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TMI Blog2013 (12) TMI 1043X X X X Extracts X X X X X X X X Extracts X X X X ..... ation on windmills at higher rate – Held that:- Following M/s. K.K.S.K. Leather Processors (P) Ltd [2009 (11) TMI 556 - ITAT MADRAS-D] - Even if option is not exercised within the stipulated time as per second proviso to rule 5(1A), the same cannot have a serious consequence of total denial of the claim of the assessee - When there is no prescribed procedure or mode of exercising option prescribed in the Rules, then the option exercised by the assessee by way of making a claim in the return of income along with the audit report is definitely more than the requirement of the second proviso - The requirement of second proviso to rule 5(1A) is satisfied if the option is exercised before the expiry of due date of filing of return of income unde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e, the failure to disclose the facts would provide immunity to the assessee from any notice being issued under section 148 after a period of four years. 5. The learned Commissioner of Income-tax (Appeals) erred in directing higher rate of depreciation on wind mills as per Rule 5(1A) of the Income-tax Rules 6. The learned Commissioner of Income-tax (Appeals) ought to have observed that mere filing of return within the due date specified u/s. 139(1) of the Act would not amount to exercising option for claiming depreciation at a higher rate. 7. The decision in the case of M/s. K.K.S.K. Leather Processors (P) Ltd., reported in 126 ITD 215 relied upon by the learned Commissioner of Income-tax (Appeals) has not been accepted by th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t assessment year as required under the proviso to section 147 of the Act. In these circumstances, the proceedings u/s 147 read with reference to notice u/s 148 dated 31.12.2011 was clearly invalid and deserves to be quashed. 7. The DR very fairly conceded before us that the Revenue has no case on these grounds of appeal. 8. In view of the above submission of the DR, we dismiss these grounds of appeal of the Revenue. 9. Ground Nos. 5 to 7 of the appeal are directed against the order of the CIT(A) in directing the Assessing Officer to allow higher rate of depreciation on windmills under Rule 5(1A) of the Income Tax Rules when the assessee had not exercised the option of higher rate of depreciation within the due dates specified u/s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (supra) has held as under: As per clause (i) of sub-section (1) of section 32, the depreciation on the assets of an undertaking engaged in generation or generation and distribution of power is at a percentage as prescribed as per rates on the actual cost thereof. Thus, clause (i) of sub-section (1) of section 32 provides the depreciation at a prescribed rate on the assets of specified undertaking on the actual cost instead of written down value. The Explanation 5 to sub-section (1) of section 32 makes it clear that the provisions of sub-section (1) of section 32 shall apply whether or not the assessee has claimed the deduction in respect of depreciation in computing his total income. From the provisions of sub-section (1) of section 32 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot override the provisions contained in the statute and the requirement of option under proviso to rule 5(1A) cannot be held in the nature that the failure of the same would be so fatal that the very object of the provision for providing higher rate of depreciation is defeated. When there is no specific form or method prescribed for exercising the said option, then the claim made in the return of income as well as reflected from the books of account and audit report filed along with return of income is more than the exercise of the option as required under second proviso to rule 5(1A). [Para 7] Therefore, even if option is not exercised within the stipulated time as per second proviso to rule 5(1A), the same cannot have a serious conse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the due date is nothing but before the due date as the same is not after the due date. Therefore, it can be said that the option exercised by the assessee on due date by way of making claims of depreciation in the return of income along with audit report and books of account wherein the assessee has adopted the rate as claimed is within time-limit prescribed under second proviso to rule 5(1A). The limit provided under the second proviso to rule 5(1A) is only to facilitate the Assessing Officer in discharging its obligations and duties as per the provisions of sub-section (1) of section 32. Therefore, the said requirement cannot be considered as mandatory. Moreover, the Assessing Officer cannot act on the option exercised before the return ..... X X X X Extracts X X X X X X X X Extracts X X X X
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