Executive Director (Finance) of Airport Authority of India, New Delhi v. ACIT, New Delhi

ITA 4274/DEL/2013 | 2008-2009
Pronouncement Date: 27-04-2015 | Result: Allowed

Appeal Details

RSA Number 427420114 RSA 2013
Assessee PAN AAACA6412D
Bench Delhi
Appeal Number ITA 4274/DEL/2013
Duration Of Justice 1 year(s) 9 month(s) 12 day(s)
Appellant Executive Director (Finance) of Airport Authority of India, New Delhi
Respondent ACIT, New Delhi
Appeal Type Income Tax Appeal
Pronouncement Date 27-04-2015
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted A
Tribunal Order Date 27-04-2015
Date Of Final Hearing 24-02-2015
Next Hearing Date 24-02-2015
Assessment Year 2008-2009
Appeal Filed On 15-07-2013
Judgment Text
IN TH E INCOME TAX APPELLATE TRIBUNAL DELHI BENCH A : NEW DELHI BEFORE SHRI N.K. SAINI ACCOUNTANT MEMBER AND SHRI C.M. GARG JUDICIAL MEMBER ITA NO. 4274 /DEL/201 3 ASSESSMENT YEAR 200 8 - 0 9 AIRPORTS AUTHORITY OF INDIA VS. ACIT CIRCLE 1(1) RAJIV GAND HI BHAWAN NEW DELHI SAFDARJUNG AIRPORT NEW DELHI. (PAN AAA CA 6412 D ) ( APPELLANT) (RESPONDENT) DATE OF HEARING : 24 .0 2 .2015 DATE OF PRONOUNCEMENT : 27. 0 4 .2015 APPELLANT BY : S RI VED JAIN ADOCATE AND RANO JAI N CA RESPONDENT BY : MS . Y KAKKAR DR AND SHRI V. CHAURASIA CA ORDER PER SHRI C.M. GARG J M : 1. THIS APPEAL HAS BEEN PREFERRED BY THE ASSESSEE AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) - IV NEW DELHI DATED 11.04.2013 IN A PPEAL NO.214/2012 - 13 FOR THE AY 2008 - 09 BY WHICH THE PENALTY ORDER DATED 31.01.2013 PASSED U/S 271(1)(C) OF THE ACT HAS BEEN CONFIRMED UPHOLDING THE PENALTY OF RS.50 98 500/ - . IT A NO. 4274 /DEL /201 3 2 2. ALTHOUGH THE ASSESSEE HAS RAISED AS MANY AS SEVEN GROUNDS IN THIS APPEAL B UT EXCEPT GROUND NO.1 OTHER GROUNDS ARE ARGUMENTATIVE AND SUPPORTIVE TO THE MAIN GROUND NO.1 WHICH READS AS UNDER: - 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE ORDER PASSED BY THE LEARNED CIT(A) CONFIRMING THE PENALTY UNDER SECTION 271(1)(C) IS BA D BOTH IN THE EYE OF LAW AND ON FACTS. 3. BRIEFLY STATED THE FACTS GIVING RISE TO THIS APPEAL ARE THAT THE ASSESSEE HAD CAPITALIZED A SUM OF RS.20.18 CRORES UNDER THE HEAD FIXED ASSETS FOR AMRITSAR AIRPORT DURING THE YEAR UNDER APPEAL AND CLAIM ED DEPRECI ATION THEREON . THE ASSESSING OFFICER NOTICED THAT THE COMPTROLLER & AUDITOR GENERAL C &A G HAS MADE AN OBSERVATION THAT COMPLETION CERTIFICATE IN RESPECT OF ABOVE AMOUNT WAS NOT PRODUCED. THE AO ASKED THE ASSESSEE TO JUSTIFY THE CLAIM OF THE