JAWAHAR KALA KENDRA, Jaipur V. DCIT, Jaipur

ITA 821/JPR/2011

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 1555 (ITAT-JAIPUR)
• Duration Of Justice: 1 year(s) 4 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-01-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2005-2006
• Appeal Filed On: 23-09-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: D C SHARMA
• Keywords: Depreciation; Unabsorbed depreciation
• Section: 27

Judgement Text

IN THE INCOME TAX APPELALTE TRIBUNAL : JAIPUR BENCH JAIPUR BEFORE SHRI HARI OM MARATHA, JUDICIAL MEMBER AND SHRI N.K. SAINI, ACCOUNTANT MEMBER. ITA NO. 821/JP/2011 (A.Y. 2005-06) JAWAHAR KALA KENDRA, VS. DCIT, CIRCLE 5, JAWAHAR LAL NEHRU MARG, JAIPUR. JAIPUR. PAN NO. AAAJJ 0462 D (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI P.C. PARWAL & DEPARTMENT BY : SHRI D.C. SHARMA -D.R. DATE OF HEARING : 22/01/2014. DATE OF PRONOUNCEMENT : 23/01/2014. O R D E R PER N.K.SAINI, A.M THIS IS AN APPEAL BY THE ASSESSEE AGAINST THE ORDE R DATED 20/07/2011 OF CIT(A)-II, JAIPUR. THE FOLLOWING GRO UNDS HAVE BEEN RAISED IN THIS APPEAL: 1. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS ) HAS ERRED IN LAW IN CONFIRMING THE LEVY OF PENALTY U/S 271 (1)(C ) AT RS. 54,53,240/- IN RESPECT OF REDUCTION IN CLAIM OF DEP RECIATION BY RS. 1,62,00,951/-. 2 2. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN FACTS AND IN LAW IN HOLDING THAT ASSESSEE MADE A FA LSE CLAIM OF DEPRECIATION IN CONFIRMING LEVY OF PENALTY. HE HAS FURTHER IGNORED THE FACT THAT ASSESSEE SOCIETY IS CONSTITUT ED BY GOVERNMENT OF RAJASTHAN AS AUTONOMOUS BODY AND THER EFORE CHARGE OF FALSITY OUGHT NOT TO BE HAVE LEVIED LIGHT HEARTEDLY. 3. THE APPELLANT CRAVES TO ALTER, AMEND AND MODIFY ANY GROUND OF APPEAL. 4. NECESSARY COST BE AWARDED TO THE ASSESSEE. 2 THE ONLY GRIEVANCE OF THE ASSESSEE IN THIS APPEAL RELATES TO THE CONFIRMATION OF PENALTY LEVIED BY THE AO UNDER SECT ION 271(1)(C) OF THE I.T. ACT, 1961 (HEREINAFTER REFERRED TO AS ACT , IN SHORT) AMOUNTING TO RS. 54,53,240/-. 3. FACTS OF THE CASE IN BRIEF ARE THAT THE ASSESSEE-S OCIETY CONSTITUTED BY THE GOVERNMENT OF RAJASTHAN AS AUTON OMOUS BODY TO PRESERVE THE CULTURE OF RAJASTHAN, FILED ITS RETURN OF INCOME ON 30/10/2005 DECLARING NIL INCOME, WHICH WAS PROCESSE D UNDER SECTION 143(1) OF THE ACT ON 14/03/2007. LATER ON, CASE WAS SELECTED FOR SCRUTINY. THE AO NOTICED THAT THE ASS ESSEE HAD SHOWN EXCESS INCOME OVER EXPENDITURE AT RS. 32,03,381/- AN D CLAIMED DEPRECIATION OF RS. 1,90,31,646/- AND AFTER SETTING OF THE SAME, AGAINST INCOME SHOWN, CARRIED FORWARD DEPRECIATION OF RS. 1,58,28,265/- AS