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TMI Blog2019 (4) TMI 1616X X X X Extracts X X X X X X X X Extracts X X X X ..... ds before us, we find that the only effective issue to be decided in this appeal is as to whether the ld CITA was justified in confirming the penalty levied u/s 271(1)( c) of the Act in the facts and circumstances of the case. 3. The brief facts of this issue are that the assessee filed its return of income for the Asst Year 2013-14 on 30.9.2013 declaring total income of Rs. 77,85,890/-. The assessee is engaged in the business of manufacturing and export of gold and diamond jewellery. The assessment was completed u/s 143(3) of the Act by the ld AO on 22.1.2016 determining total income at Rs. 93,95,586/- by adding the dividend received from foreign subsidiary u/s 115BBD of the Act. The ld AO observed that the assessee had invested Rs. 37,5 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e find that the ld AR made an argument that since ultimately the total income of the assessee was determined only u/s 115JB of the Act by the ld AO, the assessee did not prefer any appeal before the ld CITA against the denial of set off of business loss with foreign dividend income as stated supra. From the perusal of the computation of total income placed on record forming part of the paper book filed before us , we find that the total income under normal provisions of the Act was determined at Rs. 77,85,890/- which is taxable at the rate of 15%, whereas the book profits of Rs. 77,85,890/- is taxable u/s 115JB of the Act at the rate of 18.5% . Hence the tax payable u/s 115JB of the Act was more than the tax payable under normal provisions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt dated 26-8-2010 in ITA No.1420 of 2009 [2010] 194 taxman 387 (Delhi) in the case of Nalwa Sons Investment Ltd. (available in NJRS as 2010-LL-0826-2), held that when the tax payable on income computed under normal procedure is less than the tax payable under the deeming provisions of section 115JB of the Act, then penalty under section 271(1)(c) of the Act could not be imposed with reference to additions /disallowances made under normal provisions. The judgment has attained finality. 4. Subsequently, the provisions of Explanation 4 to sub-section (1) of section 271 of the Act have been substituted by Finance Act, 2015, which provide for the method of calculating the amount of tax sought to be evaded for situations even where the income ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt order u/s 143(3) of the Act was passed by the ld AO on 22.1.2016 and hence the argument of the ld DR on this point is factually incorrect. Morever, on the date of passing of penalty order u/s 271(1)( c) of the Act, this circular was very much in force and would definitely bind the revenue authorities . The aforesaid circular is unambiguous and categorical that no penalty u/s 271(1)(c ) of the Act could be levied in respect of additions/ disallowances made under normal provisions of the Act, if ultimately the tax liability is determined u/s 115JB of the Act by the ld AO. It is not in dispute that the assessee is liable to tax only u/s 115JB of the Act even after the completion of assessment u/s 143(3) of the Act for the year under conside ..... X X X X Extracts X X X X X X X X Extracts X X X X
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