Case Law Details
No penalty can be imposed u/s 271(1)(c) wherein though the addition has been made but the tax effect did not change with the amount of addition
Held: This was an appeal filed by the department against the penalty deleted by the Ld. CIT(A). The assessee is a software company claiming deduction u/s 10B of the Act. During the quantum proceedings, the then assessing officer disallowed the deduction claimed u/s 10B of the Act of Rs. 31,52,432/- on the ground that the approval granted to the assessee, which made entitled the assessee for deduction u/s 10B, had expired on 31/03/2005 i.e. the deduction u/s 10B of the Act was not available to assessee in the relevant year under consideration. The assessee had brought forward business losses of Rs. 41,63,125/- and after setting off these losses with the disallowance made, the net total income of the assessee come out to NIL.
The Assessing officer in penalty proceeding imposed the concealment penalty on disallowance made u/s 10B of the Act. The Ld. CIT(A) deleted the penalty on the ground that the deduction was claimed by the assessee on the basis of certificate issued by the Chartered accountant in Form 56G; the approval of 100% EOU expired after 31.03.2005 and assessee could not get extension of approval though it was undisputed fact that the assessee had made exports, received foreign exchange and claimed deduction u/s 10B; in the assessment order income assessed for the year under the normal provision of the act is Rs. 31,52,432/-, which is set off by the business loss of Rs. 41,63,125/- and after setting off of taxable income under normal provision became NIL; tax paid by the assessee u/s 115JB amounting to Rs. 2,62,702/- is exactly the same which is payable after the assessment u/s 143(3) of the Act. Therefore, it was a bonafide mistake on the part of the assessee.
The Hon’ble ITAT of Mumbai Bench passed the order confirming the order of Ld. CIT(A) and decided that the tax has been charged by the revenue on the basis of computation made u/s 115JB of the Act which is same as submitted by the assessee and no addition has been made by the then Assessing officer u/s 115JB of the Act. Thus, the Hon’ble Bench relying upon the judgment of Hon’ble Delhi high Court in the case of CIT Vs. Nalwa Sons Investments and dismissed the appeal filed by the Revenue.
INCOME TAX APPELLATE TRIBUNAL, MUMBAI
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Thanks for sharing such a good judgment….