Case Number: ITA 2342/DEL/2022
Appellant: Jindal ITF Ltd, Delhi
Respondent: DCIT, Circle-13(2), Delhi
Assessment Year: 2015-16
Case Filed on: 2022-09-23
Order Type: Final Tribunal Order
Date of Order: 2023-08-24
Pronounced on: 2023-08-24
The appeal by Jindal ITF Ltd challenges the imposition of a substantial penalty related to the conversion of Compulsorily Convertible Debentures (CCDs), which resulted in a disallowance amounting to Rs.5,26,23,522/- during the assessment year 2015-16.
During the tribunal hearing, the primary issue was whether the penalty under Section 271(1)(c) of the Income Tax Act, 1961 for the disallowance made under normal provisions of the Act could be sustained when the tax was computed under the Minimum Alternate Tax (MAT) provisions of Section 115JB. The appellant contended that the disallowance should not attract a penalty as it did not impact the tax liability due to the operation of MAT.
The Tribunal reviewed CBDT Circular No. 25/2015 and relevant judicial precedents, including the ruling by the Delhi High Court in Nalwa Sons Investment Ltd., which held that where tax under normal provisions is less than the tax payable under MAT, penalties for concealment under Section 271(1)(c) should not apply. This legal perspective was decisive in the tribunal’s judgment.
The Tribunal found that the penalties were not applicable as the additions made under normal provisions did not affect the tax liability under MAT for the relevant assessment year. It noted that the assessee had acted in a bona fide manner by correcting a clerical error related to the premium on debentures and had not sought to evade tax intentionally.
The panel, therefore, set aside the CIT(A)’s decision and directed the Assessing Officer to cancel the penalty, providing significant relief to Jindal ITF Ltd. The decision underscores the importance of considering the specific circumstances and intentions behind discrepancies in tax filings.
Order pronounced in the open court on August 24, 2023.
Jindal ITF Ltd’s Tax Penalty Appeal for AY 2015-16 – ITA 2342/DEL/2022
Manage the increasing number of hearings effortlessly by leveraging the legal AI revolution We are India's Leading revolutionary AI-powered legal platform where you can get enough insights into top cases and judgements.
Research Platform