SAIPHIA TECHNOLOGY PRIVATE LIMITED,BHOPAL V. COMMISSIONER OF INCOME-TAX (APPEALS) , NATIONAL FACELESS APPEAL CENTRE (NFAC) DELHI

ITA 172/IND/2024

AI Insights

The case involves Saiphia Technology Private Limited, which appealed against the penalty imposed by the Assessing Officer (AO) under section 271(1)(c) of the Income-tax Act, 1961, for the Assessment Year 2015-16. The penalty was initially imposed following a revision-order that led to a fresh assessment, resulting in disallowances of certain claims made by the assessee. The Tribunal examined two main items of penalty: the disallowance of an additional depreciation claim and the disallowance of an income-tax expenditure claim. The Tribunal found the imposition of penalty for the additional depreciation claim unjustified, citing consistency in the treatment of similar claims in previous assessments, while it upheld the penalty for the income-tax expenditure claim as it was statutorily not allowable.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 34623 (ITAT-INDORE)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-01-2025
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Assessment Year: 2015-2016
• Other Referred Cases: N.G. Technologies Vs. CIT, Hamirpur District Co-operative Bank Ltd. Vs. CIT
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: FORREVENUE; THOUGHDUTIFULLYSUPPORTEDTHEORDEROFAO; YET; FORREVENUERELIEDUPONN.G.TECHNOLOGIESVS; SHRIASHISHPORWAL
• Assessee Lawyers: SHRIGAGANTIWARI; WAYOFDEBIT
• Keywords: Revised return; Depreciation; Additional depreciation; Wrong claim
• Section: 143(3); 271(1)(c); 113; 32(1)(iia)

