DCIT, CHENNAI V. M/s. Deccan's Park Ltd., CHENNAI

ITA 2209/CHNY/2013

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 73636 (ITAT-CHENNAI)
• Duration Of Justice: 1 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-01-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2009-2010
• Appeal Filed On: 19-12-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: N MADHAVAN
• Assessee Lawyers: D ANAND
• Keywords: Depreciation; Revised return

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH : CHENNAI . , . . , ! ' [BEFORE SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMB ER AND SHRI S. S. GODARA, JUDICIAL MEMBER] ./ I.T.A.NO.2209/MDS/2013 / ASSESSMENT YEAR : 2009-10 THE DY. CIT CENTRAL CIRCLE III(4) CHENNAI VS. M/S DECCANS PARK LTD NO.24/46, DR. B.N.ROAD, T. NAGAR CHENNAI 600 017 [PAN AABCD 2110 Q] ( #$ / APPELLANT) ( %&#$ /RESPONDENT) / APPELLANT BY : SHRI N. MADHAVAN, JCIT /RESPONDENT BY : SHRI D. ANAND, ADVOCATE / DATE OF HEARING : 30-01-2014 ! / DATE OF PRONOUNCEMENT : 31-01-2014 ' / O R D E R PER S.S.GODARA, JUDICIAL MEMBER THIS APPEAL FILED BY THE REVENUE FOR ASSESSMENT Y EAR 2009-10, IS DIRECTED AGAINST THE ORDER OF THE COMMI SSIONER OF INCOME- TAX (APPEALS)(C)-II CHENNAI, DATED 27.09.2013, PASS ED IN APPEAL NO.44/12-13, DELETING PENALTY IMPOSED U/S 271(1)(C ) OF THE INCOME- TAX ACT, 1961 [IN SHORT THE ACT]. I.T.A.NO. 2209/13 :- 2 -: 2. THE FOLLOWING GROUNDS HAVE BEEN PLEADED IN THE APPE AL: 2.1 THAT, IN THE FACTS AND CIRCUMSTANCES OF TH E CASE, THE ID. CIT(A) HAS ERRED IN DELETING THE PENALTY IMPOSED ON THE AS SESSEE FOR INCORRECT CLAIM OF DEPRECIATION AND ALLOWING RELIEF TO THE AS SESSEE, ON THE BASIS OF THE DECISION IN RELIANCE PETROPRODUCTS PVT. LTD 322 ITR 158(SC) AND PRICE WATERHOUSE COOPERS P LTD 384 ITR 306 (SC) , AS THE ASSESSEE HAS FAILED TO SUBSTANTIATE DURING THE COUR SE OF PENALTY PROCEEDINGS U/S 271(1)(C) THAT THE MISTAKE WAS INAD VERTENT AND THAT INACCURATE PARTICULARS WERE NOT FURNISHED. 2.2 THE ID.CIT(A) HAS FURTHER FAILED TO OBSERVE THAT THE HON'BLE DELHI HIGH COURT IN THE CASE OF CIT VS HCLL KALINDE E ARSSPL, TS- 368-HC-2013 (DEL.), HAS HELD THAT EVEN FILING OF FO RMS/CERTIFICATES CANNOT ABSOLVE AND PROTECT AN ASSESSEE FROM LEVY OF PENALTY U/S 271 (1)(C) WHO FURNISHED INACCURATE PARTICULARS OF INCO ME. 2.3 THE ID.CIT(A) HAS ALSO FAILED TO OBSERVE THAT IN THE CASE OF M/S MORGAN FINVEST PVT. LTD(TS 345 - SC - 2013),THE HON 'BLE DELHI HIGH COURT UPHELD LEVY OF PENALTY U/S 271 (1)(C) AS QUES TIONABLE PARTICULARS WERE FURNISHED WITH RESPECT TO DEPRECIATION CLAIM O N IMMOVABLE PROPERTY, WHICH WAS ALSO UPHELD BY HON'BLE SUPREME COURT WHICH DISMISSED ASSESSEE'S SLP AGAINST THE SAID DECISION OF THE HON'BLE HIGH COURT. 2.4 THE ID. CIT(A) HAS FAILED TO NOTE THAT IN THE CASE OF CIT VS MANJUNATHA COTTON AND GINNING FACTORY (KAR.), IT WA S HELD THAT PENALTY U/S 271(1 )(C) IS LEVIABLE IN A CASE WHERE ASSESSEE AGREED TO ADDITIONS TO BUY PEACE. 