TMI Blog2014 (4) TMI 207X X X X Extracts X X X X X X X X Extracts X X X X ..... held that no penalty u/s 271(1)(c) of the Act can be levied when the income u/s 115JB of the Act is higher than the assessed income. well reasoned order passed by the Ld. CIT (A) following 'Nalwasons Investments Ltd.' (supra), is hereby upheld- Decided against Revenue. Evasion of Tax - Provisions of Section 115JB (5) of Act – Held that:- no evasion of tax in this case as tax was paid on basis of 115JB calculations as returned by appellant at a total income of Rs.99,74,805/- - While assessment was completed on an income of Rs.7,65,780/- as per normal provisions which is lower than income declared u/s 115JB. Since there is no evasion of tax, penalty levied for furnishing inaccurate particulars of income is not sustainable – Rightly found ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat the matter can be proceeded with in the absence of the assessee, we are doing so. 3. The facts are that the assessee company manufactures engineering plastics. For the year under consideration, return of income was filed on 29.09.2008, declaring nil income under the normal provisions of the IT Act and that of Rs. 99,74,805/- u/s 115JB thereof. Assessment order u/s 143 (3) of the Act was passed on 16.12.2010, after making disallowance of Rs. 77,65,776/- u/s 80IC of the Act, as per the normal provisions thereof. No such addition, however, was made in the computation of income u/s 115JB of the Act. The assessee, as such, paid tax on the higher income computed u/s 115JB of the Act. The assessee did not file any appeal against the disallow ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessee had clearly claimed excess deduction u/s 80IC of the Act, which would have gone unnoticed if the case would not have come under scrutiny and the Assessing Officer had not detected the bogus claim of the assessee, which had been made with the intent to reduce the tax liability. 4. By virtue of the impugned order, the Ld. CIT (A) deleted the penalty. 5. The Ld. DR has contended that the Ld. CIT (A) has erred in deleting the penalty u/s 271(1)(c) of the Income Tax Act 1961 amounting to Rs.2,36,626/- imposed for furnishing inaccurate particulars of its income; that the Ld. CIT (A) has erred in not appreciating the fact that the provisions of the Income Tax Act 1961 are applicable in the case of the assessee and not the provisions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . The Ld. CIT (A), it is seen, while deleting the penalty, has followed the decision in 'CIT vs. Nalwasons Investments Ltd.', 327 ITR 543 (Del). Therein, it has been held that no penalty u/s 271(1)(c) of the Act can be levied when the income u/s 115JB of the Act is higher than the assessed income. In the present case, as rightly found by the Ld. CIT (A), the income of the assessee u/s 115JB of the Act was of Rs. 99,74,805/-. The assessed income, on the other hand, was at a lower figure of Rs. 7,65,776/-. Therefore, the Ld. CIT (A) has correctly followed the decision in 'Nalwasons Investments Ltd.' (supra). No decision to the contrary has been brought to our notice. 8. It is, thus, settled that penalty u/s 271(1)(c) is leviable only if hig ..... X X X X Extracts X X X X X X X X Extracts X X X X
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