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TMI Blog2012 (12) TMI 600X X X X Extracts X X X X X X X X Extracts X X X X ..... posed to law, equity, weight of evidence, probabilities, facts and circumstances of the case. (ii) The learned CIT failed to appreciate that there was no error much less an error prejudicial to the interest of the revenue in the order of assessment passed by the learned Assessing Officer warranting revision under section 263 of the Act and consequently, the order passed by the CIT is opposed to law and facts of the appellant's case and requires to be cancelled. (iii) The learned CIT failed to appreciate that the initiation and levy of penalty under section 271(1)(c) of the Act is discretionary and that the learned Assessing Officer had exercised his discretion in not initiating the proceedings for levy of penalty under section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the notice under section 263 of the Act, the assessee submitted that the claim of 100% depreciation was on a bona fide belief without being aware of the amendment to Rule 5, new Appendix I, Part A, which had listed centering material as an item in the plant and machinery entitled to depreciation at the rate of 15%. It was submitted that the claim at 100% depreciation was made as in the preceding assessment years. It was submitted that the assessee had no intention to conceal any income nor to furnish any inaccurate particulars of income warranting imposition of penalty under section 271(1)(c) of the Act. It was further submitted that the assessment order passed under section 144 of the Act, the Assessing Officer had taken a conscious dec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ck to the Assessing Officer for redoing the assessment". 5. The assessee being aggrieved is in appeal before us. 6. The learned AR submitted that notice was issued under section 263 on the ground that the Assessing Officer had failed to initiate penalty proceedings under section 271(1)(c) of the Act and it was unwarranted on the part of the CIT to set aside the assessment for de nova consideration. It was contended that w.e.f. 1/6/2002, the CIT could have himself initiated penalty proceedings if he found on facts the penalty is imposable under section 271(1)(C) of the Act. Therefore, it was submitted that there was no necessity to have to set aside the assessment to the Assessing Officer for fresh consideration. Further it was contended t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . The Hon'ble Apex Court in the case of Malabar Industrial Co. Ltd. v CIT [2000] 243 ITR 83/109 Taxman 66 had laid down the parameters in which the order can be treated as erroneous and prejudicial to the interests of the revenue. 8.1 Section 271(1) of the Act can broadly be divided into two sets, each set containing three clauses - clauses (a), (b) and (c) on the one hand and clauses (i), (ii) and (iii) on the other hand. The first set of three clauses relates to three different types of defaults. Once it is found that an assessee has committed any one of the three defaults, the assessee becomes liable to penalty. It is at this stage that the second set of three clauses comes into play. Clauses (i), (ii) and (iii) prescribed the minimum o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aside to the Assessing Officer for re-doing fresh assessment. As stated earlier, w.e.f. 1/6/2002, the CIT is authorized to initiate and levy penalty under section 271(1) and therefore, there was no necessity to set aside the assessment for de novo consideration. 8.3 The assessee had contended that the penalty is not imposable on the facts of the case since the assessee had made a bona fide claim without any mala fide intention since 100% depreciation was allowable in respect of centering material purchased prior to the concerned assessment year. The claim of 100% depreciation was made in the concerned assessment year without noticing the amendment made. It is also further contended that since the Assessing Officer had initiated penalty und ..... X X X X Extracts X X X X X X X X Extracts X X X X
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