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TMI Blog2016 (1) TMI 721X X X X Extracts X X X X X X X X Extracts X X X X ..... deleting the penalty of Rs. 25,54,890 rightly levied under section 271(1)(c) of the Income Tax Act, in view of the provisions laid down therein; and (ii) the learned CIT(A) erred in not appreciating the fact that the penalty levied is on addition resulting from deliberate misclassification of income with the intention to evade proper tax. 3. The issue in appeal lies in a very narrow compass of material facts. During the course of the assessment proceedings, the Assessing Officer noticed that the assessee company has shown other income of Rs. 103.66 lakhs, which included, inter alia, interest of Rs. 69.64 lakhs and rent of Rs. 18,000. The Assessing Officer was of the view that this income should be taxed under the head 'income from other ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... penalty under section 271(1)(c) cannot be levied in a situation in which there is only a change of the head of income. The penalty was deleted for this reason also. The Assessing Officer is aggrieved of the penalty being so deleted by the CIT(A) and is in appeal before us. 4. We have heard the rival contentions, perused the material on record and duly considered facts of the case in the light of the applicable legal position. 5. We find that the legal position is fairly well settled that when assessment was made on income computed under section 115JB and tax has been paid on income so computed, penalty under section 271(1)(c) cannot be imposed with reference to the additions that would have been made taking into account concealment made ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ealed 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) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... thus paid on the income assessed under Section 115JB of the Act. Hence, when the computation was made under Section 115JB of the Act, the aforesaid concealment had no role to play and was totally irrelevant. Therefore, the concealment did not lead to tax evasion at all. 26. The upshot of the aforesaid discussion would be to sustain the order of the Tribunal, though on different grounds. Therefore, while we do not agree with the reasoning and approach of the Tribunal, for our reasons disclosed above, we are of the opinion that penalty could not have been imposed even in respect of claim of depreciation made by the assessee. This appeal is accordingly dismissed 6. In view of these discussions, and with the benefit of guidance of Hon'bl ..... X X X X Extracts X X X X X X X X Extracts X X X X
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