2.5 THUS IN VIEW OF THE ABOVE DECISIONS, THE PENAL TY WAS RIGHTLY LEVIED IN THE CASE OF THE ASSESSEE AND THEREFORE TH E LD. CIT(A) HAS ERRED IN DELETING THE SAME. 3. IN THE COURSE OF HEARING, THE REVENUE ARGUES THAT T HE CIT(A) OUGHT TO HAVE CONFIRMED THE IMPUGNED PENALTY OF ` 65,46,446/- IMPOSED IN THE PENALTY ORDER DATED 19.6.2012 AS THE ASSESSEE HAD CONCEALED AND FURNISHED INACCURATE PARTICULARS OF I NCOME IN THE COURSE I.T.A.NO. 2209/13 :- 3 -: OF REGULAR ASSESSMENT. ACCORDINGLY, IT PRAYS FOR ACCEPTANCE OF THE APPEAL. 4. PER CONTRA, THE ASSESSEE ARGUES THAT SINCE THE DE PRECIATION CLAIM HAD BEEN DISALLOWED BY THE ASSESSING OFFICER TO THE EXTENT OF 50% ONLY ON THE BASIS OF THE VERY PARTICULARS FILED WITH THE RETURN, IT CANNOT BE STATED TO HAVE EITHER CONCEALED OR FURNIS HED INACCURATE PARTICULARS OF INCOME. IN VIEW THEREOF, IT PRAYS FO R UPHOLDING THE CIT(A)S ORDER. 5. THE ASSESSEE IS A COMPANY. IT IS ENGAGED IN HOTE L BUSINESS. ON 30.9.2009, THE ASSESSEE FILED ITS RETURN DISCLO SING INCOME OF ` NIL. THEREAFTER, ON 26.11.2009, IT HAD REVISED ITS RETUR N. THIS TIME, THE INCOME DECLARED STOOD AT ` 18,28,999/-. THE SAME WAS SUMMARILY PROCESSED. 6. IN THE COURSE OF SCRUTINY, THE ASSESSING OFFICER NOTICED THE ASSESSEE TO HAVE CLAIMED FULL DEPRECIATION QUA WIND MILL AND HOTEL BUILDING. AFTER VERIFYING THE DETAILS SUBMITTED IN SUPPORT, HE CAME TO THE CONCLUSION THAT THE ASSESSEE HAD PUT THE AFORE SAID ASSETS TO USE FOR A PERIOD OF LESS THAN 180 DAYS. IN VIEW THEREO F, THE ASSESSING OFFICER RESTRICTED THE DEPRECIATION CLAIM TO 50% ON LY I.E ` 90,85,960/- I.T.A.NO. 2209/13 :- 4 -: IN THE ASSESSMENT ORDER DATED 30.12.2011. IN HIS V IEW, THIS ACTION OF THE ASSESSEE IN CLAIMING DEPRECIATION AT FULL RATE AMOUNTED TO CONCEALMENT AND FURNISHING OF INACCURATE PARTICULAR S OF INCOME. SO, THE ASSESSING OFFICER INITIATED PENALTY PROCEEDINGS U/S 271(1)(C) OF THE ACT. THERE IS NO DISPUTE BETWEEN THE PARTIES T HAT THE ASSESSEE DID NOT PURSUE THE MATTER IN APPEAL. 7. IN PENALTY PROCEEDINGS, THE ASSESSEE STRONGLY CONT ESTED THE PENALTY NOTICE BY SUBMITTING THAT NEITHER IT HAD CO NCEALED NOR FURNISHED INACCURATE PARTICULARS OF INCOME. IF FUR THER PLEADED THAT THERE WAS ONLY A CLERICAL MISTAKE IN COMPUTATION WH ICH WOULD NOT ATTRACT PENALTY IN THE GIVEN CIRCUMSTANCES OF THE C ASE. WE FIND FROM THE PENALTY ORDER DATED 19.6.2012 THAT THE ASSESSIN G OFFICER WAS NOT CONVINCED WITH THE AFORESAID EXPLANATION OF THE AS SESSEE. WHILST IMPOSING THE IMPUGNED PENALTY, HE HELD THAT AS THE ASSESSEE HAD TAKEN ALMOST TWO MONTHS TO FILE REVISED RETURN AND CLAIMED EXCESS DEPRECIATION, THE SAME ATTRACTED PENALTY U/S 271( 1)(C) OF THE ACT AS ITS CONDUCT WAS A CASE OF CONCEALMENT AND FURNISHIN G OF INACCURATE PARTICULARS OF INCOME. 8. AGGRIEVED, THE ASSESSEE PREFERRED APPEAL. WE FIND THAT THE CIT(A) HAS DELETED THE IMPUGNED PENALTY BY HOLDING THAT THE CLAIM OF I.T.A.NO. 2209/13 :- 5 -: EXCESS DEPRECIATION WAS ONLY AN INADVERTENT MISTAKE IN COMPUTATION PART AND NOT A CASE OF CONCEALMENT OR THAT OF FURNI SHING INACCURATE PARTICULARS OF INCOME. THE FINDINGS UNDER CHALLENG E READ AS FOLLOWS: 4.2 I HAVE CAREFULLY CONSIDERED THE FACTS OF THE CASE, GROUNDS OF APPEAL AND THE SUBMISSIONS MADE BY THE LEARNED AR. THE CONTENTION OF THE APPELLANT ARE FOUND TO BE CORRECT AND I ALSO FIND THAT