2025 (3) TMI 1804

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....rt referred to as "CIT(A)"), cancelling penalty levied under section 271(1)(c) of the Income Tax Act, 1961 (hereinafter referred to as 'the Act') relating to the Assessment Year 2011-12. 2. Brief facts of the case is that the assessee is a company constituted under the Electricity Act, 2003 and subsidiary of Gujarat Electricity Board. The assessee is engaged in the business of generation of electricity. For the Asst. Year 2011-12, assessee filed its Return of Income on 27-09-2011 declaring nil income, after setting off brought forward losses of Rs. 177,69,81,562/- and as per the Book Profit under 115JB of Rs. 179,31,09,000/-. The return was taken up for scrutiny assessment and several additions and disallowances made by the Assessing Off....

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....t attracted. Accordingly, the same is deleted." 5. Aggrieved against the appellate order, the Revenue is in appeal before us raising the following Grounds of Appeal: (i) Whether on the facts and in the circumstances of the case and in law, the Ld.CIT(A) is justified in deleting the penalty u/s 271(1)(c) of the Act, relying on the CBDT's circular 25 of 2015 dated 31-12-2015 in a case where additions have also been made in the income computed u/s 115JB of the Act. (ii) Whether on the facts and in the circumstances of the case and in law, the Ld CIT(A) is justified in deleting the penalty u/s 271(1)(c) of the Act without adjudicating the issue on merits, under the circumstance where the quantum addition made u/s 115JB ....

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.... penalty under section 271(1)(c) of the Act could not be imposed with reference to additions/disallowances made under normal provisions. The 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 wef 1-4-2016. 5. Accordingly, in view of the Delhi High Court judgment and substitution of Explanation 4 of section 271 of the....