DCIT, CHENNAI V. M/s. Tube Investments of India Ltd., CHENNAI

ITA 2220/CHNY/2016

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 6160 (ITAT-CHENNAI)
• Duration Of Justice: 1 year(s) 1 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-09-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 27-06-2017
• Assessment Year: 1998-1999
• Appeal Filed On: 25-07-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SUPRIYO PAL
• Assessee Lawyers: R VIJAYARAGHAVAN
• Section: 115JB

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, CHENNAI . . . , , ' # BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI S. JAYARAMAN, ACCOUNTANT MEMBER ./ ITA NO.2220/MDS/2016 & '& / ASSESSMENT YEAR : 1998-99 THE DEPUTY COMMISSIONER OF INCOME TAX, LARGE TAXPAYER UNIT 2, CHENNAI - 600 101. V. M/S TUBE INVESTMENTS OF INDIA LTD., DARE HOUSE, 234, N.S.C. BOSE ROAD, CHENNAI - 600 001. PAN : AAACT 1249 H ()*/ APPELLANT) (+,)*/ RESPONDENT) )* - . / APPELLANT BY : SHRI SUPRIYO PAL, JCIT +,)* - . / RESPONDENT BY : SH. R. VIJAYARAGHAVAN, ADVOCATE / - 0' / DATE OF HEARING : 11.09.2017 12' - 0' / DATE OF PRONOUNCEMENT : 20.09.2017 / O R D E R PER N.R.S. GANESAN, JUDICIAL MEMBER: THIS APPEAL OF THE REVENUE IS DIRECTED AGAINST TH E ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) -17, CHENN AI, DATED 30.03.2016 PERTAINING TO ASSESSMENT YEAR 1998-99, T O REWORK THE QUANTUM OF PENALTY IN TERMS OF SECTION 271(1)(C)(II I) OF THE INCOME- TAX ACT, 1961 (IN SHORT 'THE ACT'). 2 I.T.A. NO.2220/MDS/16 2. SHRI SUPRIYO PAL, THE LD. DEPARTMENTAL REPRESENT ATIVE, SUBMITTED THAT THE ASSESSING OFFICER LEVIED PENALTY FOR THE ASSESSMENT YEAR 1998-99. SUBSEQUENTLY, THE ASSESSE E FILED MISCELLANEOUS PETITION CLAIMING THAT THE PENALTY UN DER SECTION 271(1)(C) OF THE ACT WAS IMPOSED WITH REGARD TO INC OME OF ` 2,86,00,000/-. ACCORDING TO THE LD. D.R., THE INCO ME COMPUTED AS PER NORMAL PROVISIONS OF INCOME-TAX ACT WAS ` 3,59,27,960/-. THE TOTAL INCOME COMPUTED UNDER THE PROVISIONS OF SECTI ON 115JA OF THE ACT WAS ` 4,60,24,592/- ACCORDING TO THE LD. D.R., THE ASSE SSEE CLAIMED BEFORE THE ASSESSING OFFICER THAT THE TAX P AYABLE ON THE INCOME COMPUTED UNDER SECTION 115JA OF THE ACT WAS HIGHER THAN THE TAX PAYABLE UNDER THE NORMAL PROVISIONS OF THE INCOME-TAX ACT. THEREFORE, THE TAX PAYABLE ON THE INCOME COMPUTED U NDER SECTION 115JA OF THE ACT HAS TO BE ADOPTED. ACCORDING TO T HE LD. D.R., SECTION 115JA OF THE ACT DOES NOT SAY THAT WHERE TH E TAX PAYABLE UNDER THE NORMAL PROVISIONS OF THE ACT IS LESS THAN THE TAX PAYABLE ON THE BOOK PROFITS UNDER SECTION 115JA OF THE ACT, THE INCOME COMPUTED UNDER SECTION 115JA OF THE ACT IS TO BE AD OPTED. IN THIS CASE, ACCORDING TO THE LD. D.R., THE TAX PAYABLE UN DER THE NORMAL 3 I.T.A. NO.2220/MDS/16 COMPUTATION IS HIGHER THAN THE TAX PAYABLE UNDER SE CTION 115JA OF THE ACT. 3. ON THE CONTRARY, SH. R. VIJAYARAGHAVAN, THE LD.C OUNSEL FOR THE ASSESSEE, SUBMITTED THAT THE CBDT IN ITS CIRCUL AR NO.25/2015 DATED 31.12.2015 CLARIFIES THAT WHERE THE TAX PAYAB LE ON THE TOTAL INCOME AS COMPUTED UNDER THE NORMAL PROVISIONS