ASST CIT CIR 1, THANE v. EVEREST INDUSTRIES LTD, NEW DELHI

ITA 1458/MUM/2018 | 2012-2013
Pronouncement Date: 25-11-2019 | Result: Dismissed

Appeal Details

RSA Number 145819914 RSA 2018
Assessee PAN AAACE7550N
Bench Mumbai
Appeal Number ITA 1458/MUM/2018
Duration Of Justice 1 year(s) 8 month(s) 18 day(s)
Appellant ASST CIT CIR 1, THANE
Respondent EVEREST INDUSTRIES LTD, NEW DELHI
Appeal Type Income Tax Appeal
Pronouncement Date 25-11-2019
Appeal Filed By Department
Order Result Dismissed
Bench Allotted E
Tribunal Order Date 25-11-2019
Last Hearing Date 27-05-2020
First Hearing Date 27-05-2020
Assessment Year 2012-2013
Appeal Filed On 08-03-2018
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL E BE NCH MUMBAI BEFORE SHRI MAHAVIR SINGH JUDICIAL MEMBER AND SHRI RAJESH KUMAR ACCOUNTANT MEMBER / I .TA NO.1458/MUM/2018 ( / / / / ASSESSMENT YEAR:2012-13 ASSISTANT COMMISSIONER OF INCOME TAX CIRCLE-1 THANE. VS. M/S.EVEREST INDUSTRIES LTD. D-206 SECTOR-63 NOIDA UTTAR PRADESH 201 307. PAN : AAACE 7550 N (APPELLANT) (RES PONDENT) / APPELLANT BY : SHRI R.MANJUNATHA SWAMY CIT D. R SHRI RAJESH KUMAR MISHRA DR /RESPONDENT BY: SHRI AJIT KUMAR JAIN A.R / DATE OF HEARING : 28.08.2019 /DATE OF PRONOUNCEMENT : 25.11.2019 / O R D E R PER RAJESH KUMAR ACCOUNTANT MEMBER THE ONLY ISSUE RAISED BY THE REVENUE IN VARIOUS GRO UNDS OF APPEAL IS AGAINST THE ACTION OF LD.CIT(A) IN DELETING THE PENALTY OF RS.6 74 44 736/- LEVIED U/S.271(1)(C) OF THE ACT BY THE AO. 2. THE FACTS IN BRIEF ARE THAT THE ASSESSMENT IN TH IS CASE WAS FRAMED VIDE ORDER DATED 26.03.2015 PASSED U/S.143(3) OF THE ACT ASSESSED TH E TOTAL INCOME AT RS.22 78 74 050/- WHEREIN THE ADDITIONS /DISALLOWANCES TO THE TUNE OF RS.45 43 88 101/- WERE MADE BY THE AO AND THE BOOK PROFIT U/S.115JB OF THE ACT WAS CALCU LATED AT RS.62 91 47 716/- . THE TAX AS PER BOOK PROFIT U/S.115JB OF THE ACT WAS MORE THAN THE TAX AS PER THE NORMAL PROVISIONS OF THE ACT. THE AO VIDE ORDER DATED 30.09.2015 IMPOSED THE PENALTY OF RS.15 44 46 515/- U/S.271(1)(C) OF THE ACT BEING 100% OF THE TAX EVAD ED ON THE BASIS ADDITIONS MADE UNDER THE NORMAL PROVISIONS OF THE ACT. THE SAID ORDER OF THE AO WAS CHALLENGED BEFORE THE LD.CIT(A) WHO DELETED THE PENALTY AS IMPOSED BY TH E AO BY RELYING ON THE DECISION OF THE ITA NO.1458/MUM/2018 HON'BLE DELHI HIGH COURT IN THE CASE OF NAWLA SONS INVESTMENT REPORTED IN [2010] 194 TAXMAN 387 (DELHI) AND CBDT CIRCULAR NO.25/2015 DAT ED 31.12.2015 AND ALSO THE DECISION OF THE PREDECESSOR IN A.Y. 2008-09 IN ASSESSEE OWN CASE. THE RELEVANT PORTION OF THE LD.CIT(A)S ORDER IS EXTRACTED BELOW:- 7. I HAVE CAREFULLY