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TMI Blog2015 (2) TMI 669X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessment year 2007-08, claiming the following substantial questions of law : "(a) Whether the hon'ble Income-tax Appellate Tribunal is justified in law in deleting the penalty under section 271(1)(c) of the Act imposed by the Assessing Officer as the assessee filed the return of income without computing the correct tax liability under section 115JB read with section 10(38) of the Act and, thus, failed in disclosing the true and correct tax liability under section 115JB of the Act ; the hon'ble Income-tax Appellate Tribunal failed to appreciate the fact that the assessee-company filed a revised computation of income only after detection of concealment by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a revised computation of income and Form No. 29B on December 4, 2009. The book profit of the assessee was computed at Rs. 4,77,25,617 and the tax liability under section 115JB of the Act was computed at Rs. 47,72,562 (10 per cent. of the book profit). The Assessing Officer, vide order dated December 18, 2009 (annexure A-I) framed assessment and initiated penalty proceedings under section 271(1)(c) of the Act. The assessee did not challenge the assessment order in appeal. Thereafter, a penalty of Rs. 13,58,452 was imposed upon the assessee, vide order dated June 28, 2010 (annexure A- II). Feeling aggrieved, the assessee filed an appeal before the Commissioner of Income-tax (Appeals) (for brevity "the CIT(A)") who, vide order dated March 10, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as under a bona fide belief, unaware of the amendment whereby a proviso was inserted, the long-term capital gains on the shares was not taken into consideration while determining the book profits under section 115JB of the Act. It was stoutly argued that the Tribunal has rightly placed reliance upon Reliance Petroproducts Ltd.'s case (supra) and deleted the penalty. 5. After hearing learned counsel for the parties, we find considerable force in the submissions made by the learned counsel for the respondent. The Tribunal, while deleting the penalty, had noticed as under : "4. Having gone through the orders of the authorities below we find that during the course of the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee before the learned Commissioner of Income-tax (Appeals) remained that the proviso to section 10(38) of the Act was inserted with effect from April 1, 2007, and prior to that long-term capital gains on shares was not to be considered for applicability of MAT provisions. When this amendment came to the knowledge of the assessee, it immediately obtained the auditors report in Form No. 29B and filed the same along with the revised computation of income. It was accordingly argued that the assessee had neither concealed the particulars of income nor furnished inaccu rate particulars of income so as to attract the provisions of section 271(1)(c) of the Act. We do not have any reason to doubt bona fide of the assessee in the above explanation. I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The said proviso reads thus : "Provided that the income by way of long-term capital gains of a company shall be taken into account in computing the book profit and Income-tax payable under section 115JB." 7. According to it, the long-term capital gains on shares is to be included while determining the book profits. It was for the first time that for the assessment year 2007-08 onwards, the aforesaid provision became applicable. The plea of the assessee regarding the bona fides has been accepted by the Tribunal. There is nothing to doubt the veracity of the aforesaid findings recorded by the Tribunal. 8. In view of the above, no question of law much less a substanti ..... X X X X Extracts X X X X X X X X Extracts X X X X
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