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TMI Blog2018 (4) TMI 191X X X X Extracts X X X X X X X X Extracts X X X X ..... Tribunal in cross appeals filed by the assessee and the revenue. The facts are being extracted from ITA No.102 of 2016. 2. ITA No.102 of 2016 has been preferred by the revenue under Section 260A of the Income Tax Act, 1961 (in short, "the Act") against the order dated 12.10.2015, Annexure A.4, passed by the Income Tax Appellate Tribunal, Chandigarh Bench, Chandigarh (in short, "the Tribunal"), in ITA No.1242/Chd/2012 for the assessment year 2005-06, claiming following substantial questions of law:- "i) Whether on the facts and in the circumstances of the case, the order of the Hon'ble ITAT is perverse in deleting the penalty only by referring to the provisions of Section 115JB of the I.T. Act and by holding that as the assessee is being a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the controversy involved as narrated in ITA No.102 of 2016 may be noticed. Assessment was completed under section 143(3) of the Act on 24.12.2007 at an income of Rs. 2,38,00,717/- by making various additions. Subsequently, the Assessing Officer levied the penalty under section 271(1)(c) of the Act of Rs. 70,00,000/- vide order dated 28.3.2011 on the following additions:- i) Penalty levied on addition of Rs. 1,22,35,474/- under section 40(a)(ia) of the Act on account of late deposit of TDS; ii) Penalty levied on addition of Rs. 11,13,777/- on account of payment made through credit cards; iii) Penalty levied on disallowance of Rs. 5,10,625/- (wrong claim of depreciation of Rs. 4,08,250/- on plant and machinery and computer plus wrong clai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Act could not be levied. Reliance was placed on the judgment of this court in CIT-I, Ludhiana vs. M/s Vardhman Acrylics Limited, Chandigarh Road, Ludhiana in ITA No.346 of 2013 decided on 4.8.2014 wherein it was held that the assessment having been made under the provisions of MAT under Section 115JB of the Act, penalty under Section 271(1)(c) of the Act could not be levied on addition and disallowance made in regular income. Hence the instant appeals by the revenue. 4. We have heard learned counsel for the parties. 5. The primary issue that arises for consideration in these appeals is whether an assessee is liable for penalty under Section 271(1)(c) of the Act in respect of individual disallowances especially when it is being taxed und ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s 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 only when the assessment 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 115JB 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. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dings of the authorities below and considered the material available on record. From the documents filed by the learned counsel for the assessee we see that the assessee had gone in appeal till the stage of ITAT against the quantum order of the relevant assessment year, which was decided by the Chandigarh Bench of the ITAT on 24.7.2014 in ITA No.409 of 2010. Even the appeal effect order placed on record giving effect to the order of the ITAT shows that the regular income has been computed as nil. Since there were brought forward losses and depreciation, the return was filed declaring the income under the MAT and even after appeal effect, the income assessed under section 115JB of the Act, the ratio laid down by the Hon'ble Jurisdictional Hi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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