CONSIDERED THE APPELLANTS SUB MISSIONS OBSERVATIONS OF THE AO IN THE ASSESSMENT ORDER AND THE PENALTY ORDER AND THE FACT S OF THE CASE. THE AO HAS IMPOSED PENALTY IN THIS CASE U/S.271(1)(C) OF THE ACT AMOUNTING TO RS.15 44 46 515/- WITH RESPECT TO ADDITIONS MADE IN THE ASSESSMENT ORDER UNDER THE NORMAL PROVISIONS OF THE ACT AMOUNTING TO RS.45 43 88 101/-. THE SUBMISSIONS OF THE APPELLANT ON VARIOUS GROUNDS OF APPEAL HAVE ALREADY BEEN SUMMARIZED ABOVE. GROUND NO.6 OF THE APPELLANTS APPEAL IS BEING TAKE N UP FIRST AND IS DISCUSSED AS UNDER:- 7.1. IN THIS GROUND THE APPELLANT HAS SUBMITTED THA T THE RETURNED INCOME FOR THE YEAR UNDER CONSIDERATION WAS NIL. THEREFORE THE APPELLANT HAD PAID TAX ON BOOK PROFIT U/S.115JB OF THE ACT. IN TH E ORDER U/S.143(3) THE AO HAS DISALLOWED VARIOUS CLA IMS OF APPELLANT AND COMPUTED TOTAL INCOME UNDER NORMAL PROVISIONS OF S.115JB AT RS.62 91 47 7 16/-. EVEN AFTER DISALLOWANCES BEING MADE BY THE AO IN THE ASSESSMENT ORDER TAX CONTINUED TO BE PAI D AS PER SECTION 115JB OF THE ACT. THEREFORE ACCORDING TO THE APPELLANT THERE WAS NO TAX SOUGHT TO BE EVADED AND HENCE NO PENALTY U/S.271(1)(C) OF THE ACT COULD BE LEVIED IN ITS CASE. IN THIS REG ARD IT IS SEEN THAT THE CBDT HAS ISSUED CIRCULAR NO.25/2015 WHICH READS AS UNDER:- SUBJECT: PENALTY U/S.271(1)(C) WHEREIN ADDITIONS/D ISALLOWANCES MADE UNDER NORMAL PROVISIONS OF THE INCOME TAX ACT 1961 BU TAX LEVIED UNDER MAT PROVISIONS U/S.115JB /115JC FOR CASES PRIOR TO A.Y 2016-17-REG. SECTION 115JB OF THE ACT IS A SPECIAL PROVISION FOR LEVY OF MINIMUM ALTERNATE TAX ON COMPANIES INSERTED BY FINANCE ACT 2000 WITH EFFECT FROM 1.4.2001. 2. UNDER CLAUSE (III) OF SUB-SECTION (1) OF SECTIO N 271 OF THE ACT PENALTY FOR CONCEALMENT OF INCOME OR FURNISHING INACCURATE PART ICULARS OF INCOME IS DETERMINED BASED ON THE AMOUNT OF TAX SOUGHT TO BE EVADED WHICH HA S BEEN DEFINED INTER-ALIA AS THE DIFFERENCE BETWEEN THE TAX DUE ON THE INCOME ASSESS ED AND THE TAX WHICH WOULD HAVE BEEN CHARGEABLE HAD SUCH TOTAL INCOME BEEN REDUCED BY THE AMOUNT OF CONCEALED INCOME OR INCOME IN RESPECT OF WHICH INACCURATE PARTICULAR S HAD BEEN FILED. 3. IN THIS CONTEXT THE HON'BLE DELHI HIGH COURT I N ITS JUDGEMENT DATED 26.08.2010 IN ITA NO.1420 OF 2009 (2010) 194 TAXMAN 387 (DELHI) I N THE CASE OF NALWA SONS INVESTMENT LTD. (AVAILABLE IN NRJS AS 2010-LL-0826-2) HELD TH AT WHEN THE TAX PAYABLE ON INCOME COMPUTED UNDER NORMAL PROCEDURE IS LESS THAN THE TA X PAYABLE UNDER THE DEEMING PROVISIONS OF SECTION 115HB OF THE ACT THEN PENALT Y U/S.271(1)(C) OF THE ACT COULD NOT BE IMPOSED WITH REFERENCE TO ADDITIONS/DISALLOWANCE MA DE UNDER NORMAL PROVISIONS. THE JUDGEMENT HAS ATTAINED FINALITY. 