- (1.) This appeal has been filed by the Revenue under section 260A of the Income-tax Act, 1961 (in short "the Act"), against the order dated April 5, 2013, passed by the Income-tax Appellate Tribunal, Delhi Bench "G", New Delhi (hereinafter referred to as "the Tribunal") for the assessment year 2007-08, claiming the following substantial questions of law: "(a) Whether the hon'ble Income-tax Appellate Tribunal is justified in law in deleting the penalty under section 271(1)(c) of the Act imposed by the Assessing Officer as the assessee filed the return of income without computing the correct tax liability under section 115JB read with section 10(38) of the Act and, thus, failed in disclosing the true and correct tax liability under section 115JB of the Act; the hon'ble Income-tax Appellate Tribunal failed to appreciate the fact that the assessee-company filed a revised computation of income only after detection of concealment by the Assessing Officer? (b) Whether, on the facts and in the circumstances of the case, the hon'ble Income-tax Appellate Tribunal is justified in law by relying upon the judgment of CIT v. Reliance Petroproducts P. Ltd., 2010 322 ITR 158 (SC) the facts of which are quite distinct and are, therefore, not applicable in the instant case?" Briefly the facts as pleaded in the instant appeal may be noticed. The assessee was deriving income under the head "Business and profession" by trading in share and also from investment in shares. The assessee filed its return of income for the assessment year 2007-08 on September 30, 2007, declaring a total income of Rs. 1,53,56,681. The total tax computed by the assessee in the computation of income was Rs. 30,42,878. During the course of the assessment proceedings, the Assessing Officer noted that the assessee was liable to pay tax under the provisions of section 115JB of the Act. Further, Form No. 29B required to be filed under section 115JB(4) of the Act was not filed. The assessee claimed exemption under section 10(38) of the Act on the long-term capital gains on sale of securities/shares. As per the proviso to section 10(38) of the Act, the profit on long-term capital gains was to be added while computing the book profit and tax liability under section 115JB of the Act. The case was selected for scrutiny. During the course of the assessment proceedings, the assessee filed a revised computation of income and Form No. 29B on December 4, 2009. The book profit of the assessee was computed at Rs. 4,77,25,617 and the tax liability under section 115JB of the Act was computed at Rs. 47,72,562 (10 per cent of the book profit). The Assessing Officer, vide order dated December 18, 2009 (annexure A-I) framed assessment and initiated penalty proceedings under section 271(1)(c) of the Act. The assessee did not challenge the assessment order in appeal. Thereafter, a penalty of Rs. 13,58,452 was imposed upon the assessee, vide order dated June 28, 2010 (annexure A-II). Feeling aggrieved, the assessee filed an appeal before the Commissioner of Income-tax (Appeals) (for brevity "the CIT(A)") who, vide order dated March 10, 2011 (annexure A-III) allowed the appeal and deleted the penalty imposed by the Assessing Officer. The said order of the Commissioner of Income-tax (Appeals) was challenged by the Revenue by way of appeal before the Tribunal. The Tribunal, vide order dated April 5, 2013 (annexure A-IV) upheld the order of the Commissioner of Income-tax (Appeals) and dismissed the appeal. Hence, the present appeal by the Revenue.
(2.) Learned counsel for the appellant submitted that the Commissioner of Income-tax (Appeals) as well as the Tribunal had erred in deleting the penalty. According to the learned counsel, a proviso to section 10(38) of the Act which was inserted with effect from April 1, 2007, the long-term capital gains on shares was to be added while computing the book profit as per the provisions of section 115JB of the Act. The assessee had filed a revised computation only after the concealment was detected by the Assessing Officer on issuance of notice under section 142(1) and section 143(2) of the Act. It was urged that the reliance of the Tribunal on the decision of the apex court in CIT v. Reliance Petroproducts P. Ltd., 2010 322 ITR 158 (SC) : 230 CTR 320 (SC) was misplaced.
(3.) On the other hand, the learned counsel for the assessee besides supporting the order passed by the Tribunal submitted that the Finance Act of 2006 amended with effect from April 1, 2007, whereby a proviso was inserted for the first time which was made relevant for the assessment year in question. It was under a bona fide belief, unaware of the amendment whereby a proviso was inserted, the long-term capital gains on the shares was not taken into consideration while determining the book profits under section 115JB of the Act. It was stoutly argued that the Tribunal has rightly placed reliance upon Reliance Petroproducts Ltd.'s case and deleted the penalty.;