2010 (8) TMI 40 - DELHI HIGH COURT

MAT – Minimum alternate tax – adjustments to book profit by AO – Penalty consequent to such adjustments - penalty proceedings be initiated against the assessee – AO confirmed penalty equal to Rs. 90,97,415/- in respect of the additions holding that the assessee had furnished inaccurate particulars of the income which fell within the purview of the Section 271 (1) (c) of the Act and Explanation 1 thereto. – Held that: - The income of the assessee was thus assessed under Section 115 JB and not under the normal provisions. It is in this context that we have to see and examine the application of Explanation 4. - No doubt, there was concealment but that had its repercussions only when the assessment was done under the normal procedure. The assessment as per the normal procedure was, however, not acted upon. On the contrary, it is the deemed income assessed under Section 115 JB of the Act which has become the basis of assessment as it was higher of the two. Tax is thus paid on the income assessed under Section 115 JB of the Act. Hence, when the computation was made under Section 115 JB of the Act, the aforesaid concealment had no role to play and was totally irrelevant. Therefore, the concealment did not lead to tax evasion at all. – Penalty not to be imposed.