4. SUBSEQUENTLY THE PROVISIONS OF EXPLANATION TO S UB-SECTION (1) OF SECTION 271 OF THE ACT HAVE BEEN SUBSTITUTED BY FINANCE ACT 2015 WHICH PR OVIDE FOR THE METHOD OF CALCULATING THE AMOUNT OF TAX SOUGHT TO BE EVADED FOR SITUATION S EVEN WHERE THE INCOME DETERMINED UNDER THE GENERAL PROVISIONS IS LESS THAN THE INCOM E DECLARED FOR THE PURPOSE OF MAT U/S.115JB OF THE ACT. THE SUBSTITUTED EXPLANATION 4 IS APPLICABLE PROSPECTIVELY W.E.F.1.4.2016. 5. ACCORDINGLY IN VIEW OF THE DELHI HIGH COURT JUD GEMENT AND SUBSTITUTION OF EXPLANATION 4 OF SECTION 271 OF THE ACT WITH PROSPECTIVE EFFECT IT IS NOW A SETTLED POSITION THAT PRIOR TO 1.4.2016 WHERE THE INCOME TAX PAYABLE ON THE TOTAL INCOME AS COMPUTED UNDER THE NORMAL PROVISIONS OF THE ACT IS LESS THAN THE TAX PA YABLE ON THE BOOK PROFITS U/S.115JB OF THE ACT THEN PENALTY U/S.271(1)(C) OF THE ACT IS NOT ATTRACTED WITH REFERENCE TO ADDITIONS ITA NO.1458/MUM/2018 /DISALLOWANCES MADE UNDER NORMAL PROVISIONS. IT IS FURTHER CLARIFIED THAT IN CASES PRIOR TO 1.4.2016 IF ANY ADJUSTMENT IS MADE IN THE INCOME C OMPUTED FOR THE PURPOSE OF MAT THEN THE LEVY OF PENALTY U/S.271(1)(C) OF THE ACT WILL D EPEND ON THE NATURE OF ADJUSTMENT. 6. THE ABOVE SETTLED POSITION IS TO BE FOLLOWED IN RESPECT OF SECTION 115JC OF THE ACT ALSO. 7. ACCORDINGLY THE BOARD HEREBY DIRECTS THAT NO AP PEALS MAY HENCEFORTH BE FILED ON THIS GROUND AND APPEALS ALREADY FILED IF ANY ON THIS I SSUE BEFORE VARIOUS COURTS/TRIBUNALS MAY BE WITHDRAWN/NOT PRESSED UPON. THIS MAY BE BROUGHT TO THE NOTICE OF ALL CONCERNED. 7.2 IN THE APPELLANTS CASE AS THE INCOME TAX PAYA BLE ON THE TOTAL INCOME AS COMPUTED UNDER NORMAL PROVISIONS OF THE ACT AFTER TAKING INTO ACCO UNT THE DISALLOWANCES MADE BY THE AO IN ORDER U/S.143(3) IS LESS THAN THE TAX PAYABLE ON THE BOOK PROFITS U/S.115JB OF THE ACT THEREFORE IN VIEW O F THE ABOVE CIRCULAR NO PENALTY U/S.271(1)(C) OF THE ACT CAN BE IMPOSED WITH REFERENCE TO ADDITIONS/DISALLOWANCES MADE UNDER NORMAL PROVISION OF THE ACT. 7.3 FURTHER SIMILAR ISSUE WAS DECIDED BY MY PREDEC ESSOR IN PENALTY APPEAL FOR A.Y. 2008-09 IN FAVOUR OF THE APPELLANT BY HOLDING AS UNDER:- IN THE APPELLANTS CASE AS THE INCOME TAX PAYABL E ON THE TOTAL INCOME AS COMPUTED UNDER THE NORMAL PROVISIONS OF THE ACT AFTER TAKING INTO ACCOUNT THE DISALLOWANCES OF ADDITIONAL DEPRECIATION MADE BY THE AO IN ORDER U/S .143(3) AND CONFIRMED BY LD.CIT(A) IS LESS THAN THE TAX PAYABLE ON THE BOOK PROFITS U/S.1 15JB OF THE ACT THEREFORE IN VIEW OF THE ABOVE CIRCULAR NO PENALTY U/S.271(1)(C) OF THE ACT CAN BE IMPOSED WITH REFERENCE TO ADDITIONS/DISALLOWANCES MADE UNDER NORMAL PROVISION S OF THE ACT. THE AO IS THEREFORE DIRECTED TO DELETE THE PENALTY U/S.271(1)(C) IMPOSE D IN THIS CASE AMOUNTING TO RS.2 42 91 160/-. 