DCIT, New Delhi V. M/s. Airline Allied Services Ltd., New Delhi

ITA 5569/DEL/2013

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 3533 (ITAT-DELHI)
• Duration Of Justice: 5 year(s) 4 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-02-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 11-05-2017
• Assessment Year: 2004-2005
• Appeal Filed On: 14-10-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: JANARDAN DAS
• Assessee Lawyers: A K SRIVASTAVA
• Keywords: Reassessment proceedings
• Section: 271(1)(c); 143(3); 115JB; 147; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH A, NEW DELHI BEFORE SH.H.S.SIDHU, JUDICIAL MEMBER AND SH. N. K. BILLAIYA, ACCOUNTANT MEMBER ITA NO.5569/DEL/2013 ASSESSMENT YEAR: 2004-05 DCIT CIRCLE 1 (1) NEW DELHI VS AIRLINE ALLIED SERVICES LTD. ROOM NO.205, 2 ND FLOOR, G- 5, BUILDING, TERMINA01, IGI AIRPORT, NEW DELHI PAN NO.AAACA1517B (APPELLANT) (RESPONDENT) APPELLANT BY SH. JANARDAN DAS, SR. DR RESPONDENT BY SH. A. K. SRIVASTAVA, CA DATE OF HEARING: 20/02/2019 DATE OF PRONOUNCEMENT: 21/02/2019 ORDER PER N. K. BILLAIYA, AM: THIS APPEAL BY THE REVENUE PREFERRED AGAINST THE OR DER OF THE CIT(A)-4, NEW DELHI DATED 15.07.2013 PERTAINING TO A. Y. 2004- 05. 2. THE REVENUE IS A AGGRIEVED BY THE DELETION OF TH E PENALTY OF RS.31,99,806/- IMPOSED BY ASSESSING OFFICER U/S 271 (1) (C) OF THE ACT. 2 3. BRIEFLY STATED THE FACTS OF THE CASE ARE THAT TH E RETURN WAS FILED ON 30.10.2004 WHICH WAS REVISED ON 31.03.2005 . THE ASSESSMENT WAS COMPLETED ON 31.11.2006 U/S 143(3) O F THE ACT ON TOTAL INCOME OF RS.11,28,40,516/-. THE COMPUTAT ION OF MAT ON ACCOUNT OF BOOK PROFIT WAS FILED AS PER WHICH TH ERE WAS A TAX PAYABLE U/S 115JB OF THE ACT. 4. LATER ON THE COMPLETED ASSESSMENT WAS REOPENED B Y ISSUE OF NOTICE U/S 148 OF THE ACT. THE REASONS FOR REOPENIN G THE ASSESSMENT WAS THAT THE ASSESSEE HAD MADE PROVISION FOR OPERATING EXPENSES OF RS.7.34 CRORES OUT OF WHICH O NLY RS.4.85 CRORES WAS ADDED BACK BY THE ASSESSEE IN THE COMPUT ATION OF INCOME. THE BALANCE OF RS.2.49 CRORES REMAINED TO BE ADDED TO THE INCOME. 5. THE REASSESSMENT PROCEEDINGS WERE COMPLETED BY O RDER DATED 21.12.2011 FRAMED U/S 143(3) R/W SECTION 147 OF THE ACT AT TOTAL TAXABLE INCOME OF RS.NIL. ONCE AGAIN THE TAX PAYABLE WAS COMPUTED AS PER MAT U/S 115 JB OF THE ACT. 6. THE ASSESSING OFFICER INITIATED PENALTY PROCEEDI NGS U/S 271 (1) (C) OF THE ACT ON THE BALANCE AMOUNT OF THE PRO VISION WHICH WAS ADDED BY THE ASSESSING OFFICER IN THE REASSESSM ENT PROCEEDINGS AND LEVIED PENALTY OF RS.31,99,806/-. 