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CBDT notifies revised Rules for quoting of PAN and reporting of transactions to tax authorities




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CIRCULAR NO. 25/20] 5

F.No.279/Mise./140/2015/1T.1 Government of India Ministry of Finance Central Board of Direct Taxes

New Delhi, 31st December, 2015

Subject: Penalty u/s 271(1)(c) wherein additions/disallowances made under normal provisions of the Income Tax Act, 1961 but tax levied under MAT provisions u/s 115.1B/115JC, for cases prior to A.Y. 2016-17-reg.-

Section 115313 of the Act is a special provision for levy of Minimum Alternate Tax on Companies, inserted by Finance Act 2000 with effect from 1-4-2001.

2. Under clause (iii) of sub-section (1) of section 271 of the Act, penalty for concealment of income or furnishing inaccurate particulars of income is determined based on the "amount of tax sought to be evaded' which has been defined inter-alia, as the difference between the tax due on the income assessed and the tax which would have been chargeable had such total income been reduced by the amount of concealed income or income in respect of which inaccurate particulars had been filed.

3. In this context, Hon'ble Delhi High Court in its judgment dated 26.8.2010 in ITA No:1420 of 2009 in the case of Nalwa Sons Investment Ltd. (available in NJRS as 2010-1,1,-0826-2), held that when the tax payable on income computed under normal procedure is less than the tax payable under the deeming provisions of Section 115.113 of the Act, then penalty under section 271(1)(c) of the Act could not be imposed with reference to additions /disallowances made under normal provisions. 'Me 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 F,xplanation 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 computed under the normal provisions of the Act is less thim the tax payable on the book profits u/s 115.113 of the Act, then penalty under 271(1)(c) of the Act, is not attracted with reference to additions /disallowances made under normal provisions. It is further clarified that in cases prior to 1.4.2016, if any adjustment is made in the income computed for the purpose of MAT, then the levy of penalty u/s 271(1)(c) of the Act, will depend on the nature of adjustment.

6. The above settled position is to be followed in respect of section 115JC of the Act also.

7. Accordingly, the Board hereby directs that no appeals may henceforth be filed on this ground and appeals already filed, if any, on this issue before various Courts Tribunals may be withdraw-n/not pressed upon. This may he brought to the notice of all concerned.

(Ramjit Caur Seth) 
DCI OSD) (ITJ), 
CBDT ;New Delhi

Copy to: 
1. The Chairperson, Members and officers of the CBDT of the rank of (hider Secretary and above. 
2. All Pr. Chief Commissioners of Income-Tax & All Directors General of Income-Tax with a request to bring to the attention of all officers. 
3. The Pr. Director General of Income-Tax, NADT, Nagpur. 
4. The Pr. DGIT (Systems), ARA Centre, Jhandewalan Extension, New Delhi. 
5. The Pr. DGIT (Vigilance), New Delhi. 
6. The ADO (PR, PP & 01,), Mayur Bhawan, New Delhi for printing in the quarterly tax bulletin and for circulation as per usual mailing list (1(10 copies). 
7. The Comptroller and Auditor General of India (40 copies). 
8. The ADG-4 (Systems) for uploading on ITD website. 
9. Data Base Cell for uploading on irsoffleersonline. 
10. Guard file.

(Ramjit Caur Seth) 
DCI OSD) (ITJ), 
CBDT ;New Delhi


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