2019 (8) TMI 449

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....alty u/s 271(1)(c) of the Income-tax Act, 1961 [hereinafter referred to as 'the Act'] by ignoring the mandate given by the CBDT in its Circular No. 25/2015 dated 31.12.2015. 3. The roots for levy of penalty lie in the assessment order dated 28.01.2014 framed u/s 143(3) of the Act. The returned loss of Rs. 4,36,27,946/- was assessed at a loss of Rs. 2,12,96,520/- after making addition of Rs. 2,23,31,431/-. 4. Tax has been levied u/s 115JB of the Act on book profit of Rs. 6,20,00,680/- on which tax amounting to Rs. 1,23,57,046/- was paid in full. However, penalty proceedings were separately initiated and notices were issued and served upon the assessee. In response to the show cause notice, neither the assessee attended the proc....

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.... of the CIT(A). 9. We have given a thoughtful consideration to the orders of the authorities below. There is no dispute that the assessment completed under normal provisions of the Act was subject to levy of tax on book profit u/s 115JB of the Act. There is also no dispute that the penalty proceedings have been initiated to levy penalty on the tax made under normal provisions of the Act. The dispute is now well settled in favour of the assessee and against the revenue by the decision of the Hon'ble High Court of Delhi in the case of Nalwa Sons Investment Ltd [supra], which has been accepted by the CBDT vide its Circular No. 25/2015, which reads as under: "CIRCULAR NO. 25/2015 F.No.279/Misc./140/2015/ITJ Gov....

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.... judgment has attained finality. 4. Subsequently, the provisions of Explanation 4 to sub-section (1) of section 271 of the Act have been substituted by Finance Act, 2015, which provide for the method of calculating the amount of tax sought to be evaded for situations even where the income determined under the general provisions is less than the income declared for the purpose of MAT u/s 115JB of the Act. The substituted Explanation 4 is applicable prospectively w.e.f. 01.04.2016. 5. Accordingly, in view of the Delhi High Court judgment and substitution of Explanation 4 of section 271 of the Act with prospective effect, it is now a settled position that prior to 1/4/2016, where the income tax payable on the total income as ....