MAT computation controls penalty exposure when normal-computation disallowance does not affect tax payable under section 115JB.

Penalty for concealment was not justified where the assessment ultimately resulted in tax under section 115JB on the assessee's own MAT computation and no addition was made in the MAT working. The disallowance of deduction under section 10B affected only the normal computation, which was absorbed by available business losses and did not change the tax payable under MAT. On that footing, concealment or inaccurate particulars in the normal computation had no tax impact, so penalty under section 271(1)(c) was held to be not leviable and was deleted.

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Issues: Whether penalty under section 271(1)(c) of the Income-tax Act, 1961 was leviable where the assessment resulted in tax under section 115JB of the Income-tax Act, 1961 and there was no addition under the MAT computation.

Analysis: The assessment order showed that the tax liability was ultimately determined under section 115JB of the Income-tax Act, 1961 on the basis of the assessee's own computation, and no addition was made in the MAT computation. The disallowance of deduction under section 10B of the Income-tax Act, 1961 affected only the normal computation, which stood absorbed by available business losses. In these circumstances, the concealment, if any, did not alter the tax payable under the MAT provisions. The Tribunal applied the principle that where taxation is ultimately governed by section 115JB and the normal computation has no tax impact, penalty for concealment or furnishing inaccurate particulars is not warranted.

Conclusion: Penalty under section 271(1)(c) was not leviable, and deletion of the penalty was upheld in favour of the assessee.

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