2011 (4) TMI 1482 - AT - Income Tax

Tribunal cancels penalty for erroneous depreciation claim under Section 271(1)(c) of I.T. Act

The Tribunal allowed the appeal, and the penalty imposed under section 271(1)(c) of the I.T. Act for an alleged excess claim of depreciation and interest ... Penalty under section 271(1)(c) - Concealment of income - Furnishing inaccurate particulars - Disclosure in the return - Burden of proof on Revenue - Difference of opinion between Revenue and assesseePenalty under section 271(1)(c) - Furnishing inaccurate particulars - Disclosure in the return - Burden of proof on Revenue - Whether penalty under section 271(1)(c) is leviable for an excess depreciation claim that was disclosed in the return - HELD THAT: - The Tribunal held that penalty under section 271(1)(c) can be imposed only where there is concealment of income or furnishing of inaccurate particulars of income. In the present case the assessee had disclosed the claim for depreciation in the return and in the notes to accounts; the excess claim arose from a claim made on S.L.M. rates adopted by the company. Mere making of a claim which is later disallowed or found unsustainable in law does not, by itself, amount to furnishing inaccurate particulars. Concealment denotes a deliberate hiding of particulars and is distinct from a bona fide or disputed claim. The primary burden to establish either concealment or inaccurate particulars lies on the Revenue, and absent any finding that particulars supplied in the return were erroneous or incorrect, imposition of penalty is not justified. Applying these principles, and having regard to the facts that the depreciation claim was disclosed and that the dispute was essentially one of difference of opinion between the assessing authorities and the assessee, the Tribunal concluded that there was no basis for levy of penalty under section 271(1)(c).Penalty under section 271(1)(c) deleted as there was no concealment or furnishing of inaccurate particulars where the depreciation claim was disclosed in the return and the dispute was a difference of opinion.Final Conclusion: The appeal is allowed and the penalty imposed under section 271(1)(c) is deleted because the excess depreciation claim was disclosed in the return and the Revenue failed to establish concealment or furnishing of inaccurate particulars. Issues involved: Appeal against penalty imposed u/s 271(1)(c) of the I.T. Act for alleged excess claim of depreciation and interest in power generation unit.Summary:Issue 1: Alleged excess claim of depreciation and interestThe appeal was filed against the penalty imposed u/s 271(1)(c) of the I.T. Act for an alleged excess claim of depreciation and interest in the power generation unit named 'Kalani Wind-farm.' The assessee contended that the penalty was unjust as all information was disclosed at the time of filing the return, and there was no intention to conceal income or provide inaccurate particulars. The Assessing Officer argued that the excess claim of depreciation amounted to furnishing inaccurate particulars. The Tribunal considered the facts and legal precedents, including the decision in CIT vs. Reliance Petro Products Pvt. Ltd., and held that a mere wrong claim does not automatically lead to penalty u/s 271(1)(c). The Tribunal found that there was no deliberate concealment or furnishing of inaccurate particulars by the assessee, and hence, the penalty was deleted.In conclusion, the Tribunal allowed the appeal of the assessee, and the penalty imposed by the Assessing Officer was deleted.Order pronounced in the open Court on 21st April, 2011.