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TMI Blog2018 (6) TMI 421X X X X Extracts X X X X X X X X Extracts X X X X ..... has urged only the following identical reframed question of law in all three appeals for our consideration : - (i) Whether in the facts and circumstances of the case and in law, the Tribunal was justified in deleting the penalty levied under Section 271(1)(c) of the Act? 3. The respondent assessee had claimed depreciation in respect of the assets acquired / purchased from the lessee and given back on lease basis popularly called "sale and lease back". In quantum proceedings, the Tribunal by order dated 30th April, 2014 has held the respondent assessee entitled to claim depreciation on the assets used on sale and lease back basis. This by following the decision of the Supreme Court in ICDS Ltd. Vs. Commissioner of Income Tax, 350 ITR 52 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 271(1)(c) of the Act on the ground that the appeals in the quantum proceedings have been admitted by this Court. It is a settled position in law that mere rejection of a claim made by the assessee would not ipso facto result in penalty under Section 271(1)(c) of the Act. In fact, in Commissioner of Income Tax Vs. Reliance Petroproducts Pvt. Ltd. 2010 (11) SCC 762, the Apex Court observed that "Merely because the assessee's had claimed the expenditure, which claim was not accepted or not acceptable to the Revenue, that by itself would not in our opinion attract penalty under Section 271(1)(c)". Before penalty can be imposed under Section 271(1)(c) of the Act, the Revenue in terms thereof must be satisfied that the assessee had conceale ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ere has been concealment of particulars of income or furnishing inaccurate particulars of income that the occasion to explain the conduct in terms of ExplanationI to Section 271(1)(c) of the Act would arise. 8. In the facts of the present case, we are dealing with the assessments relating to Assessment Years 199596, 199697 and 199798. The position in law at that point of time was not clear. It is not a case of the Revenue that the respondent assessee has claimed depreciation in the face of a statutory provision or a binding decision of a Court, prohibiting the assessee from claiming depreciation in respect of the assets on sale and lease back basis. Till such time as the Apex Court rendered its decision in ICDS Ltd. (supra) in an Income Ta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case was unable to explain to the satisfaction of the Authorities as to the circumstances which led to the mistake in having made a claim for deduction, which was not added back while computing the income. It was in these circumstances, the penalty upon an assessee under Section 271(1)(c) of the Act was upheld. 10. The present facts are completely different. The claim made by the respondent assessee was bona fide and not in the face of a statutory provision or any binding decision. In fact, the issue raised herein stands covered in favour of the respondent assessee by the decision of the Apex Court in Reliance Petroproducts Pvt. Ltd. (supra) where it has been observed that making of incorrect claim in law would not by itself amount to conc ..... X X X X Extracts X X X X X X X X Extracts X X X X
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