TMI Blog2016 (1) TMI 721X X X X Extracts X X X X X X X X Extracts X X X X ..... -2015 - Pramod Kumar, AM And S. S. Godara, JM For the Appellant : G C Daxini For the Respondent : Sunil Talati ORDER Per Pramod Kumar, AM 1. This appeal, filed by the Assessing Officer, challenges correctness of the order dated 12th October 2011 passed by the learned CIT(A), in the matter of penalty under section 271(1)(c) of the Income Tax Act, 1961, for the assessment year 2005-06. 2. Grievance raised in this appeal is as follows: On the facts and in the circumstances of the case and in law, (i) the learned CIT(A) erred in law in deleting the penalty of ₹ 25,54,890 rightly levied under section 271(1)(c) of the Income Tax Act, in view of the provisions laid down therein; and (ii) the learned CIT(A) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 115JB but the AO had not initiated the penalty in respect of adjustments to the book profits. Relying upon Hon'ble Delhi High Court's judgment in the case of CIT Vs Nalwa Investments Ltd (327 ITR 543), and noting that the assessment is completed under section 115JB and the income assessed under regular provisions is less than book profits, learned CIT(A) deleted the penalty. In addition to this reason, learned CIT(A) also noted that it is only a change of head of income, and that, as held by a coordinate bench of this Tribunal, in the case of DCT vs JMD Advisors Pvt Ltd (124 ITD 223) penalty under section 271(1)(c) cannot be levied in a situation in which there is only a change of the head of income. The penalty was deleted for this ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t be less than but shall not exceed three times of the amount of tax sought to be avoided by the reasons of the concealment of the particulars of his income or furnishing of inaccurate particulars of such income. Clause (c) of Explanation 4 to section 271(1) of the Act provides that for the purpose of clause 3 of the said sub-section, the expression amount of tax sought to be avoided' means the difference between tax on the total income assessed and the tax that would have been chargeable had such total income been reduced by the amount of income in respect of which particulars have been concealed or inaccurate particulars have been furnished. It is in context of such penalty provisions we have to examine the view of the Tribunal beari ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to be evaded? will mean the tax chargeable not as if it were the total income. Once, we apply this rationale to Explanation 4 given by the Supreme Court, in the present case, it will be difficult to sustain the penalty proceedings. Reason is simple. 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 115JB 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 115JB of the Act. Hence, when the computation was made under Section 115JB of the Act, the afore ..... X X X X Extracts X X X X X X X X Extracts X X X X
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