TaxTMI 
TaxTMI 
2007 (8) TMI 389
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....ring the year the assessee has not done any business. The loss claimed in the return of income relates to depreciation and miscellaneous expenditure. In the absence of any business done as admitted by the assessee by his letter dated February 1, 2006 the expenditure claimed cannot be allowed and depreciation is also not admissible and hence not allowed to be carried forward. Accordingly, the income is determined at 'nil' ignoring the loss returned. Further, in the computation statement, the assessee claimed business loss and also depreciation loss for earlier years starting from the assessment year 1998-99. The assessee has not filed the returns of income for the assessment years 1998-99, 1999-2000, 2000-01, 2001-02 and 2002-03 within the due date for filing the return of income. The assessee has claimed business loss and depreciation loss for the years 1998-99 to 2002-03 as under: -------------------------------------------------------------- Assessment Date of Business loss Depreciation Date of year filing (Rs.) &nb....
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....nbsp; (Sd.)............. K. Hariprasad Babu ACIT, Circle 16(1), Hyderabad." Against the above assessment order, the assessee did not file any appeal. From the reading of the above assessment order, it is found beyond any doubt or dispute that the Assessing Officer has not recorded any satisfaction for initiating penalty proceedings under section 271(1)(c) of the Act. However, in the penalty order passed under section 271(1)(c) of the Act dated August 30, 2006, it was observed by the Assessing Officer that at the time of completion of assessment a notice under section 271(1)(c) of the Act was issued. It was further observed by the ....
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....otality of the facts of the case, the legal provisions as discussed in the assessment order and keeping in view the ratio of the decision of the honourable Madras High Court in the case of Sri Rajarathinam Transports P. Ltd. v. CIT [1993] 199 ITR 203, in my considered opinion the appellant has consciously made such wrong claim for excess loss of Rs. 4,91,85,509 in its return for the assessment year 2004-05 as mentioned by the Assessing Officer in para 4 of the order and hence penalty under section 271(1)(c) of the Act is exigible in this case on the ground of concealment of income. The Assessing Officer, therefore, was justified in levying the penalty of Rs. 1,72,15,033 and hence the impugned order is confirmed." Still aggrieved by the order of the learned Commissioner of Income-tax (Appeals), the assessee is in appeal before us challenging in all the grounds, the sustenance of penalty imposed by the Assessing Officer under section 271(1)(c) of the Act. At the time of hearing, learned counsel for the assessee has also raised an additional ground of appeal, which reads as under: "The penalty proceedings having been initiated without recording any satisfaction whatsoever dur....
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.... assessment year 2003-04 for the proposition that on disallowance of depreciation there cannot be any levy of penalty under section 271(1)(c) of the Act. On the additional ground of appeal, learned counsel for the assessee submits that the penalty under section 271(1)(c) has been imposed without recording any satisfaction whatsoever, during the course of assessment proceedings. Therefore, the levy of penalty under section 271(1)(c) of the Act is unsustainable and in support thereof, reliance was also placed on the decision of the Tribunal in Anand Granites International Pvt. Ltd. v. Deputy CIT in I.T.A. 293/Hyd/2002 dated September 21, 2006, for the assessment year 1992-93 and on a recent judgment of the honourable Supreme Court in the case of Dilip N. Shroff v. Joint CIT reported in [2007] 291 ITR 519. On the other hand, the learned Departmental representative while strongly relying on the order of the Assessing Officer and the learned Commissioner of Income-tax (Appeals), submits that there was failure on the part of the assessee to file returns of income as per the provisions of section 139(3) of the Act. Since the assessee has consciously made wrong claim of excess loss of R....
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....re) and S. Santhosa Nadar v. First Addl. ITO [1962] 46 ITR 411 (Mad) held as a Third Member, at page 13 as under: "I have carefully considered the submissions of both the parties. It is clear from the above quoted case law that the matter in issue is not res integra but is covered by three decisions of the High Courts. No decision taking a contrary view was cited on behalf of the Revenue. The decisions cited by the learned Departmental representative in the cases of K.P. Reddy v. CIT [1968] 68 ITR 638 (AP); Thakur Veerpal Singh v. CIT [1988] 172 ITR 238 (MP) and CIT v. Dass Jewellers [2002] 258 ITR 668 (Delhi) do not deal with the controversy before me. In all the above cases, the assessee submitted a return and did show in return income which was much less than the assessed income and accordingly it was held that the onus was on the assessee to prove that it was not a case of concealment or of deemed concealment. No such situation arises in this case. Likewise omission of word 'deliberate' from section 271(1)(c) of the Income-tax Act, is not relevant to solve the controversy. The above omission has shifted burden of proof from the Revenue to the assessee. It has nothing to do w....
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....ection 271(1)(c) of the Act on the disallowance of depreciation, we find that depreciation was also disallowed by the Assessing Officer as no business was done by the assessee. However, there is no material on record to show that the assets on which depreciation was claimed are not owned by the assessee or the same were not used by the assessee for his business purposes or the assessee has made false claim of depreciation. Merely because the Assessing Officer did not agree with the assessee with regard to the allowance of depreciation, it cannot be said that there was concealment of income or furnishing of inaccurate particulars. In P.M. Telelinks Ltd. v. Deputy CIT relied on by learned counsel for the assessee, we find that the assessee has claimed depreciation at 100 per cent. on work rolls. However, the Assessing Officer found that the work rolls are part of plant and machinery and, therefore, eligible for depreciation at 25 per cent. and accordingly he disallowed depreciation to the extent of Rs. 11,50,413. It has been held by the Tribunal by relying on the judgments of the honourable Orissa High Court in the case of CIT v. Indian Metals and Ferro Alloys Ltd. [1995] 211 ITR 35 ....