2012 (1) TMI 414 - AT - Income Tax

Tribunal cancels penalties for excess claims under tax sections, grants department option to re-initiate penalties if needed.

M/s. Atul Ltd. Versus DCIT, (OSD), Range 1, Ahmedabad And Vice-Versa

M/s. Atul Ltd. Versus DCIT, (OSD), Range 1, Ahmedabad And Vice-Versa - TMI Issues involved:The judgment involves issues related to penalty imposed u/s 271(1)(c) of the Income Tax Act for excess depreciation claimed, deduction claimed under u/s 80-IA for a new power plant, and excess claim for deduction u/s 80-IB.Penalty u/s 271(1)(c) for excess depreciation claimed:The assessee's appeal challenged the penalty imposed u/s 271(1)(c) for excess depreciation claimed. The Tribunal noted that the assessment had been set aside for a de novo assessment, leading to the cancellation of the penalty. The department was granted the option to re-initiate the penalty during the assessment if required by law.Validity of penalty u/s 271(1)(c) for deduction claimed under u/s 80-IA:The cross objection by the assessee contested the penalty imposed u/s 271(1)(c) for deduction claimed under u/s 80-IA. The Tribunal dismissed the cross objection as the penalty had been cancelled in a previous assessment year for similar reasons, following the decision of the Tribunal.Penalty u/s 271(1)(c) for excess claim of deduction u/s 80-IB:The revenue's appeal challenged the deletion of the penalty u/s 271(1)(c) for an excess claim of deduction u/s 80-IB. The Tribunal upheld the deletion of the penalty, considering the debatable nature of the deduction claim and the existence of favorable decisions for the assessee at the time of filing the return.In summary, the Tribunal dismissed the revenue's appeal while allowing the assessee's appeal and dismissing the cross objection. The penalties imposed u/s 271(1)(c) were cancelled based on the specific circumstances and legal precedents cited in each case.