THE FACTS OF THE APPELLANT'S CASE ARE COVERED BY THE RATIO OF TH E DECISION OF HON'BLE SUPREME COURT IN THE CASES OF PRICE WATERHOUSE COOP ERS.PVT, LTD. V. CIT (2012) 348 ITR 306 (SC) AND CIT V. RELIANCE PETROPRODUCTS PVT. LTD. SC 322 ITR 158 IN AS MUCH AS THIS IS A CASE OF INADVERTENT ERROR WHICH IS DISCERNIBLE FROM THE STATEMENT OF DEPRECIA TION AS PER INCOME TAX ACT, BEING PART OF THE APPELLANT'S RETURN OF IN COME. IT APPEARS THAT ALL THAT HAS HAPPENED IN THE PR ESENT CASE IS THAT THROUGH A BONA FIDE AND INADVERTENT ERROR, THE APPELLANT WHILE SUBMITTING ITS REVISED RETURN, INADVERTENTLY CLAIME D UNDER PERCENT DEPRECIATION AS AGAINST ELIGIBLE DIVISION OF 50%, E VEN THOUGH THE STATEMENT OF DEPRECIATION FILED WITH THE RETURN SHO WS THE SAME ASSETS TO HAVE BEEN PUT TO USE FOR LESS THAN 180 DAYS. THI S CAN ONLY BE DESCRIBED AS A HUMAN ERROR WHICH WE ARE ALL PRONE T O MAKE. THE EXPERIENCE OR THE EXPERT ADVICE AVAILABLE TO THE AP PELLANT HAS LITTLE OR NOTHING TO DO WITH THE INADVERTENT ERROR. THAT THE APPELLANT SHOULD HAVE BEEN CAREFUL CANNOT BE DOUBTED, BUT THE ABSENC E OF DUE CARE, IN A CASE SUCH AS THE PRESENT DOES NOT MEAN THAT THE APPELLANT IS GUILTY OF EITHER FURNISHING INACCURATE PARTICULARS OR ATTE MPTING TO CONCEAL ITS INCOME. I AM OF THE CONSIDERED OPINION, GIVEN THE PECULIAR FACTS OF THIS CASE, THAT THE IMPOSITION OF PENALTY ON THE AP PELLANT IS NOT JUSTIFIED. I AM SATISFIED THAT THE APPELLANT, IN TH E PRESENT CASE, HAD COMMITTED AN INADVERTENT AND BONA FIDE ERROR AND HAD NOT INTENDED TO OR ATTEMPTED TO EITHER CONCEAL ITS INCO ME OR FURNISH INACCURATE PARTICULARS. I, THEREFORE, DIRECT THE AO TO DELETE THE PENALTY LEVIED ON ACCOUNT OF DISALLOWANCE OF EXCESS CLAIM OF DEPRECIATION. THE GROUNDS OF APPEAL, AS THEY RELATE TO PRESENT ISSUE, ARE THEREFORE, ALLOWED. 9. WE HAVE HEARD BOTH PARTIES AND GONE THROUGH THE CAS E FILE. WE MAKE IT CLEAR THAT THERE IS NO DISPUTE BETWEEN T HE PARTIES THAT IT IS I.T.A.NO. 2209/13 :- 6 -: ONLY ON THE BASIS OF THE DETAILS FURNISHED BY THE ASSESSEE THAT THE ASSESSING OFFICER HAD DISALLOWED THE CLAIM OF FULL DEPRECIATION ON THE GROUND THAT THE ASSETS IN QUESTION WERE PUT TO USE FOR A PERIOD OF LESS THAN 180 DAYS. EVEN THE REVENUE IS FAIR ENOUGH NOT TO CONTROVERT THIS FINDING OF FACT ARRIVED AT BY THE CIT(A). IN THESE CIRCUMSTANCES, WE OBSERVE THAT ONCE THE IMPUGNED DEPRECIATION HAS BEE N DETERMINED ON THE BASIS OF VERY PARTICULARS SUBMITTED BY THE ASS ESSEE, IT CAN HARDLY BE SAID TO HAVE EITHER CONCEALED OR FURNISHED INACC URATE PARTICULARS OF INCOME. SO FAR AS COMPUTATION PART IS CONCERNED, I N A RECENT DECISION PRICE WATERHOUSE COOPERS PVT. LTD. VS CIT [2012] 34 8 ITR 306(SC), THEIR LORDSHIPS HAVE HELD THAT IN CASE OF INADVERTE NT COMPUTATION ERRORS, PENALTY U/S 271(1)(C) OF THE ACT CANNOT B E LEVIED. SO, THE ORDER OF THE CIT(A) DELETING THE PENALTY IS AFFIRME D. 10. THE REVENUES APPEAL STANDS DISMISSED. ORDER PRONOUNCED ON FRIDAY, THE 31 ST OF JANUARY, 2014, AT CHENNAI. SD/- SD/- (A. MOHAN ALANKAMONY) ACCOUNTANT MEMBER (S. S. GODARA) JUDICIAL MEMBER DATED: 31 ST JANUARY, 2014 RD COPY TO: APPELLANT/RESPONDENT/CIT(A)/CIT/DR