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TMI Blog2015 (2) TMI 448X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee company. 2. The Ld. CIT(A) has erred in law and on facts in deleting the above penalty ignoring the fact that the said penalty was imposed only after the quantum addition confirmed by the CIT(A), New Delhi. 3. The Ld. CIT(A) has erred in law and facts in not appreciating the fact that provisions of the Income Tax Act 1961 are applicable in the case of the assessee and not the provision of the Companies Act 1956 even if the tax paid by the assessee as per the Book Profit which is calculated as per the provision of the Companies Act 1956; 4. The Ld CIT(A) has erred in law and on facts in ignoring the provisions of section 115JB (5) of the Act, which clearly mentions that "save as otherwise provided in this section, all other provisi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pellate penalty proceedings, the ld CIT(A) however deleted the said penalty. The ld DR assailed the order of the ld CIT(A) and submitted that the penalty is leviable on the facts of the case. The ld AR supported the order of the ld CIT(A). 8. We have heard both the parties and have perused the records of the case. The ld CIT(A) has deleted the penalty by holding as under:- "4.1 I have carefully considered the facts of the case, the findings of the A.O. as well as the submissions of the appellant. All the grounds of appeal are directed against penalty of Rs. 104,68,13,101/- imposed by the A.O. u/s 271(l)(c) of the l.T. Act. The appellant company is a wholly owned subsidiary of Oil and Natural Gas Corporation Limited, a Public Sector Undert ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng interest in production sharing agreement. CIT(A) confirmed addition on the above two issues to the extent of Rs. 284,84,71,023/-. The appellant filed appeal before lTAT against the order of Ld. CIT (A) which is pending before ITA T and is yet to attain finality. Consequent to the additions confirmed by Id. C!T(A) the A.O. imposed penalty under section 271(1)(c) read with 274 of the Act of Rs. 104,68,13,101/- on the appellant based on the additions/disallowance upheld by the Ld. CIT(A) in the quantum appeal being 100% of tax sought to be evaded. 4.3 There is no dispute in the present case, that the income computed as per the normal procedure was less than the income determined by legal fiction namely 'book profits' under section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ome been reduced by the amount of concealed income. Thus, the penalty is levied on the basis of tax on the difference between the income assessed and the income returned. 4.4 On this principle, the penalty could not be imposed in the present case as the assessee had paid the tax at deemed income under section 115JB of the Act, which income was more than the income assessed as per normal procedure. Where income of an assessee company is finally assessed at 'book profits' by deeming the same to be total income of the assessee, penalty imposable under section 271 (I )(c) of the Act could only be levied in respect of any adjustment/addition/disallowance made while computing such 'book profits'. In such a situation, the A.O. can ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re, therefore, became academic. Reading of the provisions of see 115JB shows that the book profits "shall be deemed to be the total income of the assessee". There could not be any concealment in the instant case since whatever had been declared by the assessee as book profits was accepted by the A.O. Therefore, there I could not be any complaint of concealment. The deeming provisions of see 115JB deeming the book profits as total income, will also apply for determining if there was any concealment or not Reliance in this regard is placed on the decisions of Hon'ble Jurisdictional Delhi High Court in the case CIT vs. Nalwa Sons Investments Ltd. 194 Taxman 387 (Delhi) and Hon'ble ITAT Delhi in the case of Jindal Polyster and Steel Ltd ..... X X X X Extracts X X X X X X X X Extracts X X X X
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