The Delhi bench of the Income Tax Appellate Tribunal (ITAT) has recently held that the penalty under section 271(1)(c) is not attracted when income tax is payable based on book profit hence the bench granted relief to Havells India.
Assessee-Havells India engaged in the business of manufacturing of switchgears, electrical goods and bath fittings etc.After filing the return assesse’s case was selected for scrutiny.
In the scrutiny proceedings, assessing officer found that assessee had furnished inaccurate particulars of its income and therefore liable for penalty under Section 271(1)(c) of the Income Tax Act. Against the assessment order assesee filed appeal before CIT(A).Thereafter the CIT(A) allowed the appeal of the assessee. The aggrieved revenue filed the present appeal before the ITAT.
Akshat Jain,Counsel for the assessee submitted that CBDT vide circular dated 31.12.2015 has held that where the Income Tax is payable on the basis of book profit under Section. 115JB of the Income Tax Act, then penalty under Section 271(1)(c) Income Tax Act is not attracted with reference to the additional disallowances made under normal provisions.
Avikal Manu Counsel for the revenue supported the assessment order of the assessing officer.
The two member bench of tribunal Chaturvedi, (Accountant Member) and Yogesh Kumar Us, (Judicial Member), after considering the contentions dismissed the appeal filed by the revenue and observed that CIT(A) after considering the submissions of the assessee has given a finding that assessee was subjected to pay taxes under Section 115JB of the Act, even after taking into consideration all the additions made by the AO in the assessment order.
Thereafter by relying on the CBDT circular, held that the penalty under Section 271(1)(c) Income Tax Act was not leviable.
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