2012 (8) TMI 1106 - HC - Income Tax

Summary

Issues involved: Tax appeal challenging the deletion of penalty u/s 271(1)(c) of the Income Tax Act for claiming excessive depreciation on plant & machinery, electrical installations, and hotel building.

Facts and Decision:
1. The assessee filed a return showing a loss, which was accepted. Scrutiny revealed excess depreciation claimed on electric installations, leading to penalty proceedings u/s 271(1)(c).
2. The Assessing Officer disallowed excess depreciation on electric installations and hotel building, initiating penalty proceedings.
3. The CIT(A) accepted the assessee's explanation regarding electrical fittings, reducing the disallowance amount.
4. Penalty of &8377; 11,73,470/- was imposed for excessive depreciation claims on plant & machinery and hotel building.
5. The CIT(A) found no intention to furnish incorrect information, as the assessee rectified the mistake regarding hotel building depreciation.
6. The Tribunal upheld the CIT(A)'s decision, citing precedents and lack of mens rea for penalty imposition.
7. The High Court dismissed the appeal, concluding that the issue was settled by the Tribunal's findings, and no substantial question of law was raised.

Conclusion: The penalty u/s 271(1)(c) was deleted based on the lack of intention to provide incorrect information and the rectification of the mistake by the assessee, as upheld by the Tribunal and the High Court.