2020 (1) TMI 1170

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..... er: 1) On the facts and in the circumstance of the case and in law, the Ld, Commissioner of Income Tax (Appeals)-2, has erred in confirming the penalty imposed by the AO us/ 271(1)(c) without specifying the exact default for which the penalty is imposed in the notice issued u/s 274, hence in view of CIT v Shri Samson Perinchery, CIT v. Manjunath Cotton & Ginning Factory, etc, sustaining penalty by CIT(A) is not justified. 2) On the facts and hi the circumstances of the case and in law, the Ld CIT(A)-2 has erred in passing the impugned order ignoring the fact that the income of the appellant is assessed u/s 115JB at returned income, hence no penalty can be imposed u/s 271(l)(c) as held in CIT v. Nalwa Sons Investments Ltd, etc, and CBDT .....

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..... rom M/s Nakshatra Business Pvt. Ltd. The assessee accepted the assessment, because, the tax payable as per the assessment order was at Rs. 10/-. Thereafter, the Ld. AO initiated penalty proceedings 271(1)(c) of the I.T. Act, 1961 and after considering relevant submissions of the assesee levied penalty of Rs. 1,53,000/- u/s 271(1)(c) of the I.T. Act, 1961, which is equivalent to 100% of tax sought to be evaded. 4. Aggrieved by the penalty order, the assessee preferred an appeal before the Ld. CIT(A). Before the Ld. CIT(A), the assessee has challenged initiation of penalty proceedings, in absence of proper notice issued u/s 271(1)(c) r.w.s. 274 of the I.T. Act, 1961. The assessee had also challenged penalty levied , on the ground that it has .....

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..... he Hon'ble Delhi High Court, in the case of Nalwa sons Investments Ltd. Vs CIT (supra) held that when, the tax payable on income computed under normal provisions of the Act is less than, the tax payable under the deeming provisions of section 115JB of the Act, then penalty u/s 271(1)(c) of the I.T. Act, 1961 could not be imposed with reference to additions/disallowances made under normal provisions of the Act. The CBDT had issued a circular No. 25/2015, dated 31/12/2015, where it has accepted the judgment of Hon'ble Delhi High Court and accordingly, issued a circular explaining the position of law before insertion of Explanation 4 to sub section (1) of section 271(1)(c) of the I.T. Act, 1961 by the Finance, Act, 2015, which provide for meth .....

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