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TMI Blog2014 (5) TMI 400X X X X Extracts X X X X X X X X Extracts X X X X ..... n after unearthing the concealed income, the assessee ended up paying the same amount of minimum alternative tax u/s 115JB of the Act even after the concealments were unearthed and accepted by the assessee - the implication of Explanation 4 to section 271(1) of the Act must be seen - the assessee's tax liability did not change despite unearthing of concealed income, no penalty could have been levied - simply because before and after the additions the assessee remained a MAT company and paid tax u/s 115JB of the Act or such similar provision, that by itself would mean that no penalty could be imposed - If the effect of the addition of the concealed income results into higher minimum alternative tax by increasing the book profit also, penalty could as well be imposed – Decided against Revenue. - Tax Appeal No. 140 of 2014, Tax Appeal No. 141 of 2014 - - - Dated:- 23-4-2014 - Akil Kureshi And Sonia Gokani,JJ. For the Appellant : Mrs. Mauna M. Bhatt, Advocate For the Respondent : Mr. Tushar P. Hemani, Advocate ORDER (Per : Honourable Mr. Justice Akil Kureshi) 1. Revenue has filed these appeals raising identical questions concerning the same assessee f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Commissioner (Appeals) dismissed such appeal by his order dated June 18, 2010. He observed that unaccounted sales of Rs.46,03,545/was deducted by the Excise Department during the course of the search conducted at the business premises of the assessee. This was also admitted by the Director of the Company in the statement recorded during the search proceedings. The company filed its revised return only after the search. The Assessing Officer had, therefore, rightly come to the conclusion that the assessee had concealed income and furnished inaccurate particulars of the income. 5. The assessee carried the matter in further appeal to the Tribunal. The Tribunal by the impugned judgment dated October 04, 2013 allowed the assessee s appeal. The Tribunal accepted contention of the assessee that even after the additions made during the course of assessment proceedings, the income of the assessee remained Nil and the assessee was liable to pay tax on the book profit under section 115JB of the Act, making following observations : 9. We have heard the rival submission and perused the material on record. It is an undisputed facts that the Assessee was taxed under Section 115JB of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dding the sum of Rs.46,78,545/in the book profit for working out the liability u/s.115JB of the Act. 8.1 During the appellate proceedings, the Ld.A.R. of the appellant objected to the said adjustments and contended that the A.O. has no power to go beyond the adjustments which have been laid down in sec.115JB of the Act while working all the liability for MAT. He also placed reliance in support of his contentions on the decision of Hon'ble Supreme Court in the case of Apollo Tyres Vs. CIT 255 ITR 273. 8.2 I have considered the facts of the case and submissions of the Ld.A.R. carefully. There is no dispute about the fact that the statement of the Managing Director of the appellant and various other persons were recorded by the Central Excise Authorities 31.3.2005 and the books of account of the appellant company were already closed for the purposes of Companies Act. Therefore, the surrender/ disclosure made in the statement can not have any effect on the book profit of the appellant for the purposes of Companies Act. Further, the Hon'ble Supreme Court in the case of Malayala Manorama Co. 300 ITR 251 (SC) has held .. .. It is, therefore, not open to the Assessing Office ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... his income or furnishing of inaccurate particulars of such income. Clause (c) of Explanation 4 to section 271(1) of the Act provides that for the purpose of clause 3 of the said subsection, the expression amount of tax sought to be avoided means the difference between tax on the total income assessed and the tax that would have been chargeable had such total income been reduced by the amount of income in respect of which particulars have been concealed or inaccurate particulars have been furnished. It is in context of such penalty provisions we have to examine the view of the Tribunal bearing in mind the facts of the case. If, therefore, even after the concealment is unearthed or the assessee s act of supplying inaccurate particulars comes to light, the tax liability before or after such concealment or providing of inaccurate particulars remains the same; by virtue of clause (c) of Explanation 4 to section 271(1) of the Act, there would be no penalty imposable. This is so because the penalty is to be computed in terms of the amount of tax sought to be avoided, such expression amount of tax sought to be avoided' is explained in Explanation 4. We have noticed that clause (c) t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of computation of book profit under section 115JB of the Act could have been made. The Commissioner in order to come to such conclusion relied on the decision of the Supreme Court in the case of Apollo Tyres Ltd. v. CIT, reported in (2002) 255 ITR 273 (SC) and Malayala Manorama Co. Ltd. v. CIT, reported in 300 ITR 251, in which it is held that it is not open for the Assessing Officer to rescrutinize the accounts and satisfy that the accounts have been maintained under the provisions of the Companies Act. While computing the income of a company under the provision for minimum alternative tax, the Assessing Officer has only the power of examining whether the books of account are certified by the authorities under the Companies Acts as having been properly maintained in accordance with the Companies Act. The Assessing Officer thereafter has the limited power of making increases and reductions as provided in the Explanation to such provision. 12. To this proposition of the Commissioner, we have serious doubt. In a case like this, when the assessee concealed certain income not only for the purpose of avoiding excise duty, but also incometax, we wonder whether the provisions of sectio ..... X X X X Extracts X X X X X X X X Extracts X X X X
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