7.4. SINCE THE FACTS AND CIRCUMSTANCES IN THIS YE AR ARE ALSO IDENTICAL THEREFORE BY PLACING RELIANCE ON THE APEX COURT JUDGEMENT IN THE CASE OF NALWA SONS INVESTMENT CBDT CIRCULAR NO.25/2015 DATED 31.12.2015AND THE DECISION OF MY P REDECESSOR IN A.Y 2008-09 I HEREBY DIRECT THE AO TO DELETE THE PENALTY U/S.271(1)(C) IMPOSED IN T HIS CASE. 3. AFTER HEARING BOTH THE PARTIES AND PERUSING THE MATERIAL ON RECORD WE FIND THAT THE AO HAS IMPOSED THE PENALTY ON THE BASIS OF ADDITIO NS MADE TO THE INCOME OF THE ASSESSEE UNDER THE NORMAL PROVISIONS OF THE ACT WHEREAS THE TAX HAS IN FACT BEEN PAID BY THE ASSESSEE AS PER PROVISIONS OF MAT . IN THE ASSESSME NT ORDER THE TAX AS PER MAT PROVISIONS WAS MORE THAN THE TAX AS PER THE NORMAL PROVISIONS OF THE ACT. LD.CIT(A) HAS GIVEN A VERY CLEAR CUT FINDINGS THAT IN CASE THE TAX PAYABLE O N THE INCOME AS COMPUTED UNDER THE NORMAL PROVISIONS OF THE ACT IS LESS THAN THE TAX P AYABLE ON THE BOOK PROFITS U/S.115JB OF THE ACT THEN PENALTY U/S.271(1)(C) OF THE ACT WOULD N OT BE IMPOSED WITH REFERENCE TO THE ADDITIONS/DISALLOWANCES MADE UNDER NORMAL PROVISION S OF THE ACT. FURTHER WE FIND THAT LD.CIT(A) RELIED ON THE CBDT CIRCULAR NO.25/2015 DA TED 31.12.2015 WHICH ALSO PROVIDED FOR NON-LEVY OF PENALTY WHERE THE INCOME TAX PAYABLE UN DER THE NORMAL PROVISIONS OF THE ACT IS LESS THAN THE INCOME TAX PAYABLE UNDER MAT U/S.115J B OF THE ACT. WE FURTHER FIND THAT THE ITA NO.1458/MUM/2018 FINANCE ACT 2015 HAS INSERTED EXPLANTION-4 TO SUB- SECTION (1) OF SECTION 271 OF THE ACT WHICH PROVIDES FOR THE METHOD OF CALCULATING THE AM OUNT OF TAX SOUGHT TO BE EVADED WHERE THE INCOME DETERMINED UNDER THE GENERAL PROVISIONS IS LESS THAN THE INCOME DECLARED FOR THE PURPOSE OF MAT U/S.115JB OF THE ACT WITH EFFECT FROM 01.04.2016. THE LD.CIT(A) HAS ALSO FOLLOWED THE ORDER OF THE PREDECESSOR IN A.Y. 2008- 09 IN ASSESSEES OWN CASE . IN VIEW OF THESE FACTS CITED SUPRA WE ARE INCLINED TO UPHELD THE ORDER OF THE LD.CIT(A) BY DISMISSING THE APPEAL FILED BY THE REVENUE. 4 . IN THE RESULT THE APPEAL OF REVENUE IS DISMISSE D. SD/- SD/- ( MAHAVIR SINGH ) ( RAJESH KUMAR ) /JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI; DATED : 25 TH NOVEMBER 2019 KSS SR. PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A)- 4. / CIT 5. / DR ITAT MUMBAI 6. / GUARD FILE. / BY ORDER //TRUE COPY// / // / (DY./ASSTT. REGISTRAR) / ITAT MUMBAI