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TMI Blog2016 (5) TMI 636X X X X Extracts X X X X X X X X Extracts X X X X ..... T(A) has erred in law and on facts in deleting penalty of Rs. 41,51,041/- u/s 271(1)(c) without appreciating facts that the assessee failed to corroborate its claim during the course of assessment proceedings as well as appellate proceedings which goes without saying that the claim made by the assessee is not bona fide. 2. On the facts and in the circumstances of the case, the ld. CIT(A) ought to have upheld the order of the AO. 3. It is, therefore, prayed that the order of the ld. CIT(A) may be set aside and that of the AO may be restored to the above extent. 2. Briefly stated facts as culled out from the records are that the assessee is a limited company engaged in the business of manufacturing and dealing with plastic processing mac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... alty u/s 271(1)(c) of the Act by observing as under :- 2.4. The penalty order and the submission of the appellant have been seen carefully. The assessing officer has imposed penalty of Rs. 41,51,041/-.The penalty has been levied by the assessing officer in respect of the disallowance and addition of(1) Provisions for warranty Rs. 49,53,778/- (2) Alleged Suppression of Sales Rs. 70,11,674/--. The appellant submits that for A.Y. 2003-04 and for A.Y. 2004-05, the Assessing Officer had levied penalty on identical case for disallowance of provision for warranty. The learned Commissioner (Appeals) has deleted the penalty levied for disallowance for warranty for A.Y. 2003-04 as well as for A.Y. 2004-05 by order dated 06/12/2010 and dated 27/02/2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssment was done under the normal procedure. The assessment as per the normal procedure was, however, not acted upon. On the contrary, it is the deemed income assessed under Section 115 JB of the Act which has become the basis of assessment as it was higher of the two. Tax is 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". On appeal by the department to the Supreme Court, Petition(s) for Special Leave to Appeal (Civil) No(s). 18564/2011 is dismissed on 04/05/2012. / 2.5. In the present case of the appellant, the inc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... procedure was less than the income determined by legal fiction namely "book profits" under Section 115JB of the Act. In view of the above discussion and following the order of my predecessors in earlier years, and also on the fact that the appellant case is squarely covered by the decision of the Apex Court in the case of Nalwa sons, the penalty is not leviable The AO is directed to delete the penalty levied of Rs. 41,51,041/--. The ground of the appellant is allowed, 5. Aggrieved, the Revenue is now in appeal before us. 6. The ld. DR relied on the order of Assessing Officer. 7. On the other hand, the ld. AR of the assessee relied on the order of ld. CIT(A) and also referred and relied on the Circular issued by the CBDT vide No.25/2015 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e also observe that SLP filed by the Revenue against the judgment of Hon. Delhi High Court in the case of CIT vs. Nalwa Sons Investment Ltd. (supra) was dismissed by Hon. Supreme Court vide its order dated 4th May, 2012 in SLP to appeal (Civil) No.18564 of 2009 confirming the Delhi High Court's ruling held in the case of CIT vs. Nalwa Sons Investment Ltd. We further find that ld. AR has referred to the CBDT Circular bearing No.25/2015 (supra) dated 31- 12-2015, which has been issued subsequent to the decision of Hon. Delhi High Court in the case of CIT vs. Nalwa Sons Investment Ltd. (supra) which reads as under :- CIRCULAR NO.25/2015 [F.NO.279/MISC./140/2015/ITJ], DATED 31-12-2015 Section 115JB of the Act is a special provision for levy ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... MAT u/s 115JB of the Act. The substituted Explanation 4 is applicable prospectively w.e.f. 1-4-2016. 5. Accordingly, in view of the Delhi High Court judgment and substitution of Explanation 4 of section 271 of the Act with prospective effect, it is now a settled position that prior to 1-4-2016, where the income tax payable on the total income as computed under the normal provisions of the Act is less than the tax payable on the book profits u/s 115JB of the Act, then penalty under section 271(1) (c) of the Act, is not attracted with reference to additions /disallowances made under normal provisions. It is further clarified that in cases prior to 1-4-2016, if any adjustment is made in the income computed for the purpose of MAT, then the l ..... X X X X Extracts X X X X X X X X Extracts X X X X
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