Mr. DCIT, New Delhi V. M/s. Bharat Sanchar Nigam Ltd., New Delhi

ITA 1339/DEL/2013

• Counselvise Citation: 133920114 RSA 2013
• Duration Of Justice: 10 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-01-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 15-01-2014
• Assessment Year: 2002-2003
• Appeal Filed On: 07-03-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B SRINIVAS KUMAR
• Section: 143(3); 115JB

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL DELHI DELHI DELHI DELHI BENCH BENCH BENCH BENCH A AA A : NEW DELHI : NEW DELHI : NEW DELHI : NEW DELHI BEFORE SHRI G. BEFORE SHRI G. BEFORE SHRI G. BEFORE SHRI G.D.AGRAWAL, D.AGRAWAL, D.AGRAWAL, D.AGRAWAL, VICE PRESIDENT AND VICE PRESIDENT AND VICE PRESIDENT AND VICE PRESIDENT AND SHRI SHRI SHRI SHRI CHANDRA MOHAN GARG CHANDRA MOHAN GARG CHANDRA MOHAN GARG CHANDRA MOHAN GARG, ,, , JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER ITA NO ITA NO ITA NO ITA NO. .. .1339/DEL/2013 1339/DEL/2013 1339/DEL/2013 1339/DEL/2013 ASSESSMENT YEAR ASSESSMENT YEAR ASSESSMENT YEAR ASSESSMENT YEAR : : : : 2002 2002 2002 2002- -- -03 0303 03 DEPUTY COMMISSIONER OF DEPUTY COMMISSIONER OF DEPUTY COMMISSIONER OF DEPUTY COMMISSIONER OF INCOME TAX, INCOME TAX, INCOME TAX, INCOME TAX, CIRCLE CIRCLE CIRCLE CIRCLE- -- -2(1), 2(1), 2(1), 2(1), NEW NEW NEW NEW DELHI. DELHI. DELHI. DELHI. VS. VS. VS. VS. M/S BHARAT SANCHAR NIGAM LIMITED, M/S BHARAT SANCHAR NIGAM LIMITED, M/S BHARAT SANCHAR NIGAM LIMITED, M/S BHARAT SANCHAR NIGAM LIMITED, TAXATION SECTION, FIRST FLOOR, TAXATION SECTION, FIRST FLOOR, TAXATION SECTION, FIRST FLOOR, TAXATION SECTION, FIRST FLOOR, BHARAT SANCHAR BHAWAN, JANPATH, BHARAT SANCHAR BHAWAN, JANPATH, BHARAT SANCHAR BHAWAN, JANPATH, BHARAT SANCHAR BHAWAN, JANPATH, NEW DELHI NEW DELHI NEW DELHI NEW DELHI 110 001. 110 001. 110 001. 110 001. PAN : AABCB5576G. PAN : AABCB5576G. PAN : AABCB5576G. PAN : AABCB5576G. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI B. SRINIVAS KUMAR, DR. RESPONDENT BY : SHRI TARANDEEP SINGH, CA. ORDER ORDER ORDER ORDER PER G. PER G. PER G. PER G.D.AGRAWAL, D.AGRAWAL, D.AGRAWAL, D.AGRAWAL, VP VPVP VP : : : : THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF LEARNED CIT(A)-V, NEW DELHI DATED 3 RD DECEMBER, 2012 FOR THE AY 2002- 03. 2. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS:- 1. WHETHER THE LD.CIT(A) HAS ERRED ON FACTS AND IN LAW IN DELETING THE PENALTY IMPOSED U/S 271(1)(C) OF THE I T ACT AMOUNTING TO RS.273,06,75,864/- IGNORING THE FACT T HAT A) THE ADDITION MADE BY THE AO WAS CONFIRMED BY THE LD.CIT(A) AND ALSO BY HONBLE ITAT. B) THE ASSESSMENT ORDER U/S 143(3) OF THE IT ACT WA S PASSED ON NORMAL INCOME AND NOT ON BOOK PROFIT U/S 115JB OF THE IT ACT. 3. THE FACTS OF THE CASE ARE THAT THE ASSESSEE IS A GOVERNMENT OF INDIA UNDERTAKING WHICH FILED THE RETURN DECLARING LOSS OF ` 1927.43 CRORES AND HAD DECLARED TAXABLE BOOK PROFIT OF ` 6857.32 CRORES. THE ITA-1339/D/2013 2 ASSESSING OFFICER COMPLETED THE ASSESSMENT UNDER SE CTION 143(3) DETERMINING THE INCOME AT ` 4442.55 CRORES. HE ALSO DETERMINED THE BOOK PROFIT AT ` 8023.31 CRORES. ACCORDINGLY, HE LEVIED THE TAX AS PER REGULAR INCOME. HOWEVER, AFTER THE APPEAL BEFORE T HE CIT(A) AND THE ITAT, THE ASSESSING OFFICER, VIDE ORDER DATED 15.7. 