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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 ..... CA For the Respondent : Ms. Y Kakkar, DR And Shri V. Chaurasia, CA ORDER Per Shri C. M. Garg, JM: 1. This appeal has been preferred by the assessee against the order of the Commissioner of Income Tax (Appeals)-IV, New Delhi dated 11.04.2013 in Appeal No.214/2012-13 for the AY 2008-09 by which the penalty order dated 31.01.2013 passed u/s 271(1)(c) of the Act has been confirmed, upholding the penalty of ₹ 50,98,500/-. 2. Although the assessee has raised as many as seven grounds in this appeal, but except Ground No.1 other grounds are argumentative and supportive to the main Ground No.1, which reads as under:- 1. On the facts and circumstances of the case, the order passed by the learned CIT(A) confirming the penalty under section 271(1)(c) is bad both in the eye of law and on facts. 3. Briefly stated the facts giving rise to this appeal are that the assessee had capitalized a sum of ₹ 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 respec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the claim of depreciation amounting to ₹ 2.48 crores but the CIT(A) directed the AO to restrict the disallowance to ₹ 1.5 crores, which attained finality as the assessee did not prefer any appeal against the said disallowance. Ld. counsel of the assessee further contended that the AO imposed impugned penalty ignoring the fact that neither there was a mala fide concealment of income nor assessee furnished inaccurate particulars of its income, because the assessee being a public sector undertaking is subject to C AG audit and the report of the C AG was the basis of the disallowance of the claim of depreciation which was also part of annual report. Ld. counsel further pointed out that the assessee filed its return of income for AY 2008- 09 on 30.09.2008 and subsequently the C AG made certain observation about the claim of depreciation on assets capitalized vide its report dated 27.10.2008 i.e. after assessee had filed the return of income showing the bona fide act of the assessee. Ld. counsel also contended that on verification, the assessee company found that out of amount of ₹ 20.18 crores, the claim of depreciation on assets of ₹ 14.62 crores was correct as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... basis of C AG report and reversion of the claim by the assessee in its return of income for AY 2009-10. In this situation, we are declined to accept this contention of the Revenue that the assessee revised its claim only after when the AO raised query about the claim of depreciation. While in the penalty order, AO himself noted that the query was raised by the AO vide letter dated 09.08.2010 then this fact is clear that the assessee filed its return of income for AY 2008-09 on 30.09.2008, the C AG pointed out statement of depreciation vide 30th Annual Report dated 27.10.2008 and the assessee reversed its claim of depreciation as per direction of the C AG in its return for AY 2009-10 filed on 29.09.2009. We clearly note that the Assessing Officer picked up this issue on the basis of reversal of claim submitted by the assessee in the return of income for the subsequent year which was undisputedly filed on 29.09.2009. 9. Under above note facts and circumstances of the case, contention of the Ld. counsel 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 volunt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in it was held that penalty under the fiscal statue is for breach of civil liability and willful concealment is not an essential ingridment for attracting the civil liability. Ld. DR has also drawn our attention towards this fact that when the assessee did not had completion certificate in respect of in completed assets amounting to ₹ 5.56 crores then the claim of depreciation on entire amount of ₹ 20.18 crores is enact of furnishing of inaccurate particulars and also an act of concealing the true particulars of income of the assessee, therefore, penalty levied by the AO was correctly confirmed and upheld by the CIT(A). 12. In view of above rival contention, we note that since by the earlier part of this order we have already held that the assessee reversed its claim of depreciation when the C AG report pointed out over statement of claim of depreciation in the 30th Annual Report dated 27.10.2008 and the assessee voluntary and suo moto reversed and revised its claim of depreciation in its return of 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... law because what was overruled in Dharmendra Textile Processors306 ITR 277 (SC) was only that part in Dilip Shroff where it was held that mens rea was an essential requirement for penalty u/s 271 (1)(c). 14. On this issue, we further respectfully take cognizance of observation and conclusion of Hon ble Madhya Pradesh High Court in the case of CIT Vs. Senior Accounts Officer (Supra) wherein it was held that if the explanation offered by the assessee was bona fide and deserves to be accepted, then it would not a case of deliberate concealment with the view to evade payment of tax and putting in Revenue to loss. In this judgment their lordship speaking for Hon ble High Court of Madhya Pradesh observed as follows:- In our opinion, the Tribunal rightly accepted the explanation offered by the Board/assessee. It was not a case of deliberate attempt on the part of the assessee to avoid payment by way of deduction for being deposited. The assessee is not a private businessman but it is a Government statutory organization. Moreover 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... explanation which is found by the [Assessing] Officer or the [Commissioner (Appeals)] [or the [ Principal Commissioner or] Commissioner] to be false, or (B) such person offers an explanation which he is not able to substantiate [and fails to prove that such explanation is bona fide and that all the facts relating to the same and material to the computation of his total income have been disclosed by him], Then, the amount added or disallowed in computing the total income of such person as a result thereof shall, for the purposes of clause (c) of this sub-section, be deemed to represent the income in respect of which particulars have been concealed. 16. Turning to the facts of the present case, as we have already note and observed that the assessee being a public sector undertaking of Government of India, reversed its claim in the subsequent return of income for AY 2009-10 on receipt of C AG report dated 27.10.2008. The assessee reversed its claim of depreciation on 29.09.2009. The AO at the very first time raised query about the claim of depreciation on 09.08.2010 when the AO noticed that the assessee itself accepted that the depreciation claimed on fixed assets amounting ..... X X X X Extracts X X X X X X X X Extracts X X X X
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