In DCIT v. M/s Associate Alcohols & Breweries Ltd, the division bench of the Kolkata ITAT held that penalty under section 271(1)(c) of the Income Tax Act cannot be levied in cases where assessee paid income tax under the Minimum Alternative Tax (MAT) provisions.
Assessee-Company paid the taxes under provisions of Minimum Alternate Tax (MAT) u/s 115JB of the Act. While completing assessment against the assessee, the AO made an addition of income and initiated penalty proceedings against the assessee finding that the assessee has not conceded capital gain income and deduction claimed u/s 80JJA of the Act with supporting documents.
The first appellate authority, however, deleted the penalty order aggrieved by the order, department preferred an appeal before the Tribunal.
Assessee relying on the CBDT Circular No. 25/2015 dated 31.12.2015, contended that there was no tax liability under normal provisions of law and hence, the addition made under the normal provisions of law cannot be subject matter of penalty where the taxes are paid under MAT provisions.
Accepting the above contentions, the bench noted that “in the present case the income of the assessee was charged under the MAT provisions and there is no doubt in this regard. Thus, there is no question for levying the penalty u/s 271(1)(c) of the Act for the additions made under the normal provisions of law. In these circumstances, we are of the view that imposition of penalty cannot be sustained.”
Read the full text of the Order below.
