TMI Blog2017 (3) TMI 672X X X X Extracts X X X X X X X X Extracts X X X X ..... e contrary, it is the deemed income assessed u/s. 115JB of the Act which has become the basis of assessment as it was higher of the two. Tax is thus paid on the income assessed u/s. 115JB of the Act. Hence, when the computation was made u/s. 115JB, the concealment had no role to play and was totally irrelevant. Therefore, the concealment did not lead to tax evasion at all. Therefore, penalty u/s. 271(1)(c) of the Act could not be imposed. Also it is on record as appearing in the Ld. CIT(A)’s order that assessee has filed total dividend claimed as exemption u/s. 10(35) of the Act. That further in the order itself in the assessee’s own submission as on record, it is clear that complete and true details in relation to claim made in the return were furnished, details of dividend as well as statement of transactions of mutual fund were duly filed before the AO as and when required. See Nalwa Sons Investments Ltd.[2012 (5) TMI 150 - SUPREME COURT OF INDIA ] - Decided in favour of assessee - I.T.A No.517/Kol/2014 - - - Dated:- 8-3-2017 - Shri M. Balaganesh, AM Shri Partha Sarathi Chaudhury, JM For The Appellant: Ms. Ruchira Kheria, ACA For The Respondent: Shri S. S. Al ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llowance u/s. 94(7) of the Act to the tune of ₹ 1,05,743/- In response to the above notice, the assessee filed detailed submission vide letter dated 19.05.2007 submitting as to why no penalty can be levied in the instant case. Disregarding the said submission, the AO passed order u/s. 271(1)(c) of the Act dated 25.05.2007 imposing penalty to the tune of ₹ 96,020/-. That as appearing in the order of the Ld. CIT(A) the facts observed by the AO is that the relevant assessment was completed u/s. 143(3) of the Act on 24.11.2006 making two additions viz., (i) u/s. 94(7) ₹ 1,05,743/- and (ii) u/s. 14A ₹ 1,61,907/- = ₹ 2,67,650/-. The details of reasons for additions of the above two amounts were discussed in the body of the assessment order and proceedings u/s. 271(1)(c) of the Act was initiated. In response to the notice u/s. 271(1)(c) of the Act the Director of the company submitted written explanation wherein it was claimed that though the additions were made but it only converted returned loss of ₹ 47,160/- to assessed income of ₹ 2,20,490/-. It was also claimed by the assessee that the tax has been paid u/s. 115JB of the act and which has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n held that in order to impose penalty on the assessee, unless the case is strictly covered by the provision, penalty cannot be invoked. Conditions u/s. 271(1)(c) of the Act must exist before the penalty cannot be imposed. In the present case, none of the criterion of the provisions is present and hence, the initiation of penalty u/s. 271(1)(c) of the Act is bad in law and is required to be deleted. The assessee further placed reliance in this regard upon the decision of Hon ble Delhi High Court in the case of CIT Vs. Nalwa Sons Investments Ltd. (2010) 327 ITR 543 (Del) wherein it has been held that when computation was made u/s. 115JB of the Act, the concealment, if any, did not lead to tax evasion at all and, therefore, penalty u/s. 271(1)(c) of the Act could not be imposed. The decision of Hon ble Delhi High Court in the case of Nalwa Sons Investments Ltd., supra has been confirmed by the Hon ble Apex Court vide SLP No.18564/2011 dated 4.5.2012 dismissing the appeal of the department. The assessee further submitted that in the present case complete and true details in order to claim made in the return has been furnished which has duly been accepted by the AO vide order u/s. 143( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ltd., supra and had held the cancellation of penalty imposed by the AO u/s. 271(1)(c) of the Act by placing reliance on the decision of Hon ble Delhi High Court. The Ld. DR, on the other hand, reiterated the submissions as have been forwarded by the subordinate authorities and placed reliance on their respective orders. 6. We have perused the case records, analyse the facts and circumstances of the case and heard the rival contentions. We arrive at our considered view that the case of the assessee is squarely covered by the decision of Hon ble Delhi High Court which was given support by the Hon ble Apex Court in the case of Nalwa Sons Investments Ltd., supra, and furthermore, the jurisdictional Tribunal in the case of Salasar Stock Broking Ltd., supra have also supported the Hon ble Delhi High Court decision and have given relief to the assessee. On perusal of the decision of Nalwa Sons Investments Ltd., supra the analysis of provisions of section 271(1)(c) and Sec. 115JB of the Act seems worth mentioning. The Hon ble High Court had opined as per section 271(1)(c) of the Act the penalty can be imposed when any person has concealed the particulars of income or furnished inaccura ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as been paid u/s. 115JB and which has been accepted by the AO. That, therefore, it is a case where neither concealment has been done nor any inaccurate particulars were furnished and at the same time, the flat situation with regard to section 115JB is clearly covered with the case of the Hon ble Delhi High Court decision in Nalwa Sons Investments Ltd., supra. The Income-tax Act being a welfare legislation and not being a penal legislation it is all the more essential and mandatory in case of imposition of penalty the requirements of statutes must be fulfilled which in case of the assessee were not complied with by the subordinate authorities. Therefore, on considering the totality of facts of the instant case and judicial pronouncements that is the judgment of the Hon ble Delhi High Court and confirmed the same by the Hon ble Apex Court, cited supra and also the decision of jurisdictional Tribunal in the case of Salasar Stock Broking Ltd., supra, we arrive at our considered view that penalty imposed u/s. 271(1)(c) of the Act by the AO and confirmed by Ld. CIT(A) is hereby deleted. Therefore, the grounds of appeal of assessee (ground nos. 1 and 2) are allowed. 7. Ground No. 3 is ..... X X X X Extracts X X X X X X X X Extracts X X X X
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