2012 (7) TMI 987

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....erving as follows:- " There is no appearance on behalf of the Assessee despite service. Section 271(1B) has been inserted in the Income Tax Act, 1961 by the Finance Act, 2008 with retrospective effect from 1st April, 1989. The inserted provision reads as follows:- "(IB) Where any amount is added or disallowed in computing the total income or loss of an assessee in any order of assessment or reassessment and the said order contains a direction for initiation of penalty proceedings under clause (c) of sub-section (1), such an order of assessment or reassessment shall be deemed to constitute satisfaction of the Assessing Officer for initiation of the penalty proceedings under the said clause (c)." In view of the amendment, learned coun....

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....company could improve the quality of its products. The Assessing Officer, however, did not accept the contention of the assessee. It was observed that the assessee had submitted that the purpose of the machines was to reduce the noise level of the horns and all the horns produced were checked on these machines so as to improve quality specifications. The Assessing Officer concluded that the usage of the machinery by the assessee was in the normal process of manufacture and that the assessee had not used the machinery for carrying out any research and development activity to justify the claim u/s 35 of the IT Act. According to the Assessing Officer, therefore, the machinery/equipment was part of the normal production facilities and were ent....

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....er, the Assessing Officer imposed a penalty of ` 3,34,634/- on the assessee. 8. By virtue of the impugned order, the Ld. CIT (A) deleted the penalty. 9. Aggrieved, the department is in appeal. 10. Challenging the impugned order, the Ld. DR has contended that the Ld. CIT (A) has erred in deleting the penalty correctly levied on the assessee; that, clearly, the assessee was entitled to depreciation @ 25% only and it was in order to evade tax that the assessee made a claim of depreciation @ 100%; that by so claiming depreciation at a higher rate, the assessee definitely concealed particulars of its income, for which, the penalty was correctly levied, which fact has erroneously been overlooked by the Ld. CIT (A) while deleting the penalty; a....