ITAT held proccedings u/s 263 (of Income Tax Act, 1961) was beyond competence of PCIT
ITAT held proccedings u/s 263 (of Income Tax Act, 1961) was beyond competence of PCIT
R P Import & Export Pvt Ltd filed its revised return at 'nil' income. From seized document, AO found assessee had purchased land. AO made addition u/s 69B (of Income Tax Act, 1961). CIT(A) deleted addition. PCIT issued notice u/s 263 (of Income Tax Act, 1961) as no addition in respect of remaining land of about 44 bighas had been made by AO. ITAT held that when document was not relied upon by CIT(A), proccedings u/s 263 (of Income Tax Act, 1961) was beyond competence of PCIT, and quashed the same.-500757
1. Gawande Consultants Pvt ltd filed its return, declaring total income at nil under normal provisions and book profit of Rs 1,39,96,811 u/s 115JB (of Income Tax Act, 1961).
2. AO made certain disallowance under the normal provisions, since the tax due on book profit was more than tax due on income declared under normal provisions.
3. The disallowance made under the normal provisions was not challenged by the assessee.
4. AO initiated proceedings u/s 271(1)(c) (of Income Tax Act, 1961) and imposed penalty.
5. CIT(A) confirmed penalty, but restricted the quantum of penalty to 100% of tax on income sought to be evaded.
On appeal, the ITAT held as under:
6. If the income tax payable on the total income as computed under the normal provisions of the Act is less than the tax payable on the book profit under section 115JB (of Income Tax Act, 1961), then penalty under section 271(1)(c) (of Income Tax Act, 1961) is not attracted with reference to additions / disallowance made under normal provisions.
7. In view of the principle laid down by the Hon'ble Delhi High Court in Nalwa Sons Investments Ltd. (supra) and the circular issued by the CBDT as referred to above, we delete the penalty imposed under section 271(1)(c) (of Income Tax Act, 1961).
Case Reference - M/s R.P. Import & Export P.Ltd. Vs The Principal CIT.
IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH, CHANDIGARH
BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND
Ms.RANO JAIN, ACCOUNTANT MEMBER
ITA No. 421/CHD/2015
(Assessment Year: 2007-08)
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