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2017 (6) TMI 490 - ITAT KOLKATA

2017 (6) TMI 490 - ITAT KOLKATA - TMI - Penalty u/s 271(1)(c) - MAT applicability - Held that:- As already observed that in the present case the income of the assessee was charged under the MAT provisions and there is no doubt in this regard. Thus, there is no question for levying the penalty u/s 271(1)(c) for the additions made under the normal provisions of law. We are of the view that imposition of penalty cannot be sustained. The plea of the ld. Counsel for the assessee which is based on the .....

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he Revenue is directed against the order of Commissioner of Income Tax (Appeals)-XII, Kolkata dated 20.01.2014. Assessment was framed by DCIT, Circle-12, Kolkata u/s 271(1)(c) of the Income Tax Act, 1961 (hereinafter referred to as the Act ) vide his order dated 27.04.2012 for assessment year 2009-10. Shri Sauarabh Kumar, Ld. Departmental Representative represented on behalf of Revenue and Shri V.N. Dubey, Ld. Advocate appeared on behalf of assessee. 2. In this appeal the Revenue has challenged .....

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xes under provisions of Minimum Alternate Tax (MAT) u/s 115JB of the Act. In the course of assessment proceedings u/s 143(3) of the Act, the AO noticed that the assessee had not declared capital gain income and deduction claimed u/s 80JJA of the Act was not supported on the basis of necessary documents. The above addition of Long Term Capital Gains income and denial of 80JJA deduction was confirmed by the AO. In respect of the aforesaid addition and denial of deduction in the course of assessmen .....

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s the addition made under the normal provisions of law cannot be subject matter of penalty where the taxes are paid under MAT provisions. The said provisions have been clarified by the CBDT in its circular No. 25/2015 dated 31.12.2015 which reads as under: Subject: Penalty U/S 271(1)(c) wherein additions/disallowances made under normal provisions of the Income Tax Act, 1961 but tax levied under MAT provisions u/s 115JB/115JC, for cases prior to A.Y. 2016-17-reg.- Section 115JB of the Act is a sp .....

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come been reduced by the amount of concealed income or income in respect of which inaccurate particulars had been filed. 3. In this context, Hon'ble Delhi High Court in its judgment dated 26.8.2010 in ITA No.1420 of 2009 in the case of Nalwa Sons Investment Ltd. (available in NJRS as 2010-LL-0826-2), held that when the tax payable on income computed under normal procedure is less than the tax payable under the deeming provisions of Section] 115JB of the Act, then penalty under section 271(l) .....

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s 115JB of the Act. The substituted Explanation 4 is applicable prospectively w.e.f. 01.,04.2016. 5. Accordingly, in view of the Delhi High Court judgment and substitution of Explanation 4 of section 271 of the Act with prospective effect, it is now a settled position that prior to 1/4/2016, where the income tax payable on the total income as computed under the normal provisions of the Act is less than the tax payable on the book profits u/s 115JB of the Act, then penalty under 271(l)(c) of the .....

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ound and appeals already filed, if any, on this issue before various Courts/Tribunals may be withdrawn/not pressed upon. This may be brought to the notice of all concerned. The ld. Counsel for the assessee also drew our attention to the decision of the Hon ble Delhi High Court in the case of CIT vs. Nalwa Sons Investments Limited in ITA No. 1420/2009 dated 26.08.2010 wherein the Hon ble Court took a view that imposing of penalty u/s 271(1)(c) of the Act is bad in law if the taxes are paid under .....

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sment order records as follows:- Assessed at ₹ 40163180 u/s. 115JB, being higher of two. Interest u/s. 234B and 234C has been charged as per the provisions of Income Tax Act, 1961. Penalty proceedings us/s 271(1)(c) of the Income Tax Act, 1961 have been initiated. Issue necessary forms. 24. The income of the assessee was thus assessed under Section 115JB and not under the normal provisions. It is in this context that we have to see and examine the application of Explanation 4. 25. Judgment .....

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court was of the opinion that the tax sought to be evaded will mean the tax chargeable not as if it was 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 co .....

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