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Income Tax Appellate Tribunal, AHMEDABAD “D” BENCH
Before: SHRI N.K. BILLAIYA & SHRI MAHAVIR PRASAD
PER N.K. BILLAIYA, ACCOUNTANT MEMBER
This appeal by the Revenue is preferred against the order of the Ld. CIT(A)- XI, Ahmedabad dated 25.10.2013 pertaining to A.Y. 2010-11.
ITA No.44/Ahd/2015 2 . A.Y.2010-11 2. The only grievance of the revenue is that the ld. CIT(A) erred in deleting the penalty of Rs. 34,67,420/- levied u/s. 271(1)(c) of the Act.
The roots for the levy of penalty lie in the assessment order dated 18.03.2013 framed u/s. 143(3) of the Act. While framing the assessment u/s. 143(3) of the Act, the income was assessed at Rs. 39,92,20,834/- as against returned income of Rs. 38,86,31,604/- thereby making addition of Rs. 1,02,01,292/- on account of disallowance of deduction u/s. 10B of the Act.
Penalty proceedings were separately initiated and the assessee was asked to show cause why penalty should not be levied for the excessive claim of deduction u/s. 10B of the Act. Assessee strongly contended that since the tax has been calculated u/s. 115JB of the Act, no penalty u/s. 271(1)(c) of the act is leviable.
The contention of the assessee did not find any favour with the A.O. who levied the penalty of Rs. 34,67,420/- being 100% of the amount of tax sought to be evaded.
Assessee carried the matter before the ld. CIT(A) and reiterated its contention.
After considering the facts and the submissions, the ld. CIT(A) was convinced with the contention of the assessee and drawing support from the decision of the Hon’ble Delhi High Court in the case of Nalwa Sons Investment Ltd. 327 ITR 543. The ld. CIT(A) directed the A.O. to deleted the penalty.
ITA No.44/Ahd/2015 3 . A.Y.2010-11 8. Before us, the ld. D.R. supported the findings of the A.O. Per contra, the ld. counsel for the assessee once again relied upon the decision of the Hon’ble Delhi High Court in the case of Nalwa Sons Investment Ltd. (supra). The ld. counsel further brought to our notice. CBDT Circular No. 25 of 2015 dated 31.12.2015 and pointed out that the CBDT has accepted the said decision of the Hon’ble Delhi High Court and has directed the revenue not to prefer appeals on this issue.
We have given a thoughtful consideration to the orders of the authorities below. We find that the claim of deduction u/s. 10B of the Act was denied under the normal provision of the Act but the assessee has paid tax as per MAT provisions u/s. 115JB of the Act. Therefore, no penalty is leviable u/s. 271(1)(c) of the Act. We also find that the CBDT vide Circular No. 25 of 2015 dated 31.12.2015 has directed the revenue that no appeals on this ground has to be filed and appeals already filed on this issue should be withdrawn/not pressed upon.
Respectfully following the judgment of the Hon’ble High Court of Delhi in the case of Nalwa Sons Investment Ltd. (supra) and considering the directions of the CBDT in the aforestated Circular, we do not find any error or infirmity in the findings of the ld. CIT(A).
Appeal filed by the Revenue is accordingly dismissed.
Order pronounced in Open Court on 08 - 01- 2018 Sd/- Sd/- (MAHAVIR PRASAD) (N. K. BILLAIYA) JUDICIAL MEMBER True Copy ACCOUNTANT MEMBER