MAT-based tax computation defeats concealment penalty on normal provision additions for periods before the 2016 amendment.

Penalty under section 271(1)(c) was held not leviable where the assessee's tax liability was ultimately computed under section 115JB and the additions related only to the normal provisions. The Delhi High Court position in Nalwa Sons Investment Ltd. and CBDT Circular No. 25/2015 supported the view that, for periods before 01.04.2016, concealment penalty is not attracted when tax payable under MAT exceeds tax under normal computation. The substituted Explanation 4 to section 271 was treated as prospective from 01.04.2016, so the penalty order was deleted and the assessee succeeded.

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Issues: Whether penalty under section 271(1)(c) of the Income-tax Act, 1961 was leviable where the assessee's tax liability was ultimately computed under section 115JB of the Income-tax Act, 1961 and the penalty was imposed with reference to additions made under the normal provisions.

Analysis: The assessment resulted in tax being determined under the MAT provisions, while the penalty was linked to additions under the normal computation. The applicable legal position had already been settled in favour of the assessee by the Delhi High Court in Nalwa Sons Investment Ltd., and the CBDT Circular No. 25/2015 clarified that, for periods prior to 01.04.2016, penalty under section 271(1)(c) is not attracted with reference to additions or disallowances made under the normal provisions where tax payable under section 115JB exceeds tax under normal computation. The substituted Explanation 4 to section 271 was also noted to operate prospectively from 01.04.2016.

Conclusion: Penalty under section 271(1)(c) was not leviable on the additions made under the normal provisions, and the penalty was directed to be deleted in favour of the assessee.

Final Conclusion: The appeal succeeded and the penalty order did not survive.

Ratio Decidendi: Where tax is finally assessed under the MAT provisions and the additions relate only to normal computation, penalty for concealment or inaccurate particulars under section 271(1)(c) is not attracted for periods prior to the prospective amendment effective from 01.04.2016.

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