TELEDIAGNOSYS SERVICES PVT. LTD.,PUNE vs. INCOME-TAX OFFICER,

आदेश / ORDER

PER R.S.SYAL, VP : These three appeals by the assessee are directed against the orders passed by the ld. CIT(A) confirming the imposition of penalty u/s. 271(1)(c) of the Income Tax Act, 1961 (hereinafter called as ‘the Act’) in relation to the assessment years 2009-10 to 2011-12. Since common issue is raised in all these appeals, we are, therefore, proceeding to dispose them off by this consolidated order for the sake of convenience.

ITA No.1079/PUN/2016 - A.Y. 2009-10

provisions of section 115JB of the Act and held the assessee to be

chargeable to tax on the total income computed on the touchstone of

such provision. That is how, the total income of Rs.19,83,846/- was

computed. Thereafter, penalty was imposed on the ground that the

assessee did not declare income u/s.115JB of the Act. The Ld. CIT(A)

echoed the view canvassed by the AO in levying the penalty under this

provision. The assessee is aggrieved by the confirmation of such

penalty.

record, it is noticed that the assessee computed Nil income under

regular provisions of the Act by showing the income before the

deduction u/s.10B at Rs.20,28,471/- and thereafter claiming deduction

under this provision for the equal amount. The AO has not disputed

the correctness of the total income before or the otherwise eligibility of

the assessee to deduction u/s.10B on such amount. The only basis for

imposition of penalty is the computation of income u/s.115JB of the Act

de hors the computation of income under the regular provisions of the

Act. In our considered opinion, this cannot be a case for imposition of

penalty.

Act in the backdrop of the fact that its 100% income was eligible for

deduction u/s 10B and on such basis the applicability of the provisions

of section 115JB did not result into computation of any positive `book

profit’ as per the provisions of clauses (f) and (ii) of Explanation 1 to

section 115JB as existing before amendment by the Finance Act, 2007 w.e.f. 01-04-2008. In such pre-amendment era, the amount of

expenses and revenue relatable to the income covered u/s. 10B etc.

were liable to be added or subtracted from the amount of net profits for

computing `book profit’ u/s.115JB of the Act, thereby not producing

any positive `book profit’ under this provision despite there being excess

of revenue over expenditure in the eligible unit. It was on the omission,

inter alia, of the words `section 10B’ in the above two clauses of the

Explanation 1 to section 115JB of the Act that the positive `book profit’

came to be computed despite 100% deduction u/s 10B of the Act in

case of excess of revenue over expenses in the eligible unit. The

assessee, as in the past, was under bona fide presumption that the

pre-amendment position was prevalent and even the auditor did not

point out the effect of amendment in the audit report given under the

provisions of sub-section (4) of section 115JB. This shows that the

auditor, who was supposed to compute the correct amount of `book

profit’ in accordance with Explanation 1 to section 115JB(2) was

oblivious to the amendment and did not report the correct amount of

`book-profit’. As and when the correct position was confronted by the

AO, the assessee accepted the position without challenging it before the

first appellate authority.

relevant particulars of its income and never intended to conceal or

furnish inaccurate particulars of its income. It was on the basis of such

facts declared by the assessee that the AO came to know about the

applicability of section 115JB of the Act and the computation of positive

`book-profit’ chargeable to tax. The Hon’ble Supreme Court in CIT Vs.

Reliance Petroproducts Pvt. Ltd. (2010) 322 ITR 158 (SC) has held that when the assessee furnishes all the relevant details in the return of

income, which are not found to be inaccurate, any addition made

thereafter cannot be viewed as concealment of income and as such, no

penalty can be imposed u/s. 271(1)(c) of the Act. The Mumbai Bench of

the Tribunal in ACIT Vs. Rahat Industries Ltd. (ITA No.2543/Mum

/2011) vide its order dated 10-02-2012 has deleted the penalty imposed

by the AO u/s. 271(1)(c) of the Act when the assessee declared Nil

income after claiming deduction u/s.80IC but the AO computed positive

income u/s.115JB of the Act. Similar view has been taken by another

Bench of the Mumbai Tribunal in ACIT Vs. Trends Holdings &

Consultancy Pvt. Ltd. (ITA No.7379/Mum/2013) vide its order dated 28-

02-2017. Copies of such orders of Tribunal have been placed on record.

precedents, we are of the considered opinion that the penalty was

wrongly levied and confirmed. We, therefore, overturn the impugned

order and order for deletion of penalty.

ITA Nos.1080 & 1081/PUN/2016 - A.Yrs. 2010-11 & 2011-12

of these appeals are mutatis mutandis similar to those of the appeal for

the A.Y. 2009-10. In fact, both the sides adopted the arguments made

by them in appeal for the A.Y. 2009-10 and no separate submission was

put forth. Following the view taken herein above, we set-aside the

impugned orders and order to delete the penalty.

5 .,

Order pronounced in the Open Court on 31st October, 2018.

Sd/- Sd/- (VIKAS AWASTHY) (R.S.SYAL) �याियक �याियक सद�य �याियक �याियक सद�य सद�य /JUDICIAL MEMBER उपा�य� सद�य उपा�य� उपा�य�/ VICE PRESIDENT उपा�य� पुणे Pune; �दनांक Dated : 31st October, 2018 सतीश

आदेश क� ��त�ल�प अ�े�षत/Copy of the Order is forwarded to : 1. अपीलाथ� / The Appellant; 2. ��यथ� / The Respondent; 3. आयकर आयु�त(अपील) / The CIT (Appeals)-5, Pune. 4. आयकर आयु�त / The Pr. CIT-4, Pune �वभागीय ��त�न�ध, आयकर अपील�य अ�धकरण, पुणे “बी बी बी” / DR ‘B’, बी 5. ITAT, Pune; 6. गाड� फाईल / Guard file. आदेशानुसार/ BY ORDER,स // True Copy // // True Copy // Senior Private Secretary आयकर अपील�य अ�धकरण ,पुणे / ITAT, Pune*