IS L ESS THAN THE TAX PAYABLE ON THE BOOK PROFITS UNDER SECTION 115JB OF THE ACT, THEN PENALTY UNDER SECTION 271(1)(C) OF THE ACT IS NOT A TTRACTED WITH REFERENCE TO ADDITIONS/DISALLOWANCES MADE UNDER NOR MAL COMPUTATION. IN THIS CASE, ACCORDING TO THE LD. CO UNSEL, THE INCOME- TAX PAYABLE UNDER THE NORMAL COMPUTATION IS LESS TH AN THE TAX PAYABLE ON THE BOOK PROFIT UNDER SECTION 115JA OF T HE ACT, HENCE, THE ADDITION MADE TO THE EXTENT OF ` 2,86,00,000/- IN THE NORMAL COMPUTATION CANNOT ATTRACT PENALTY IN VIEW OF THE C IRCULAR ISSUED BY THE CBDT. THEREFORE, ACCORDING TO THE LD. COUNSEL, THE CIT(APPEALS) HAS RIGHTLY DIRECTED THE ASSESSING OFF ICER TO REWORK THE QUANTUM PENALTY BASED ON THE TAX SOUGHT TO HAVE BEEN EVADED AS PER SECTION 271(1)(C) (III) OF THE ACT. 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITH ER SIDE AND PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. IT IS NOT IN 4 I.T.A. NO.2220/MDS/16 DISPUTE THAT PENALTY WAS IMPOSED ON THE INCOME OF ` 2,86,00,000/- WHICH WAS ADDED BY THE ASSESSING OFFICER WHILE COMP UTING THE INCOME UNDER THE NORMAL PROVISIONS OF THE ACT. IT IS ALSO NOT IN DISPUTE THAT THE TAX PAYABLE UNDER NORMAL COMPUTATI ON IS ` 3,59,27,960/-. HOWEVER, THE TAX PAYABLE UNDER SECT ION 115JA OF THE ACT IS ` 4,60,24,592/-. THUS, THE TAX PAYABLE UNDER THE PROVISIONS OF SECTION 115JA OF THE ACT IS HIGHER TH AN THE TAX PAYABLE UNDER NORMAL PROVISIONS OF THE ACT. THE CBDT IN IT S CIRCULAR NO.25/2015 DATED 31.12.2015, MORE PARTICULARLY AT P ARA 5, HAS CLARIFIED THE POSITION AS FOLLOWS:- 5. ACCORDINGLY, IN VIEW OF THE DELHI HIGH COURT JUDGMENT AND SUBSTITUTION OF EXPLANATION 4 OF SECTION 271 OF THE ACT WITH PROSPECTIVE EFFECT, IT IS NOW A SET TLED POSITION THAT PRIOR TO 1/4/2016, WHERE THE INCOME-TAX PAYABLE ON THE TOTAL INCOME AS COMPUTED UNDER THE N ORMAL PROVISIONS OF THE ACT IS LESS THAN THE TAX PAYABLE O N THE BOOK PROFITS UNDER SECTION 115JB OF THE ACT, THEN PEN ALTY UNDER 271(1)(C) OF THE ACT, IS NOT ATTRACTED WITH REF ERENCE TO ADDITIONS / DISALLOWANCES MADE UNDER NORMAL PROV ISIONS. IT IS FURTHER CLARIFIED THAT IN CASES PRIOR TO 1.4.201 6, IF ANY ADJUSTMENT IS MADE IN THE INCOME COMPUTED FOR T HE PURPOSE OF MAT, THEN THE LEVY OF PENALTY UNDER SECT ION 271(1)(C) OF THE ACT, WILL DEPEND ON THE NATURE OF ADJUSTMENT. 5. IN VIEW OF ABOVE, WHEN THE TAX PAYABLE UNDER THE BOOK PROFITS UNDER SECTION 115JA IS HIGHER THAN THE TAX PAYABLE UNDER NORMAL COMPUTATION, THE PROVISIONS OF SECTION 271(1 )(C) OF THE ACT IS 5 I.T.A. NO.2220/MDS/16 NOT ATTRACTED. THEREFORE, THIS TRIBUNAL HAS NO REA SON TO INTERFERE WITH THE ORDER OF THE LOWER AUTHORITY AND ACCORDING LY THE SAME IS CONFIRMED. 6. IN THE RESULT, THE APPEAL FILED BY THE REVENUE S TANDS DISMISSED. ORDER PRONOUNCED ON 20 TH SEPTEMBER, 2017 AT CHENNAI. SD/- SD/- ( ) ( . . . ) (S. JAYARAMAN) (N.R.S. GANESAN) ' / ACCOUNTANT MEMBER /JUDICIAL MEMBER /CHENNAI, 4 /DATED, THE 20 TH SEPTEMBER, 2017. KRI. - +056 76'0 /COPY TO: 1. )* /APPELLANT 2. +,)* /RESPONDENT 3. / 80 () /CIT(A)-17, CHENNAI-34 4. CIT- (LTU), CHENNAI 5. 69 +0 /DR 6. :& ; /GF.