2012 (1) TMI 254 - AT - Income Tax

Summary

Issues involved: Appeal against penalty u/s 271(1)(c) in relation to assessment year 2007-2008.

Summary:

Issue 1: Imposition of penalty u/s 271(1)(c) based on MAT provisions u/s 115JB

The appellant filed a return declaring total income of Rs. Nil and claimed a refund of Rs. 1.54 crore. The Assessing Officer finalized the assessment u/s 143(3) by applying the MAT provisions u/s 115JB, resulting in a tax payable of Rs. 1,37,60,481. The penalty u/s 271(1)(c) was imposed based on the difference between the income offered and the income finally assessed. The CIT(A) upheld the penalty order. However, the Tribunal referred to precedents where it was established that section 115JB cannot be applied to a foreign bank, similar to the appellant. Consequently, the penalty was deemed invalid, and the order for its deletion was issued.

Decision: The appeal was allowed, and the penalty u/s 271(1)(c) was deleted.