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Income Tax Appellate Tribunal, “C” BENCH, AHMEDABAD
Before: SHRI PRADIP KUMAR KEDIA & SHRI MAHAVIR PRASAD
आदेश/O R D E R
PER PRADIP KUMAR KEDIA - AM:
The captioned appeal has been filed at the instance of the Revenue against the order of the Commissioner of Income Tax (Appeals)-1, Vadodara (‘CIT(A)’ in short), dated 08.05.2015 arising in the penalty order dated 30.07.2014 passed by the Assessing Officer (AO) under S. 271(1)(c) of the Income Tax Act, 1961 (the Act) concerning AY 2006-07.
ITA No. 2330/Ahd/15 [DCIT vs. Gujarat Urja Vikas Nigam Ltd.] A.Y. 2006-07 - 2 -
The grounds of appeal raised by the Revenue read as under:
“1. On the facts and circumstances of the case and in law, whether the Ld.CIT(A) was correct by deleting the penalty which was levied on additions as per Income Tax Act, 1961? 2. The Ld.CIT(A) has failed to appreciate the fact that the assessee had furnished inaccurate particulars of income for which penalty u/s.271(1)(c) of the Income Tax Act, 1961 is leviable and the assessee has deliberately tried to pay less tax by furnishing inaccurate particulars of income, thereby making it a fit case for imposition of penalty u/s. 271(1)(c) of the Income Tax Act, 1961?”
The solitary issue involved in the present appeal is towards imposition of penalty of Rs.54,70,000/- under s. 271(1)(c) of the Act.
When the matter was called for hearing, the learned DR for the Revenue relied upon the penalty order passed by the AO on the various disallowances made.
The learned AR for the assessee, on the other hand, referred to the assessment order at the outset and submitted that the penalty has been imposed on account of certain additions/disallowances made while computing the taxable income under the normal provisions whereas the assessment has been ultimately carried out under special provisions of Section 115JB of the Act where the book profit was found to be substantially higher. The learned AR for the assessee thus submitted that where the tax payable as per the MAT provision exceeds qua the tax liability under normal provisions, no concealment can be envisaged under S. 271(1)(c) of the Act. For this proposition, the learned AR relied upon the decision of the Hon’ble Delhi High Court in the case of CIT vs. Nalwa Sons Investments Ltd. [2010] 327 ITR 543 (Del.). The
ITA No. 2330/Ahd/15 [DCIT vs. Gujarat Urja Vikas Nigam Ltd.] A.Y. 2006-07 - 3 -
learned AR also relied upon the decision of the Hon’ble Gujarat High Court in the case of CIT vs. Gujarat State Fertilizers & Chemicals Ltd. [2013] 36 taxmann.com 533 (Gujarat) for the proposition that where the tax required to be paid as per Section 115JB of the Act remained the same, the penalty imposed under s. 271(1)(c) of the Act was rightly deleted. The learned AR next submitted that Explanation (4) to Section 271(1)(c) has been modified by Finance Act, 2015 and is applicable from AY 2016- 17 onwards to cover such situation for imposition of penalty. Such amount is prospective in nature. The learned AR thus contended that the CIT(A) has rightly appreciated the law and facts in perspective and deleted the penalty with which no interference is called for.
We have carefully considered the rival submissions. The short controversy in issue is whether under S.271(1)(c) of the Act can be imposed on the alleged concealment of income by the assessee quantified with reference to the amount of tax sought to be evaded as per the normal provisions of the Act where the tax liability has ultimately arisen on the assessee at ‘deemed income’ as per the special provisions of Section 115JB of the Act. A reference to the decision of the Hon’ble Delhi High Court in the case of Nalwa Sons Investments Ltd. (supra) has been made on behalf of the assessee which squarely covers the issue in favour of the assessee. The subsequent amendment to the Explanation (4) of Section 271(1)(c) also suggests the purport of the existing provisions as applicable in the relevant assessment year. Therefore, we find merit with the appeal of the assessee. The AO is accordingly directed to delete the penalty imposed under
ITA No. 2330/Ahd/15 [DCIT vs. Gujarat Urja Vikas Nigam Ltd.] A.Y. 2006-07 - 4 -
normal provision when the tax liability has been fastened on the assessee under the special provisions of Section 115JB of the Act.
In the result, appeal of the Revenue is dismissed.
This Order pronounced in Open Court on 28/02/2019
Sd/- Sd/- (MAHAVIR PRASAD) (PRADIP KUMAR KEDIA) JUDICIAL MEMBER ACCOUNTANT MEMBER Ahmedabad: Dated 28/02/2019 True Copy S. K. SINHA आदेश क� ��त�ल�प अ�े�षत / Copy of Order Forwarded to:- 1. राज�व / Revenue 2. आवेदक / Assessee 3. संबं�धत आयकर आयु�त / Concerned CIT 4. आयकर आयु�त- अपील / CIT (A) 5. �वभागीय ��त�न�ध, आयकर अपील�य अ�धकरण, अहमदाबाद / DR, ITAT, Ahmedabad 6. गाड� फाइल / Guard file. By order/आदेश से,
उप/सहायक पंजीकार आयकर अपील�य अ�धकरण, अहमदाबाद ।