UNABSORBED DEPRECIATION. THE AO W AS OF THE VIEW THAT THE DEPRECIATION WAS ALLOWABLE AT RS. 2,51,786 /- AS AGAINST 3 DEPRECIATION OF RS. 1,90,31,645/- CLAIMED IN THE RET URN. ACCORDINGLY, THE INCOME WAS ASSESSED AT RS. 29,51,59 5/-. THE AO ALSO INITIATED PENALTY PROCEEDINGS UNDER SECTION 27 1(1)(C) OF THE ACT ON THE GROUND THAT THE ASSESSEE FURNISHED THE INACC URATE PARTICULARS OF INCOME TO THE EXTENT OF RS. 1,62,00,951/- BEING EXCESS DEPRECIATION CLAIMED IN THE RETURN OF INCOME. HE L EVIED THE PENALTY OF RS. 54,53,240/- U/S 271(1)(C) OF THE ACT. 4. BEING AGGRIEVED, THE ASSESSEE CARRIED THE MATTER T O THE LD. CIT(A ), WHO ALSO SUSTAINED THE PENALTY LEVIED BY T HE AO. NOW THE ASSESSEE IS IN APPEAL. 5. LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT TH E ASSESSEE NEITHER FURNISHED INACCURATE PARTICULARS OF INCOME NOR CONCEALED THE INCOME AND MERELY ON THIS BASIS THAT THE DEPRECIATI ON CLAIMED WAS NOT ALLOWED IN FULL, THE PENALTY UNDER SECTION 271( 1)(C) OF THE ACT WAS NOT LEVIABLE. RELIANCE WAS PLACED ON THE JUDGME NT OF HONBLE SUPREME COURT IN THE CASE OF PRICE WATERHOUSE COOPERS PVT. LTD. VS. CIT AND ANOTHER [2012] 348 ITR 306 AND CIT VS. RELIANCE PETROPRODUCTS PVT. LTD. (2012) 322 ITR 158. 6 . IN HIS RIVAL SUBMISSIONS, LD. D.R. STRONGLY SUPPOR TED THE ORDERS OF THE AUTHORITIES BELOW AND FURTHER SUBMITTED THAT THE ASSESSEE BY 4 CLAIMING WRONG DEPRECIATION NOT ONLY CONCEALED THE INCOME, BUT ALSO FURNISHED INACCURATE PARTICULARS OF INCOME, THEREFO RE, PENALTY UNDER SECTION 271(1)(C) OF THE ACT WAS RIGHTLY LEVIED BY THE AO AND CONFORMED BY THE LD. CIT(A). 7 . WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE PA RTIES AND CAREFULLY GONE THROUGH THE MATERIAL ON THE RECORD. IN THE PRESENT CASE, IT IS AN ADMITTED FACT THAT THE CLAIM OF THE ASSESSEE FOR DEPRECIATION AT RS. 1,90,31,645/- WAS RESTRICTED TO RS. 2,51,786/-. THEREFORE, MERELY ON THIS BASIS THAT THE DEPRECIATI ON CLAIMED BY THE ASSESSEE WAS NOT ALLOWABLE IN FULL IT CANNOT BE SAI D THAT THE ASSESSEE CONCEALED THE INCOME OR FURNISHED INACCURATE PARTIC ULARS OF INCOME PARTICULARLY WHEN ALL THE DETAILS RELATING TO ACQUI RING ALL THE ASSETS AND THE RATE OF DEPRECIATION WERE FURNISHED TO THE AO. 8 . ON THE SIMILAR ISSUE, THE HONBLE SUPREME COURT I N THE CASE OF CIT VS. RELIANCE PETROPRODUCTS PVT. LTD. [2012[ 322 ITR 158 HAS HELD AS UNDER:- WHERE THERE IS NO FINDING THAT ANY DETAILS SUPPLI ED BY THE ASSESSEE IN ITS RETURN ARE FOUND TO BE INCORREC T OR ERRONEOUS OR FALSE THERE IS NO QUESTION OF INVITING THE PENAL TY UNDER SECTION 271(1)(C). A MERE MAKING OF A CLAIM, WHICH IS NOT SUSTAINABLE IN LAW, BY ITSELF, WILL NOT AMOUNT TO FURNISHING INACC URATE PARTICULARS REGARDING THE INCOME OF THE ASSESSEE. SUCH A CLAIM 5 MADE IN THE RETURN CANNOT AMOUNT TO FURNISHING INAC CURATE PARTICULARS. 