2019 (5) TMI 1005 - HC - Income Tax

Levy of penalty u/s 271 (1) (c) - depreciation on hospital building - CIT (Appeals) allowed the appeal holding that the assessee had not furnished any material particulars of the income which could be said to be inaccurate confirmed by ITAT - HELD THAT - Assessee s claim of depreciation at 10% is under the bonafide belief that as the residential quarters were utilized for the hospital purpose and formed part and parcel of hospital premises, the same would be eligible depreciation as hospital building. The assessee has huge loss and therefore there cannot be malafide intention to make such excess claim to evade tax. Besides the assessee had not furnished any material particulars of income which could be said to be inaccurate. It is well settled principle that a mere making of a bonafide claim would not amount to furnishing of inaccurate particulars of income. It is clear that the two authorities viz., CIT (Appeals) and the Tribunal have recorded findings of fact for setting aside the penalty under Section 271 (1) (c) . Hence no substantial question of law arises for consideration. Therefore, the appeal is dismissed.

Summary

Issues:
- Appeal under Section 260A of the Income Tax Act challenging an order of the Income Tax Appellate Tribunal dismissing an appeal filed by the Revenue against penalty.
- Interpretation of Section 271(1)(c) of the Income Tax Act regarding the levy of penalty for furnishing inaccurate particulars of income.
- Review of findings by CIT (Appeals) and the Tribunal regarding the absence of concealment of income or filing inaccurate particulars by the assessee.

Analysis:

The judgment pertains to an appeal under Section 260A of the Income Tax Act, 1961, where the Revenue challenged the dismissal of its appeal against a penalty by the Income Tax Appellate Tribunal. The issue revolved around the interpretation of Section 271(1)(c) of the Act concerning the levy of penalty for furnishing inaccurate particulars of income. The assessee had filed a statutory appeal against the penalty, and the CIT (Appeals) allowed it, emphasizing that the claim of depreciation made by the assessee was under a bonafide belief and that there was no malafide intention to evade tax. The CIT (Appeals) concluded that the assessee had not furnished any inaccurate particulars of income, as a mere bonafide claim does not amount to inaccurate particulars.

Subsequently, the Revenue appealed to the Tribunal, which upheld the decision of the CIT (Appeals), stating that the assessee neither concealed income nor provided inaccurate particulars. The Tribunal's dismissal of the appeal was based on the factual findings of the CIT (Appeals) and itself, indicating the absence of any concealment or inaccuracy in the particulars furnished by the assessee. Consequently, the High Court found no substantial question of law to consider, as the two authorities had already established the absence of grounds for the levy of the penalty under Section 271(1)(c) of the Income Tax Act. Therefore, the appeal was dismissed, with no costs awarded.