2022 (12) TMI 1271 - AT - Income Tax

Penalty u/s. 271(1)(c) - disallowance of depreciation on land, disallowance u/s. 14A r.w.r 8D and addition on account of income from house property shown under the head income from other sources - HELD THAT - The issue in the present appeal is with respect to levy of penalty u/s. 271(1)(c) - We find that identical issue of levy of penalty was before the coordinate bench of Tribunal for A.Y. 2015-16 in assessee s own case 2022 (10) TMI 1137 - ITAT DELHI - no penalty u/s. 271(1)(c) of the Act, is leviable in the present case. Thus the ground of assessee is allowed.

Summary

Issues:
Levy of penalty under section 271(1)(c) of the Income Tax Act, 1961.

Detailed Analysis:

1. Background and Additions Made:
The case involved an appeal by the Assessee against the Order of the Ld. CIT(A)-1, New Delhi, for the A.Y. 2011-2012. The Assessee, a company working as Indenting Agents & Exporters, filed its return of income declaring Rs. 12,21,87,140. The assessment under section 143(3) of the I.T. Act, 1961 resulted in additions including disallowance of depreciation on land, disallowance under section 14A r.w.r 8D, and addition on account of income from house property shown under the head income from other sources.

2. Appeal and Penalty Imposition:
The Assessee appealed before the Ld. CIT(A) against the additions made. The Ld. CIT(A) granted partial relief to the Assessee, but the Assessing Officer levied a penalty under section 271(1)(c) of Rs. 6,31,000. The Assessee then appealed against the penalty order.

3. Tribunal's Decision and Legal Precedent:
The Tribunal considered the issue of penalty levied under section 271(1)(c) of the Act. It noted that in a previous case for A.Y. 2015-16 involving similar facts, the penalty was deleted by the Tribunal. The Tribunal observed that denial of the claim by the Assessee does not automatically lead to the levy of penalty. Referring to the decision in the case of CIT vs. Reliance Petro Products (P.) Ltd., the Tribunal held that correction of a wrong claim by the Assessee does not warrant the imposition of a penalty. Therefore, the Tribunal set aside the penalty in the present case based on the legal precedent and the principle that the correct computation of depreciation is the duty of the Assessing Officer.

4. Tribunal's Ruling and Conclusion:
The Tribunal found no distinguishing facts between the present case and the previous case for A.Y. 2015-16. As the Revenue failed to provide any material demonstrating that the previous order had been set aside or overruled, the Tribunal, following the precedent, held that no penalty under section 271(1)(c) was leviable in the present case. Consequently, the Tribunal allowed the Assessee's appeal, thereby deleting the penalty imposed by the Assessing Officer.

In conclusion, the Tribunal's decision in this judgment emphasized the importance of legal precedents and the correct application of tax laws in determining the imposition of penalties under section 271(1)(c) of the Income Tax Act, 1961.