9911796707
TMI Blog2025 (1) TMI 558X X X X Extracts X X X X X X X X Extracts X X X X ..... enalty for a bona fide/ inadvertent/ human error . There is no intention on the part of the assessee to make an incorrect claim which is evidenced by assessee's subsequent actions and the fact that the assessee has not claimed depreciation in the subsequent years. Further the inadvertent error is voluntarily corrected by assessee by accepting the disallowance of depreciation before the CIT(A). AO is not correct in levying penalty u/s 271(1)(c) in assessee's case towards the disallowance of depreciation admitted by the assessee as inadvertently claimed. Decided in favour of assessee. - Shri Saktijit Dey, Vice President And Ms Padmavathy S, AM For the Appellant : Shri Bhupendra Shah, AR For the Revenue : Shri R.R. Makwana, Rs. DR OR ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wances made by the AO. Before the CIT(A) the assessee withdrew the ground raised pertaining to the disallowance of depreciation made by the AO. Subsequently the AO issued a notice under section 271(1)(c) stating that the assessee has furnished inaccurate particulars of income with regard to the claim of depreciation. The assessee submitted that the claim of depreciation that was disallowed by the AO in the order under section 143(3) was not contented by the assessee before the CIT(A) considering the amendment brought in by Finance Act 2 of 2014 by inserting sub section (6) to section 11 of the Act whereby depreciation in respect of an asset the acquisition of which has been claimed as an application of income under this section in the same ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r submitted that the year under consideration is the first year when subsection (6) to section 11 is inserted and the assessee has inadvertently claimed the depreciation on the asset which has already been allowed as an application. The ld AR also submitted that the assessee realized the error after filing the appeal before the CIT(A) and accordingly withdrew the ground. It is also brought to our attention that the assessee has not claimed any depreciation in the subsequent years. The ld AR accordingly argued that the AO is not correct in levying penalty for a bonafide error committed by the assessee which was subsequently conceded voluntarily. The ld AR also presented arguments on the legal ground that AO has not specified in the penalty o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he amendment to section 11 and that once the mistake is realized the assessee withdrew the ground raised against the disallowance of depreciation. Therefore it is contended that there is no intentional furnishing of inaccurate particulars of income on the part of the assessee. From the perusal of the facts, we notice that the assessee has not deliberately claimed the depreciation with an intention to make a inaccurate claim. This is evidenced by the fact that the assessee has voluntary conceded that the depreciation is erroneously claimed and accordingly withdrew the ground raised against the said claim before the CIT(A). The Hon ble Supreme Court in CIT vs. Pricewaterhouse Coopers Pvt. Ltd. [2012] 348 ITR 306 (SC) has held that there would ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... claimed depreciation in the subsequent years. Further the inadvertent error is voluntarily corrected by assessee by accepting the disallowance of depreciation before the CIT(A). In view of these discussions and considering settled position of law laid down in this regard, we hold that AO is not correct in levying penalty under section 271(1)(c) in assessee's case towards the disallowance of depreciation admitted by the assessee as inadvertently claimed. Since we have deleted the penalty considering the merits of the issue, the legal arguments of ld. AR have become academic not warranting any separate adjudication. 8. In result the appeal of the assessee is partly allowed. Order pronounced in the open court on 02-12-2024. - - TaxTMI ..... X X X X Extracts X X X X X X X X Extracts X X X X
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