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TMI Blog2024 (9) TMI 1674X X X X Extracts X X X X X X X X Extracts X X X X ..... pointed out that both the acts could not have been done by the assessee as per law itself since the limitation prescribed in law for filing revised return and form No 29B had expired by the time the assessee became aware of the lapse on its part during assessment proceedings. Ld.DR was unable to controvert this contention of assessee. Clearly the distinction made for not applying the decision of the Hon ble High court has been demonstrated to be incorrect. Also while finding the assessee to have acted malafidely by not paying taxes on book profits by including therein exempt long term capital gain, the ITAT we have noted has not dealt with the explanation of the assessee that inclusion of exempt capital gain in Book Profits was by way of amendment in law applicable from the impugned year onwards and therefore missed out for its consideration. We agree with assessee that there was a mistake apparent on record in the order of the ITAT finding the assessee to have acted malafidely by only considering the fact that the assessee had consistently been disclosing computation of book profits as per section 115JB of the Act in preceding years while not doing so in the impugned year, withou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... alty order passed, was not adjudicated by the ITAT treating it as a general in nature; ii) That while confirming the levy of penalty on the first issue; a. specific averments made by the ld. counsel for the assessee were not dealt with and b. Findings of the ITAT are based on incorrect assumption of fact and law . 4. Vis- -vis the aspect of ground not being dealt with by the ITAT, it was pointed out that ground no. 1 raised by the assessee before the ITAT was a specific ground, challenging the order of the ld. CIT(A), upholding the validity of the penalty order passed by the AO. Our attention was drawn to the said ground, which reads as under: In law and in the facts and circumstances of the appellant s case, the ld. CIT(A) has grossly erred in upholding the validity of the penalty order passed by the Assessing Officer. 5. The ld. counsel for the assessee, thereafter pointed out from the order passed by the ITAT that the same was not dealt with by the ITAT, treating it as general ground needing no adjudication. 5.1 The ld. counsel for the assessee contended that this treatment of ground no.1 as being general in nature by the ITAT was grossly incorrect, since clearly the ground rais ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nts filed by it, was a mistake apparent from record, and therefore, he pleaded that the order passed by the ITAT be vacated, and the appeal be restored for de novo disposal and hearing in accordance with law. 6. The ld.DR on the other hand, did not controvert the fact that the ITAT had treated the ground no.1 raised by the assessee as being general in nature, but at the same time, he pointed out that the ITAT had dealt with the aspect of validity of the order in succeeding paragraphs, while dealing the ground raised by the assessee on the specific issues on which penalty was levied by the AO and confirmed by the ld. CIT(A). He further contended that the assessee had made no arguments to the ITAT on the ground no.1, and therefore, the same were rightly not adjudicated by the ITAT. 7. To this, the ld. counsel for the assessee countered by stating that clearly it was a specific ground raised by the assessee, and the ITAT had erred in treating it as general ground. He further stated that in other ground raised by the assessee, the ITAT had failed to deal with the aspect of validity of the order passed levying penalty on the assessee. He further contended that even for the sake of argum ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ponent of income claimed exempt in terms of provisions of section 115JB of the Act. The quantum of long term capital gain so involved amounted to Rs. 9,52,73,544/-. Accordingly, in the assessment order passed under section 143(3) of the Act, the AO computed the book profits of the assessee at Rs. 9.87 crores, while the income as per the normal provisions of the Act was assessed at Rs. 76,15,338/- after disallowing expenses and depreciation totaling to Rs. 13,24,563/-. The AO held that the assessee was liable to pay taxes on the book profits since they were higher than the tax calculated under the normal provisions of the Act, as provided in law. Penalty proceedings under section 271(1)(c) of the Act were initiated on the assessee for not having paid taxes on its book profits. 11. The ld. counsel for the assessee contended that it had been pleaded before the ITAT that law had been amended from the impugned year itself, including the exempt income in the book profits for paying taxes under section 115JB of the Act; that this provision was not there on the Statute in earlier years, and therefore, the assessee in mistaken bonafide belief had failed to include the exempt long term capit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... alty on non-inclusion of exempt long term capital against in the book profits of the assessee, was clearly covered in favour of the assessee by this decision. The ld. counsel for the assessee contended that the ITAT distinguished this decision on facts stating that in the said decision, the Hon ble High Court noted the assessee to have filed revised return and necessary reports under section 115JB of the Act in form No. 29B, but no such action was taken by the assessee in the present case. 13. The ld. counsel for the assessee contended that this finding was based on incorrect application of law for the reason that when the assessment proceedings were going on, the limitation for filing revised return as also for Form No. 29B had expired. He contended that the act of the assessee in accepting the assessment order itself needed to be treated as revision of its return of income, and therefore, this distinction made by the ITAT for not applying the decision of the Hon ble Punjab and Haryana High Court (supra) was incorrect, and so also the finding of the ITAT doubting bona fides of the explanation of the assessee for the reason that the assessee had not revised its return, nor filed fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly been disclosing computation of book profits as per section 115JB of the Act in preceding years while not doing so in the impugned year, without dealing with the aforestated explanation of the assessee of exempt income being included in Book Profits being a recent amendment. This explanation of the assessee not only addresses non-disclosure of Book Profits in the impugned year but also the fact why it was consistently disclosed in earlier years. Not dealing with this explanation of the assessee has resulted in there being a mistake in the order of the ITAT. 18. In the light of the same, we hold, that there is a clear mistake in the order of the ITAT, while holding the assessee to have not established its bona fides for escaping the levy of penalty, on ground no.2 raised by the assessee. In the light of the same, MA filed by the assessee on this issue also, we hold, is maintainable. 19. Considering our finding as above on the MA filed by the assessee, we recall the order passed by the ITAT in ITA No. 1275/Ahd/2012 for de novo adjudication on ground no.1 and 2. 20. In the result, the MA of the assessee is allowed. 21. Registry is directed to fix the appeal for hearing on 08/10/24. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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