9. SIMILARLY, THE HONBLE SUPREME COURT IN THE CASE O F PRICE WATERHOUSE COOPERS PVT. LTD. VS. CIT AND ANOTHER (SUPRA) HELD AS UNDER:- THAT THE FACTS OF THE CASE WERE PECULIAR AND SOMEW HAT UNIQUE. NOTWITHSTANDING THAT THE ASSESSEE WAS A REPUTED FIR M AND HAD GREAT EXPERTISE AVAILABLE WITH IT, IT WAS POSSIBLE THAT EVEN THE ASSESSEE COULD MAKE A SILLY MISTAKE. THE FACT TH AT THE TAX AUDIT REPORT WAS FILED ALONG WITH THE RETURN AND TH AT IS UNEQUIVOCALLY STATED THAT THE PROVISION FOR PAYMENT WAS NOT ALLOWABLE UNDER SECTION 40A(7) OF THE ACT INDICATED THAT THE ASSESSEE MADE A COMPUTATION ERROR IN ITS RETURN OF INCOME. THE CONTENTS OF THE TAX AUDIT REPORT SUGGESTED THAT THE RE WAS NO QUESTION OF THE ASSESSEE CONCEALING ITS INCOME OR O F THE ASSESSEE FURNISHING ANY INACCURATE PARTICULARS. AP ART FROM THE FACT THAT THE ASSESSEE DID NOT NOTICE THE ERROR, IT WAS NOT EVEN NOTICED EVEN BY THE ASSESSING OFFICER WHO FRAMED TH E ASSESSMENT ORDER. ALL THAT HAD HAPPENED WAS THAT T HROUGH A BONA FIDE AND INADVERTENT ERROR, THE ASSESSEE WHILE SUBMITTING ITS RETURN, FAILED TO ADD THE PROVISION FOR GRATUIT Y TO ITS TOTAL INCOME. THE ASSESSEE SHOULD HAVE BEEN CAREFUL BUT THE ABSENCE OF DUE CARE, IN A CASE SUCH AS THE PRESENT, DID NOT MEAN THAT THE ASSESSEE WAS GUILTY OF EITHER FURNISHING INACCURATE PARTICULARS OR ATTEMPTING TO CONCEAL ITS INCOME. ON THE PECULIAR FACTS OF THIS CASE, THE IMPOSITION OF PENALTY ON THE ASSESSEE WAS NOT JUSTIFIED. 10. IN THE PRESENT CASE ALSO, THE ASSESSEE FURNISHED AL L THE DETAILS RELATING TO THE ASSETS AND CLAIM OF THE DEPRECIATIO N AND MERELY ON THIS BASIS THAT AN INCORRECT CLAIM OF DEPRECIATION WAS THERE BY THE 6 ASSESSEE, IT CANNOT BE SAID THAT IT WAS A CASE OF F URNISHING OF INACCURATE PARTICULARS OR CONCEALMENT OF INCOME. T HEREFORE, BY KEEPING IN VIEW THE RATIO LAID DOWN IN THE AFORESAI D REFERRED TO CASES, WE ARE OF THE VIEW THAT IT IS NOT A FIT CASE FOR LEVYING THE PENALTY UNDER SECTION 271(1)(C) OF THE ACT. ACCORD INGLY, THE IMPUGNED PENALTY LEVIED BY THE AO AND SUSTAINED BY THE LD. CIT(A), IS DELETED. 11 . IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED. (ORDER PRONOUNCED IN THE COURT ON 23 RD JANUARY, 2014). SD/- SD/- (HARI OM MARATHA) (N.K.SAINI) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 23 RD JANUARY, 2014. VR/- COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE LD.CIT 4. THE CIT(A) 5. THE D.R BY ORDER ASSISTANT REGISTRAR, ITAT, JAIPUR.