Judgement Text

"Page 1 of 5 आयकरअपीलीयअिधकरण, इंदौरɊायपीठ, इंदौर IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH, INDORE BEFORE SHRI B.M. BIYANI, ACCOUNTANT MEMBER AND SHRI UDAYAN DAS GUPTA, JUDICIAL MEMBER ITA No.172/Ind/2024 Assessment Year:2015-16 Saiphia Technology Private Limited, 1st Floor Ankit Plaza, Kolar Road, Near Nayapura Bus Stop, Bhopal बनाम/ Vs. NFAC Delhi (Assessee/Appellant) (Revenue/Respondent) PAN: AANCS1814Q Assessee by Shri Gagan Tiwari, AR Revenue by Shri Ashish Porwal, Sr. DR Date of Hearing 20.01.2025 Date of Pronouncement 22.01.2025 आदेश/ O R D E R Per B.M. Biyani, A.M.: Feeling aggrieved by order of first appeal dated 23.01.2024 passed by learned Commissioner of Income-Tax (Appeals)-NFAC, Delhi [“CIT(A)”] which in turn arises out of penalty-order dated 21.01.2022 passed by learned NFAC, Delhi [“AO”] u/s 271(1)(c) of Income-tax Act, 1961 [“the Act”] for Assessment-Year [“AY”] 2015-16, the assessee has filed this appeal on the grounds as mentioned in Form No. 36. Saiphia Tecnology Pvt. Ltd. ITA No. 172/Ind/2024 – AY 2015-16 Page 2 of 5 2. The background facts leading to present appeal are such that the assessee-company filed return of income declaring a total income of (-) Rs. 63,17,896/-. The case was selected for scrutiny and the AO ultimately completed assessment u/s 143(3) vide order dated 29.12.2017 accepting the returned income. Thereafter, the PCIT-2, Bhopal passed revision-order dated 27.11.2019 directing the AO to make a fresh assessment for certain issues. In pursuance of such revision-order, the AO passed fresh assessment-order u/s 143 r.w.s. 263 after making three additions/disallowances, viz. (i) disallowance of Rs. 32,31,505/- out of depreciation claim, (ii) disallowance of Rs. 6,00,000/- on account of income-tax, and (iii) disallowance of Rs. 2,28,966/- out of various expenses. Accordingly, the AO determined total income at (-) Rs. 22,57,425/-. The AO also initiated penalty proceedings u/s 271(1)(c) for first two items of additions, namely (i) disallowance of Rs. 32,31,505/- out of depreciation claim, and (ii) disallowance of Rs. 6,00,000/- on account of income-tax, treating them as furnishing of inaccurate particulars of income by assessee. Ultimately, the AO passed penalty-order dated 21.01.2022 u/s 271(1)(c) imposing a penalty of Rs. 12,00,000/-. Aggrieved by penalty-order, the assessee filed first-appeal before CIT(A) but did not get any success. Now, the assessee has come in next appeal before us. Saiphia Tecnology Pvt. Ltd. ITA No. 172/Ind/2024 – AY 2015-16 Page 3 of 5 3. In so far as the first item of penalty is concerned, Ld. AR made a straightforward submission that the impugned disallowance of Rs. 32,31,505/- is the outcome of non-acceptance of claim of additional depreciation made by assessee in terms of section 32(1)(iia) before PCIT in revision-proceeding and also before AO in the proceeding of fresh assessment. Ld. AR submitted that identical claim was also made by assessee in immediately preceding AY 2014-15 before Jurisdictional AO [DCIT-5(1), Bhopal – “JAO”] which the JAO allowed vide assessment-order dated 31.12.2019 passed u/s 143(3) r.w.s. 263. However, identical claim of additional depreciation has not been allowed by present AO (who is faceless) for AY 2015-16 as involved in present case. Ld. AR submitted that when the assessing authority has allowed the claim of additional depreciation in preceding AY 2014-15, the identical claim even if not allowed in current AY 2015-16, cannot be said to be a case of “furnishing of inaccurate particulars”. We have no hesitation in agreeing with this submission of Ld. AR. The Ld. DR for revenue, though dutifully supported the order of AO, yet could not rebut the pleading of Ld. AR. Being so, we hold that the AO is not justified to impose penalty qua the first item. 4. In so far as the second item of penalty is concerned, the assessee has claimed deduction of income-tax expenditure of Rs. 6,00,000/- which is Saiphia Tecnology Pvt. Ltd. ITA No. 172/Ind/2024 – AY 2015-16 Page 4 of 5 clearly disallowable in terms of section 40(a)(ii) of the Act. Ld. AR only submitted that it was inadvertently claimed by assessee by way of debit entry in P&L A/c without having any intention to furnish inaccurate particulars. Ld. DR for revenue relied upon N.G. Technologies Vs. CIT (2016) 70 taxmann.com 37 (SC) wherein it was held that if the assessee has made a claim which is contrary to basic principle of accountancy and subsequently filed revised return only after AO confronted assessee, penalty was leviable. Another case relied by Ld. DR is Hamirpur District Co- operative Bank Ltd. Vs. CIT (2020) 113 taxmann.com 447 (SC) wherein it was held that if the assessee has wrongly debited certain amount in P&L A/c which was not an expense but an appropriation of profit, penalty was leviable. Ld. DR contended that in present case, the assessee made a claim which was statutorily not allowable and had the tax authorities not discovered assessee’s wrong claim, the assessee would have taken benefit against law. Therefore, the disallowance made by AO certainly attracts section 271(1)(c). After a careful consideration, we find a strong merit in Ld. DR’s submission. Undisputably, the assessee has made a claim of deduction in the return of income which is disallowed by law. The defense taken by assessee that it was so claimed due to inadvertence cannot help the assessee. In the light of decisions quoted by Ld. DR, we agree that the Saiphia Tecnology Pvt. Ltd. ITA No. 172/Ind/2024 – AY 2015-16 Page 5 of 5 penalty is sustainable. Accordingly, we uphold penalty qua the second item. 5. Resultantly, this appeal is partly allowed. Order pronounced in open court on 22/01/2025 Sd/- Sd/- (UDAYAN DAS GUPTA) (B.M. BIYANI) JUDICIAL MEMBER ACCOUNTANT MEMBER Indore िदनांक/Dated : 22/01/2025 Patel/Sr. PS Copies to: (1) The appellant (2) The respondent (3) CIT (4) CIT(A) (5) Departmental Representative (6) Guard File By order UE COPY Assistant Registrar Income Tax Appellate Tribunal Indore Bench, Indore "