2009, GAVE EFFECT TO THE ORDER OF THE ITAT AND FINALLY LEVIED THE TAX UP ON THE ASSESSEE AS PER BOOK PROFIT. THAT THE ASSESSING OFFICER PASSED THE ORDER UNDER SECTION 271(1)(C) LEVYING THE PENALTY OF ` 273.06 CRORES IN RESPECT OF THE ADDITIONS MADE BY HIM WHILE COMPUTING THE REGUL AR INCOME WHICH WAS SUSTAINED IN APPEAL BY THE ITAT. THE CIT(A) DE LETED THE PENALTY FOLLOWING THE DECISION OF HON'BLE JURISDICTIONAL HI GH COURT IN THE CASE OF CIT VS. NALWA SONS INVESTMENTS LTD. [2010] 327 IT R 543. THE REVENUE, AGGRIEVED WITH THE ORDER OF LEARNED CIT(A) , IS IN APPEAL BEFORE US. 4. WE HAVE HEARD THE ARGUMENTS OF BOTH THE SIDES AN D PERUSED THE MATERIAL PLACED BEFORE US. WE FIND THAT HON'BLE JU RISDICTIONAL HIGH COURT IN THE CASE OF NALWA SONS INVESTMENTS LTD. (S UPRA) HELD AS UNDER:- UNDER THE SCHEME OF THE INCOME-TAX ACT, 1961, THE TOTAL INCOME OF THE ASSESSEE IS FIRST COMPUTED UNDER THE NORMAL PROVISIONS OF THE ACT AND TAX PAYABLE ON SUCH TOTAL INCOME IS COMPARED WITH THE PRESCRIBED PERCENTAGE OF THE B OOK PROFITS COMPUTED UNDER SECTION 115JB OF THE ACT. T HE HIGHER OF THE TWO AMOUNTS IS REGARDED AS TOTAL INCO ME 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, OTHERWI SE, THE BOOK PROFITS ARE DEEMED AS THE TOTAL INCOME OF THE ASSESSEE IN TERMS OF SECTION 115JB OF THE ACT. WHE RE THE INCOME COMPUTED IN ACCORDANCE WITH THE NORMAL PROCEDURE IS LESS THAN THE INCOME DETERMINED BY LEG AL FICTION, NAMELY, THE BOOK PROFITS UNDER SECTION 115 JB OF THE ACT AND THE INCOME OF THE ASSESSEE IS ASSESSED UNDE R SECTION 115JB AND NOT UNDER THE NORMAL PROVISIONS, THE TAX IS PAID ON THE INCOME ASSESSED UNDER SECTION 115JB OF THE ACT. CONCEALMENT OF INCOME WOULD HAVE NO ROLE TO P LAY ITA-1339/D/2013 3 AND WOULD NOT LEAD TO TAX EVASION. THEREFORE, PENA LTY CANNOT BE IMPOSED ON THE BASIS OF DISALLOWANCES OR ADDITIONS MADE UNDER THE REGULAR PROVISIONS. 5. THAT THE RATIO OF THE ABOVE DECISION WOULD BE SQ UARELY APPLICABLE TO THE FACTS OF THE ASSESSEES CASE BECAUSE IN THIS CASE ALSO, TAX HAS BEEN FINALLY LEVIED UNDER SECTION 115JB BUT THE ASS ESSING OFFICER HAD LEVIED THE PENALTY UNDER SECTION 271(1)(C) IN RESPE CT OF THE ADDITIONS MADE WHILE COMPUTING THE REGULAR INCOME. THEREFORE , IN OUR OPINION, LEARNED CIT(A) RIGHTLY FOLLOWED THE DECISION OF HON 'BLE JURISDICTIONAL HIGH COURT. ACCORDINGLY, THE ORDER OF LEARNED CIT( A) IS SUSTAINED AND REVENUES APPEAL IS DISMISSED. 6. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. DECISION PRONOUNCED IN THE OPEN COURT ON 24 TH JANUARY, 2014. SD/- SD/- ( (( (CHANDRA MOHAN GARG CHANDRA MOHAN GARG CHANDRA MOHAN GARG CHANDRA MOHAN GARG) )) ) (G.D.AGRAWAL) (G.D.AGRAWAL) (G.D.AGRAWAL) (G.D.AGRAWAL) JUDICIAL JUDICIAL JUDICIAL JUDICIAL MEMBER MEMBER MEMBER MEMBER VICE PRESIDENT VICE PRESIDENT VICE PRESIDENT VICE PRESIDENT DATED : 24.01.2014 VK. COPY FORWARDED TO: - 1. APPELLANT : DEPUTY COMMISSIONER OF INCOME TA X, DEPUTY COMMISSIONER OF INCOME TAX, DEPUTY COMMISSIONER OF INCOME TAX, DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE CIRCLE CIRCLE CIRCLE- -- -2(1), NEW DELHI. 2(1), NEW DELHI. 2(1), NEW DELHI. 2(1), NEW DELHI. 2. RESPONDENT : M/S BHARAT SANCHAR NIGAM LIMITED, M/S BHARAT SANCHAR NIGAM LIMITED, M/S BHARAT SANCHAR NIGAM LIMITED, M/S BHARAT SANCHAR NIGAM LIMITED, TAXATION SECTION, FIRST FLOOR, TAXATION SECTION, FIRST FLOOR, TAXATION SECTION, FIRST FLOOR, TAXATION SECTION, FIRST FLOOR, BHARAT SANCHAR BHAWAN, JANPATH, BHARAT SANCHAR BHAWAN, JANPATH, BHARAT SANCHAR BHAWAN, JANPATH, BHARAT SANCHAR BHAWAN, JANPATH, NEW DELHI NEW DELHI NEW DELHI NEW DELHI 110 001. 110 001. 110 001. 110 001. 3. CIT 4. CIT(A) 5. DR, ITAT ASSISTANT REGISTRAR