, the appeals of the Revenue for both A.Y. 2012-13 and 2013-14 were dismissed, affirming the deletion of the penalties imposed by the AO.

Separate Judgment by Judges:
No separate judgment was delivered by the judges in this case.