7. THE ASSESSEE CARRIED THE MATTER BEFORE THE CIT(A ) AND CONTENDED THAT DUE TO INADVERTENT MISTAKE THE PROVI SION COULD NOT BE ADDED BACK WHICH WAS ADDED BACK DURING THE C OURSE OF THE ASSESSMENT PROCEEDINGS AND PRAYED FOR THE DELET ION OF THE PENALTY. 3 8. THE CIT(A) WAS CONVINCED WITH THE CONTENTION OF THE ASSESSEE AND DRAWING SUPPORT FROM THE DECISION OF T HE HONBLE SUPREME COURT IN THE CASE OF PRICE WATER COOPERS PR IVATE LIMITED 348 ITR 306 DELETED PENALTY SO LEVIED. 9. BEFORE US THE LD. DR RELIED UPON THE JUDGMENT RE PORTED IN 295 ITR 244. 10. PER CONTRA THE COUNSEL FOR THE ASSESSEE STATED THAT THE ASSESSEE HAS BEEN ASSESSED ON MAT AS PER THE PROVIS ION OF THE SECTION 115 JB OF THE ACT AND THEREFORE, IT IS NOT A FIT CASE FOR LEVY OF PENALTY U/S. 271(1) (C) OF THE ACT. 11. WE HAVE CAREFULLY CONSIDERED THE ORDERS OF THE AUTHORITIES BELOW. IT IS NOT IN DISPUTE THAT THE ORIGINAL ASSE SSMENT AS WELL AS REASSESSMENT HAS BEEN COMPUTED AT NIL INCOME AND TH E TAX PAID BY THE ASSESSEE IS ON BOOK PROFIT U/S 115 JB OF THE AC T. IN OUR CONSIDERED OPINION THE FACTS OF THE CASE IN HAND CL EARLY SHOW THAT THIS IS NOT A FIT CASE FOR LEVY OF PENALTY U/S 271 (1) (C) OF THE ACT. IN THE LIGHT OF THE FOLLOWING CIRCULAR OF CBDT :- SUBJECT: PENALTY U/S 271(1)(C) WHEREIN ADDITIONS/DISALLOWANCES MADE UNDER NORMAL PROVISIONS OF THE INCOME TAX ACT, 1901 HUT TAX LEVI ED UNDER MAT PROVISIONS U/S 115 JB/1 15JC, FOR CASES PRIOR T O AD 2016- 17-RCG.- SECTION 115JB OF THE ACT IS A SPECIAL PROVISION FOR LEVY OF MINIMUM ALTERNATE TAX ON COMPANIES, INSERTED BY FIN ANCE ACT 2000 WITH EFFECT FROM I-4-2001. 2. UNDER CLAUSE (III) OF SUB-SECTION (1) O! 'SECTION 2 7! OF THE ACT. PENALTY FOR CONCEALMENT OF INCOME OR FURNISHIN G INACCURATE 4 PARTICULARS OF INCOME IS DETERMINED BASED ON THE 'AMOUNT OF TAX .SOUGHT TO HE EVADED' WHICH HAS BEEN DEFINED INTER CILIA, 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 OR CONCEALED INCOME OR I NCOME IN RESPECT OF WHICH INACCURATE PARTICULARS HAD BEEN FI LED. 3. IN THIS CONTEXT. HONBLE DELHI HIGH COURT IN ITS JU DGMENT DATED 26.8.2010 IN IT A NO. 1420 OF 2009 IN THE CAS E OF NALWA SONS INVESTMENT LTD. (AVAILABLE IN NJRS AS 2010-1.L -0826-2}, HELD THAT WHEN THE TAX PAYABLE ON INCOME COMPUTED U NDER NORMAL PROCEDURE IS LESS THAN THE TAX PAYABLE UNDER THE DEEMING PROVISIONS OF SECTION 115JB OF THE ACT. TH EN PENALTY UNDER SECTION 271(1 )(C) OF THE ACT COULD NOT BE IM POSED WITH REFERENCE TO ADDITIONS 'DISALLOWANCES MADE UNDER NO RMAL PROVISIONS. THE JUDGMENT HAS ATTAINED FINALITY. 