HDA Buildcon Pvt. Ltd., New Delhi V. DCIT, Circle- 11(1), New Delhi

ITA 5617/DEL/2017

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 8517 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 6 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-03-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2013-2014
• Appeal Filed On: 01-09-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 271(1)(c); 143(3); 115JB

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL, DELHI C BEN CH, NEW DELHI (THROUGH VIDEO CONFERENCING] BEFORE SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER, AND MS. SUCHITRA KAMBLE, JUDICIAL MEMBER ITA NO. 5617/DEL/2017 [A.Y 2013-14] M/S HDA BUILDCON PVT LTD. VS. THE C.I.T[A]-35 28, 1 ST FLOOR, DEEPALI, NEW DELHI PITAMPURA, NEW DELHI, PAN : AACCH 4182 M [APPELLANT] [RESPONDENT] DATE OF HEARING : 25.03.2021 DATE OF PRONOUNCEMENT : 25.03.2021 ASSESSEE BY : SHRI SATYAJEET GOEL, CA REVENUE BY : SHRI MAHESH THAKUR, SR . DR ORDER PER N.K. BILLAIYA, ACCOUNTANT MEMBER, THIS APPEAL BY THE ASSESSEE IS PREFERRED AGAINST TH E ORDER OF THE COMMISSIONER OF INCOME TAX [APPEALS]-35, NEW DELHI DATED 28.06.2017 PERTAINING TO ASSESSMENT YEAR 2013-14. 2 2. THE SOLITARY GRIEVANCE OF THE ASSESSEE IS THAT T HE LD. CIT(A) ERRED IN CONFIRMING THE IMPOSITION OF PENALTY OF RS. 4,60 ,000/- IMPOSED BY THE ASSESSING OFFICER U/S 271(1)(C) OF THE INCOME T AX ACT, 1961 [HEREINAFTER REFERRED TO AS 'THE ACT' FOR SHORT]. 3. REPRESENTATIVES OF BOTH THE SIDES WERE HEARD AT LENGTH. CASE RECORDS CAREFULLY PERUSED. 4. THE ROOTS FOR LEVY OF PENALTY LIE IN THE ASSESSM ENT ORDER DATED 15.03.2016 FRAMED U/S 143(3) OF THE ACT. RETURNED INCOME OF THE ASSESSEE RS. 35,65,090/- WAS ASSESSED AT RS. 50,27, 040/-. ASSESSMENT WAS COMPLETED BY MAKING DISALLOWANCE OF DEPRECIATIO N CLAIMED ON RENTED PROPERTY AMOUNTING TO RS. 14,61,948/-. 5. A PERUSAL OF THE COMPUTATION OF TAXABLE INCOME A S PER PROVISIONS OF SECTION 115JB OF THE ACT SHOW THAT TAX PAYABLE C OMES TO RS. 16,18,097/- UNDER THE PROVISIONS OF MAT WHEREAS TAX COMPUTED ON THE ASSESSED INCOME COMES TO RS. 15,53,355/-, WHICH MEA NS THAT THE APPELLANT HAS PAID TAXES AS PER THE PROVISIONS OF S ECTION 115JB OF THE ACT. AS PER THE CBDT CIRCULAR NO. 25/2015 DATED 31. 12.2015, NO 3 PENALTY CAN BE LEVIED ON AN INCOME WHICH HAS BEEN C OMPUTED U/S 115JB OF THE ACT AND PENALTY HAS BEEN LEVIED ON THE ADDITIONS/DISALLOWANCES MADE UNDER NORMAL PROVISION S OF THE ACT. CBDT CIRCULAR REFERRED TO HEREINABOVE READS AS UNDE R: CIRCULAR NO.25/2015 [F.NO.279/MISC./140/2015/ITJ], DATED 31-12-2015 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 SECTION 271 OF THE ACT, PENALTY FOR CONCEALMENT OF INCOME OR FURNISHING INA CCURATE PARTICULARS OF INCOME IS DETERMINED BASED ON THE 'AMOUNT OF TAX SOUGHT TO BE EVADED' WHICH HAS 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 PARTICULARS HAD BEEN FILED. 