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TMI Blog2015 (5) TMI 514X X X X Extracts X X X X X X X X Extracts X X X X ..... zed a sum of Rs. 20.18 crores under the head fixed assets for Amritsar Airport during the year under appeal and claimed depreciation thereon. The Assessing Officer noticed that the Comptroller & Auditor General C&AG has made an observation that completion certificate in respect of above amount was not produced. The AO asked the assessee to justify the claim of the depreciation on fixed assets. The assessee vides its letter dated 25.10.2010 filed the details of said amount capitalized by it during the year. The Assessing Officer found that the work of fixed assets of Rs. 14.62 only was completed during the previous year and therefore, the assessee could have claimed depreciation on that amount only. The AO was of the view that the assessee made wrong claim of the depreciation in respect of fixed assets of Rs. 5.56 crores and he disallowed the depreciation of Rs. 1.5 crores. In the appeal preferred by the assessee, the CIT(A) vide his appeal order dated 10.01.2012 had given a finding that the assessee had actual claimed depreciation of Rs. 1.5 crores in respect of the assets of Rs. 5.56 crores and he directed the AO to verify the actual depreciation claimed by the assessee in respect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bona fide act of the assessee. Ld. counsel also contended that on verification, the assessee company found that out of amount of Rs. 20.18 crores, the claim of depreciation on assets of Rs. 14.62 crores was correct as these works were completed in the Financial year 2007-08 pertain to AY 2008-09. The Ld. counsel also pointed out that agreeing with the view and observation of C&AG, the assessee company reversed its claim in the return for AY 2009-10 filed on 29.09.2009 voluntarily suo moto . 6. The Ld. counsel strenuously contended that AO, first time raised the issue of C&AG report by issuing notice and questionnaire about claim of depreciation on 09.08.2010 on the basis of discloser made by the assessee in the return for AY 2009- 10, which was filed on 29.09.2009. Ld. counsel further made it is clear that the assessee revised its claim of depreciation suo moto voluntarily and the CIT(A) was not correct in agreeing with the view of the AO that the reversal of claim was not a bona fide mistake and the assessee has made a wrong claim of depreciation and furnished inaccurate particulars of its income to the extent of Rs. 1.5 crores. 7. Ld. counsel vehemently contended that while con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sel for the assessee that the assessee revised and reversed its claim in the return of subsequent year as per comments and observation of C&AG made in the 30th Annual Report 2007 voluntarily and suo moto are found to be acceptable . 10. Ld. counsel of the assessee further placing reliance of decisions of High Court of Madhya Pradesh in the case of DCIT Vs. Electrical Cooperative Society Ltd. reported in 279 ITR 319 (MP) submitted that every concealment does not attracted the penalty u/s 271(1)(c) of the Act and it must be a deliberate and intentional being in the knowledge of the assessee so as to evade payment of income tax. The Ld. counsel further pointed out that the assessee being a nonprofit organization managed and controlled by the Government of India for providing services in the field of Civil Aviation in India then it cannot be held that at deliberate intention to evade to payment of due tax. 11. Ld. counsel of the assessee also placed reliance on the plethora of judgment including the decision of Hon'ble jurisdictional High Court of Delhi in the case of CIT Vs. MTNL in ITA No. 626/2011 delivered on 10.10.2011, the decision of the Hon'ble Supreme Court in the case of CI ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... income filed for AY 2009-10 on 30.09.2009. It is also clear that the Assessing Officer noted this fact that the assessee itself accepts that the fixed assets amounting to Rs. 5.56 crores were reversed in the subsequent financial year, therefore, depreciation of above assets is not admissible during the year. In this situation, the assessee being a public sector undertaking, Government of India would not furnish inaccurate particulars of its income with the conscious intention to conceal its income with the view to evade payment of proper taxes due to the Government of India. 13. As this juncture, we respectfully take cognizance of observation of the Hon'ble Supreme Court in the case of Reliance Petro Products Pvt. Ltd. (Supra) wherein it was held that u/s 271(1)(c) of the Act penalty cannot be imposed even for making unsustainable claim. The Hon'ble Apex Court has also considered and referred the ratio of its judgment in the case of Dharmendra Textile Processors (Supra). The relevant part of this order reads as under:- "(i) S. 271 (1) (c) applies where the assessee "has concealed the particulars of his income or furnished inaccurate particulars of such income". The present was no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r there was some confusion as regards the extent of percentage to be deducted from the different class of customers. No sooner it was clarified, the Board made compliance from their own funds. In a case of this nature, the law laid down by the Supreme Court in the case of Hindustan Steel Ltd. v. State of Orissa [1972J 83 ITR 26 (SC); [1970J 25 STC 211 (SC), when their Lordships held: "Penalty will not also be imposed merely because it is lawful to do so. Whether penalty should be imposed for failure to perform a statutory obligation is a matter of discretion of the authority to be exercised judicially and on a consideration of all the relevant circumstances. Even if a minimum penalty is prescribed, the authority competent to impose the penalty will be justified in refusing to impose penalty when there is a technical or venial breach of the provisions of the Act or where the breach flows from a bona fide belief that the offender is not liable to act in the manner prescribed by statute. " In our opinion, the aforesaid principle of law squarely apply to the facts of this case, if we examine the explanation offered by the Board/assessee for not depositing/deducting the tax deducted a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of depreciation on 09.08.2010 when the AO noticed that the assessee itself accepted that the depreciation claimed on fixed assets amounting to Rs. 5.56 crores is overstated and the same was reversed in the return of income of the subsequent financial year. We have already observed that this fact has been mentioned by the AO in the first para 8 at page 4 of the penalty order which is self speaking and has not been disputed by the Ld. DR. 17. Under above noted facts and circumstances of the case, we are inclined to hold that when the assessee itself reversed its overstated claim of depreciation in the subsequent return, when the mistake of over statement of claim of depreciation was pointed out by the C&AG report, voluntarily and the Assessing Officer raised query subsequent to voluntarily reversed of the said claim then act of conscious and malafidely furnishing of inaccurate particulars of income or concealment of particulars of income cannot be attributed to the assessee public sector undertaking. Therefore, in view of foregoing discussions, we hold that the explanation offered by the assessee was sustainable and bona fide and therefore, penalty u/s 271(1)(c) of the Act is not im ..... X X X X Extracts X X X X X X X X Extracts X X X X
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