4. SUBSEQUENTLY, THE PROVISIONS OF EXPLANATION 4 TO SU B- SECTION (I) OF SECTION 271 OF THE ACT HAVE BEEN SUB STITUTED BY FINANCE ACT. 2015. WHICH PROVIDE FOR THE METHOD OF CALCULATING THE AMOUNT OF TAX SOUGHT TO BE EVADED FOR SITUATION -, EVEN WHERE THE INCOME DETERMINED UNDER THE GENERAL PROVI SIONS IS LESS THAN THE INCOME DECLARED TOR THE PURPOSE OF MA T U/S I I 5.IB OF THE ACT. I HE SUBSTITUTED EXPLANATION 4 IS APPLICABLE PROSPE CTIVE!} VV.E.F. 01.04.2016. 5. ACCORDINGLY, IN VIEW OF THE DELHI HIGH COURT JUDGM ENT AND SUBSTITUTION OF EXPLANATION 4 OF SECTION 271 OF THE ACT WITH PROSPECTIVE EFFECT, IT IS NOW A SETTLED POSITION TH AT 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 PAYABLE ON THE BOOK PROFITS U/S I 15.1 B OF THE ACT, THEN PENALTY UNDER 271 (I) (C) OF THE ACT. IS NOT ATTRAC TED WITH 5 REFERENCE TO ADDITIONS /DISALLOWANCES MADE UNDER NO RMAL PROVISIONS. IT IS FURTHER CLARIFIED THAT IN EASES P RIOR TO 1.4.2016. IF ANY ADJUSTMENT IS MADE IN THE INCOME COMPUTED FO R THE PURPOSE OF MAT. THEN THE LEVY OF PENALTY U/S 27I ( 1 )(C) OF THE ACT. WILL DEPEND ON THE NATURE OF ADJUSTMENT. 6. THE ABOVE SETTLED POSITION IS TO BE FOLLOWED IN RES PECT OF SECTION 115 JC OF THE ACT ALSO. 7. ACCORDINGLY, THE BOARD HEREBY DIRECTS THAT NO APPEA LS MAY HENCEFORTH BE FILED ON THIS GROUND AND APPEALS ALREADY FILED, IF ANY. ON THIS ISSUE BEFORE VARIOUS COURTS/ TRIBUNALS MAY BE WITHDRAWN/NOT PRESSED UPON. THIS MAY BE BROUGHT TO THE NOTICE OF ALL CONCERNED. 12. IN THE LIGHT OF THE AFORESTATED CIRCULAR OF THE CBDT WE HOLD THAT THE LEVY OF PENALTY U/S 271 (1) (C) OF THE ACT IS N OT JUSTIFIED ACCORDINGLY THE ORDER OF THE CIT(A) IS UPHELD AND A PPEAL FILED BY THE REVENUE IS DISMISSED. 13. IN THE RESULT, THE APPEAL FILED BY THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 21.02.2019 SD/- SD/- (H. S. SIDHU) ( N. K. BILLAIYA) JUDICIAL MEMBER ACCOUNT ANT MEMBER *NEHA* DATE:- .02.2019 COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGI STRAR ITAT NEW DELHI 6 DATE OF DICTATION 20.02.2019 DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE OTHER MEMBER DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.PS/PS DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR. PS/ PS DATE ON WHICH THE FINAL ORDER IS UPLOADED ON THE WEBSITE OF ITAT DATE ON WHICH THE FILE GOES TO THE BENCH CLERK DATE ON WHICH FILE GOES TO THE HEAD CLERK. THE DATE ON WHICH FILE GOES TO THE ASSISTANT REGIST RAR FOR SIGNATURE ON THE ORDER DATE OF DISPATCH OF THE ORDER 7