3. IN THIS CONTEXT, HON'BLE DELHI HIGH COURT IN ITS JU DGMENT DATED 26-8-2010 IN ITA NO.1420 OF 2009 [2010] 194 TAXMAN 387 (DELHI) IN THE CASE OF NALWA SONS INVESTMENT LTD. (AVAILABL E IN NJRS AS 2010-LL- 0826-2), HELD THAT WHEN THE TAX PAYABLE ON INCOME COMPUTED UNDER NORMAL PROCEDURE IS LESS THAN THE TA X PAYABLE UNDER THE DEEMING PROVISIONS OF SECTION 115JB OF TH E ACT, THEN 4 PENALTY UNDER SECTION 271(1)(C) OF THE ACT COULD NO T BE IMPOSED WITH REFERENCE TO ADDITIONS /DISALLOWANCES MADE UND ER NORMAL PROVISIONS. THE JUDGMENT HAS ATTAINED FINALITY. 4. SUBSEQUENTLY, THE PROVISIONS OF EXPLANATION 4 TO SU B-SECTION (1) OF SECTION 271 OF THE ACT HAVE BEEN SUBSTITUTED BY FINANCE ACT, 2015, WHICH PROVIDE FOR THE METHOD OF CALCULATING T HE AMOUNT OF TAX SOUGHT TO BE EVADED FOR SITUATIONS EVEN WHERE T HE INCOME DETERMINED UNDER THE GENERAL PROVISIONS IS LESS THA N THE INCOME DECLARED FOR THE PURPOSE OF MAT U/S 115JB OF THE AC T. THE SUBSTITUTED EXPLANATION 4 IS APPLICABLE PROSPECTIVE LY W.E.F. 1-4- 2016. 5. ACCORDINGLY, IN VIEW OF THE DELHI HIGH COURT JUDGME NT 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 IN COME AS COMPUTED UNDER THE NORMAL PROVISIONS OF THE ACT IS LESS THAN THE TAX PAYABLE ON THE BOOK PROFITS U/S 115JB OF THE AC T, THEN PENALTY UNDER SECTION 271(1)(C) OF THE ACT, IS NOT ATTRACTE D WITH REFERENCE TO ADDITIONS /DISALLOWANCES MADE UNDER NORMAL PROVI SIONS. IT IS FURTHER CLARIFIED THAT IN CASES PRIOR TO 1-4-2016, IF ANY ADJUSTMENT IS MADE IN THE INCOME COMPUTED FOR THE PURPOSE OF M AT, THEN THE LEVY OF PENALTY U/S 271(1)(C) OF THE ACT, WILL DEPE ND ON THE NATURE OF ADJUSTMENT. 6. THE ABOVE SETTLED POSITION IS TO BE FOLLOWED IN RES PECT OF SECTION 115JC OF THE ACT ALSO. 5 7. ACCORDINGLY, THE BOARD HEREBY DIRECTS THAT NO APPEA LS MAY HENCEFORTH BE FILED ON THIS GROUND AND APPEALS ALRE ADY FILED, IF ANY, ON THIS ISSUE BEFORE VARIOUS COURTS/TRIBUNALS MAY B E WITHDRAWN/NOT PRESSED UPON. THIS MAY BE BROUGHT TO THE NOTICE OF ALL CONCERNED. 6. IN LIGHT OF THE AFOREMENTIONED CIRCULAR, WE DIRE CT THE ASSESSING OFFICER TO DELETE THE PENALTY LEVIED U/S 271(1)(C) OF THE ACT. 7. IN THE RESULT, THE APPEAL FILED BY THE ASSESSE E IN ITA NO. 5617/DEL/2017 IS ALLOWED. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 25.03. 2021 IN THE PRESENCE OF BOTH THE REPRESENTATIVES. SD/- SD/- [ SUCHITRA KAMBLE ] [N.K. BILLAIYA] JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 25 TH MARCH, 2021 VL/ 6 COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR ASST. REGISTRAR, ITAT, NEW DELHI DATE OF DICTATION 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 THE FILE GOES TO THE HEAD CLERK THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATURE ON THE ORDER DATE OF DISPATCH OF THE ORDER