PBA Infrastructure Limited Vs DCIT (ITAT Mumbai)
Assessee challenged penalty u/s 271(1)(c) levied for A.Y. 2003-04 & 2013-14 where additions/disallowances were made under normal provisions though final tax liability was determined under MAT provisions u/s 115JB. Assessee argued that since MAT liability was higher than normal tax, there was no “tax sought to be evaded”, and therefore penalty provisions were not attracted. Reliance was placed on CIT vs. Nalwa Sons Investment Ltd (SC) and CBDT Circular dated 31-12-2015 clarifying that for years prior to 01-04-2016, penalty cannot be imposed where additions under normal provisions do not affect MAT liability.
ITAT observed that Explanation 4 to s.271(1)(c) as amended by Finance Act 2015 applies prospectively and hence cannot be invoked for earlier years. Since tax was finally computed under MAT and not under normal provisions, additions made by AO did not result in any tax evasion. Accordingly, penalties of ₹4,59,353/- for A.Y. 2003-04 and ₹20,69,314/- for A.Y. 2013-14 were directed to be deleted. Appeals of assessee were allowed
FULL TEXT OF THE ORDER OF ITAT MUMBAI
These are two appeals filed by the assessee against the respective orders of the Learned Commissioner of Income Tax (Appeals)-53, Mumbai [`Ld.CIT(A)’], dated 18-03-2025, pertaining to Assessment Years (AYs.) 2003-04 85 2013-14, sustaining levy of penalty u/s. 271(1)(c) of the Income Tax Act, 1961 (the Act’).
