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2016 (3) TMI 534 - ITAT MUMBAI

2016 (3) TMI 534 - ITAT MUMBAI - TMI - Penalty levied under section 271(1)(c) - assessee paid income tax under section 115JB - Held that:- Since the CBDT vide circular No.25/2015 dated 31.12.2015 has taken a conscious decision not to pursue penalty appeals in respect of the cases, wherein the income was assessed u/s 115JB by following the decision of Hon'ble Delhi High Court Nalwa Sons Investments Ltd [2010 (8) TMI 40 - DELHI HIGH COURT ] we find merit in the contentions of the assessee. Total i .....

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ideration. - Decided in favour of assessee - ITA No.980/Mum/2006 - Dated:- 8-1-2016 - B. R. Baskaran, AM And Amarjit Singh, JM For the Appellant : Shri Vijay C Kothari For the Respondent : Shri K Krishna Murty ORDER Per B. R. Baskaran, AM The appeal filed by the assessee is directed against the order dated 17.11.2005 passed by the ld. CIT(A), Central-I, Mumbai for the assessment year 2001-02 confirming the penalty of 29.10 cr. levied by the AO under section 271 (1)( c ) of the Act. 2. The ld. Co .....

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artial relief. However, the assessee also made additional claim for deduction of ₹ 105 crores relating to the liability incurred for guarantee agreement. The said claim was ultimately allowed by the Tribunal, vide its order dated 30.9.2015 passed in ITA No.746/Mum/2005 (AY-2001-02). The ld.AR submitted that the total income of the assessee would result in negative figure on allowing the additional claim of ₹ 1.05 crores. Accordingly, the ld. AR submitted that the total income is ulti .....

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under the normal provisions. Accordingly, he submitted that the impugned penalty confirmed by the ld.CIT(A) is liable to be cancelled. 5. On the contrary, the ld. DR placed strong reliance on the order passed by the ld. CIT(A). 6. We heard the rival contentions of the parties and perused the record. We notice that the CBDT has recently issued a circular No.25/2015 dated 31.12.2015, wherein the CBDT has accepted the decision rendered by the Hon'ble Delhi High Court in the case of Nalwa Sons I .....

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the Act is a special provision for levy of Minimum Alternate Tax on Companies, inserted by Finance Act 2000 with effect from 1-4-2001. 2. Under clause (iii) of sub-section (1) of section 271 of the Act, penalty for concealment of income or furnishing inaccurate particulars of income is determined based on the "amount of tax sought to be evaded" which has been defined inter-alia, as the difference between the tax due on the income assessed and the tax which would have been chargeable h .....

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section 271(1)(c) of the Act could not be imposed with reference to additions /disallowances made under normal provisions. The judgment has attained finality. 4. Subsequently, the provisions of Explanation 4 to sub-section (1) of section 271 of the Act have been substituted by Finance Act, 2015, which provide for the method of calculating the amount of tax sought to be evaded for situations even where the income determined under the general provisions is less than the income declared for the pu .....

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(1)(c) of the Act, is not attracted with reference to additions /disallowances made under normal provisions. It is further clarified that in cases prior to 1.4.2016, if any adjustment is made in the income computed for the purpose of MAT, then the levy of penalty u/s 271(1)(c) of the Act, will depend on the nature of adjustment. 6. The above settled position is to be followed in respect of section 115JC of the Act also. 7. Accordingly, the Board hereby directs that no appeals may henceforth be f .....

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