2025 (1) TMI 558

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....the Learned AO erred in levying penalty of 271[1][c) of Rs. 3,16,27,259/- in respect of claim of depreciation which was voluntarily withdrawn by the Appellant. 2. In the facts and circumstances of the case and in law, the Assessing Officer erred in levying penalty u/s 271(1)(c) on the basis of notice us 274 r.ws 271(1)(c) wherein no specific charge of either tiling of inaccurate particulars or concealment of income was mentioned and thereby passing the order of penalty which is to be quashed as per recent judgement of Bombay High Court and Supreme Court. 2. The assessee is a charitable trust registered under section 12A of the Income Tax Act (the Act). The assessee filed the return of income for AY 2016-17 on 12.10.2016 declaring Nil inc....

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....urnishing of inaccurate particulars and the penalty proceedings may be dropped accordingly. However, the AO rejected the submissions of the assessee and proceeded to levy penalty of Rs. 3,16,27,259/- under section 271(1)(c) of the Act. 3. Before the CIT(A) besides contending the issues on merits, the assessee raised a legal ground that the AO in the order levying penalty has not specified under which limb of section 271(1)(c) the penalty is levied i.e. whether furnishing of inaccurate particulars or concealment of income. The CIT(A) adjudicated the legal ground against the assessee stating that the AO in the notice under section 271(1)(c) has specified that the assessee has furnished inaccurate particulars. However the CIT(A) has not given....

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.... the lower authorities. 6. We heard the parties and perused the material on record. Finance (No.2) Act 2014, inserted subsection (6) to section 11 to provide that if the acquisition of an asset is allowed as application of funds then the assessee once again cannot claim depreciation on the same asset as a deduction / application. For the year under consideration the assessee in the return of income has claimed depreciation on the asset the cost of which was already claimed as application. The AO while completing the assessment under section 143(3) has disallowed the depreciation. Though the assessee raised a ground contending the said disallowance before the CIT(A), subsequently withdrew the same. The AO initiated the penalty proceedings u....

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....on is the result of a quasi-criminal proceeding, and penalty will not ordinarily be imposed unless the party obliged, either acted deliberately in defiance of law or guilty of conduct, contumacious or dishonest, or acted in conscious disregard to its obligation. Penalty will not also be imposed merely because it is lawful to do so. Whether penalty should be imposed for failure to perform a statutory obligation is a matter of discretion of the authority to be exercised judicially and on a consideration of all the relevant circumstances. Even if a minimum penalty is prescribed, the authority competent to impose the penalty will be justified in refusing to impose penalty, when there is a technical or venial breach of the provisions of the Act ....