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TMI Blog2014 (8) TMI 1144X X X X Extracts X X X X X X X X Extracts X X X X ..... imed would not render the assessee liable to penalty under section 271(1) (c) of the Act on account of false claim of expenses. - Decided in favour of assessee. - ITA No. 346 of 2013 ( O&M ) - - - Dated:- 4-8-2014 - Ajay Kumar Mittal And Fateh Deep Singh, JJ. Mr. Rajesh Katoch, Advocate for the appellant ORDER Ajay Kumar Mittal,J. 1. This appeal has been preferred by the revenue under Section 260A of the Income Tax Act, 1961 (in short, the Act ) against the order dated 14.6.2013, Annexure A.IV passed by Income Tax Appellate Tribunal, Chandigarh Bench A , Chandigarh (in short, the Tribunal') in ITA No.988/CHD/2012, for the assessment year 2005-06, claiming following substantial questions of law:- i) Whether on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -06 on 28.10.2005 declaring nil income. The assessee paid tax under section 115JB of the Act on book profit of ` 23,80,40,824/-. The Assessing Officer completed assessment under section 143(3) of the Act on 28.12.2007, Annexure A.1 at nil income. Penalty under section 271(1)(c) of the Act was imposed vide order dated 23.3.2011, Annexure A.II for furnishing inaccurate particulars for treating the sales tax subsidy/exemption amounting to ` 4,09,86,935/- as capital receipt instead of revenue receipt. Aggrieved by the order, the assessee filed appeal before the Commissioner of Income Tax (Appeals) [CIT(A)]. Vide order dated 4.7.2012, Annexure A.III, the CIT(A) allowed the appeal and quashed the penalty order levied against the assessee and dele ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d any effect on the amount of tax sought to be evaded. Under the scheme of the Act, the total income of the assessee is first computed under the normal provisions of the Act and tax payable on such total income is compared with the prescribed percentage of the book profits computed under section 115JB of the Act. The higher of the two amounts is regarded as total income and tax is payable with reference to such total income. If the tax payable under the normal provisions is higher, such amount is the total income of the assessee, otherwise, book profits are deemed as the total income of the appellant in terms of section 115JB of the Act. It was also recorded:- No doubt, there was concealment but that had its repercussions onl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... such total income. If the tax payable under the normal provisions is higher, such amount is the total income of the assessee, otherwise the book profits are deemed as the total income of the assessee in terms of section 115JB of the Act. Where the income computed in accordance with the normal procedure is less than the income determined by legal fiction namely, the book profits under section 115JB of the Act and the income of the assessee is assessed under section 115JB and not under the normal provisions, the tax is paid on the income assessed under section 115JB of the Act. Concealment of income would have no role to play and would not lead to tax evasion. Therefore, penalty cannot be imposed on the basis of disallowance or additions made ..... X X X X Extracts X X X X X X X X Extracts X X X X
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