ACIT, New Delhi V. M/s Bhushan Steel Ltd., New Delhi

MA 103/DEL/2019

AI Insights

The case revolves around a dispute concerning the penalty levied by the Assessing Officer (AO) under section 271(1)(c) of the Income Tax Act, following adjustments made to the book profits of M/s. Bhushan Steel Ltd. for the Assessment Year 2008-09. The AO had enhanced the book profits from Rs. 488.78 Cr to Rs. 540 Cr, leading to a tax liability of Rs. 5.96 Cr under the provisions of section 115JB of the Act. The CIT(A) deleted the penalty, citing the adjustments as highly debatable. The revenue's appeal to the Tribunal sought to challenge this deletion, arguing that the penalty should be reconsidered on merits rather than being dismissed based on the Board's Circular No 25/2015, which was deemed inapplicable by the Tribunal.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 121496 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 8 month(s) 28 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 09-02-2023
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 17-11-2022
• Assessment Year: 2008-2009
• Appeal Filed On: 12-05-2019
• Other Referred Cases: ITA No.700/Del/2012, ITA No.701/Del/2012
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 271(1)(c); 143(3); 14A; 115JB

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “A” NEW DELHI BEFORE SH. C.M. GARG, JUDICIAL MEMBER AND SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER MA No.103/Del/2019 (In ITA No.2098/Del/2015) Assessment Year : 2008-09 ACIT, Circle-3 New Delhi Vs. M/s. Bhushan Steel Ltd F-Block, International Trade Tower, Nehru Place, New Delhi PAN No.AACCB7445H (Appellant) (Respondent) Department by : Sh. Kanav Bali, Sr. DR Assessee by : Sh. Pancham Sethi, CA Date of hearing : 10-02-2023 Date of pronouncement : 10-02-2023 O R D E R PER N.K BILLAIYA, AM : This Miscellaneous Application by the revenue is directed towards the order of this Tribunal dated 20.08.2018 in ITA No.2098/Del/2015 for A.Y. 2008-09. 2. The relevant contents of the miscellaneous application read as under :- “Kindly refer to the above mentioned subject. In this case, the Hon'ble ITAT has deleted the penalty levied by the Assessing Officer on the wrong application of facts. The: Assessing Officer in assessment u/s 143(3) determined the tax u/s 115JB of the IT Act as the tax payable under regular provisions (despite sizable additions made) was less than tax on book profits as determined by Assessing Officer. 2 Assessing Officer also made certain adjustments to book profits, enhancing the same from Rs. 488.78 Cr to Rs. 540 Cr. (Page 16 and 17 of assessment orde r ) . The Assessing Officer levied penalty u/s 271(1)(C) on such enhanced tax payable by assessee of Rs 5.96 Cr. Ld. CIT(A) deleted the penalty on the ground that adjustments to book profits on account of 80HHC deduction and 14A disallowances are though not contested by assessee, highly debatable in nature. Hon'ble ITAT has confirmed such cancellation of penalty by Ld. CIT(A) relying on Board's Circular No 25/2015 holding that no penalty on regular additions can be levied when tax is levied u/s 115JB of the IT Act. Thus the relief is granted by the Tribunal on the wrong application of facts in as much as AO has levied penalty for adjustments of book profits and not for additions made under normal provisions. This being the case, it is therefore prayed to decide the penalty on merits rather than on the basis of Board’s Circular 25/2015 which is not applicable to the facts of the case.” 3. Representatives of both the sides were heard at length. Case records carefully perused. Assuming yet not accepting the contents of the miscellaneous application as correct then also the adjustments to book profits on account of 80 HHC deduction and 14A disallowance are highly debatable issue. Moreover in assessee’s own case in A.Y.2005-06 and 2006-07 in ITA No.700 and 701/Del/2012 this Tribunal on identical set of facts has dismissed the appeal of the revenue on levy of penalty u/s. 271 (1) (c) of the Act. 4. Considering the contents of the miscellaneous application from this angle also the fate of the revenue’s appeal would be the same, therefore, we do not find any merit in this miscellaneous application by the revenue and the same is dismissed. 3 5. Decision announced in the open court in the presence of both the parties on 10.02.2023. Sd/- Sd/- (C.M.GARG) (N. K. BILLAIYA) JUDICIAL MEMBER ACCOUNTANT MEMBER Dated: -02-2023 *Neha* Copy of order to: - 1) The Appellant 2) The Respondent 3) The CIT 4) The CIT(A) 5) The DR, I.T.A.T., New Delhi//True Copy// Assistant Registrar ITAT, New Delhi