DEPRECIATION ON FIXED ASSETS. THE ASSESSEE VIDES ITS LETTER DATED 25.10.2010 FILED THE DETAILS OF SAID AMOUNT CAPITALIZED BY IT DURING THE YEAR. THE ASSESSING OFFICER FOUND THAT THE WORK OF FIXED ASSETS OF RS.14.62 ONLY WAS COMPLETED DURING THE PREVIOUS YEAR AND THEREFORE THE ASSESSEE COULD HAVE CLAIMED DEPRECIATION ON THAT AMOUNT ONLY. THE AO WAS OF THE VIEW THAT THE ASSESSEE MADE WRONG CLAIM OF THE DEPRECIATION IN RESPECT OF FIXED ASSETS OF RS.5.56 CRORES AND HE DISALLOWED THE DEPRECIATION OF RS.1.5 CRORES. IN THE APPEA L PREFERRED BY THE ASSESSEE THE CIT(A) VIDE HIS APPEAL ORDER DATED 10.01.2012 HAD GIVEN A FINDING THAT THE ASSESSEE HAD ACTUAL CLAIMED DEPRECIATION OF RS.1.5 CRORES IN RESPECT OF THE ASSETS OF RS.5.56 CRORES AND HE DIRECTED THE AO TO VERIFY THE ACTUAL DEP RECIATION CLAIMED BY THE ASSESSEE IN RESPECT IT A NO. 4274 /DEL /201 3 3 OF ABOVE ASSETS OF RS.5.56 CRORES AND DIRECTED THE AO TO RESTRICT THE DISALLOWANCE TO RS.1.5 CRORES AS AGAINST RS.2.48 CRORES DISALLOWED BY THE AO. SINCE THE ASSESSEE DID NOT PREFER ANY APPEAL AGAINST THE ORDER OF THE CIT(A) THEREFORE THE DISALLOWANCE OF RS.1.5 CRORES HAD ATTAINED FINALITY. THEREAFTER THE AO INITIATED PENALTY PROCEEDINGS AND AFTER GIVING DUE OPPORTUNITY OF HEARING FOR THE ASSESSEE LEVIED IMPUGNED PENALTY OF RS.50 98 500/ - U/S 271(1)(C) OF THE ACT BY OBSERVING THAT THE ASSESSEE HAS FURNISHED IN ACCURATE PARTICULAR OF ITS INCOME TO THE EXTENT OF 1.5 CRORES AND THEREFORE THE ASSESSEE LIABLE FOR PENALTY . 4 . BEING AGGRIEVED BY THE SAID PENALTY ORDER DATED 31.01.2013 THE ASSESSEE PREFERRED AN APPE AL BEFORE THE CIT(A) BUT REMAINED EMPTY HAND ED AS THE APPEAL OF THE ASSESSEE WAS ALSO DISMISSED B Y PASSING THE IMPUGNED ORDER AND THE PENALTY LEVIED BY THE AO WAS CONFIRMED. NOW THE ASSESSEE IS BEFORE THIS TRIBUNAL WITH THE MAIN GROUND AS REPRODUCED HEREI NABOVE. 5 . WE HAVE HEARD THE ARGUMENTS OF BOTH THE SIDES CAREFULLY AND PERUSED THE MATERIAL PLACED ON RECORD. THE LD. COUNSEL OF THE ASSESSEE SUBMITTED THAT THE ASSESSEE IS A PUBLIC SECTOR UNDERTAKING FUNCTIONING UNDER THE MINISTRY OF CIVIL AVIATION GOVE RNMENT OF INDIA AND IT WAS FORMED BY SPECIAL ENACTMENT OF THE PARLIAMENT THROUGH AIRPORT AUTHORITY OF INDIA ACT 1994. THE LD. COUNSEL FURTHER POINTED OUT THAT THE ASSESSING OFFICER DISALLOWED THE CLAIM OF DEPRECIATION AMOUNTING TO RS.2.48 CRORES BUT THE C IT(A) DIRECTED THE AO TO RESTRICT THE DISALLOWANCE TO RS.1.5 CRORES WHICH ATTAINED FINALITY AS THE ASSESSEE DID NOT PREFER IT A NO. 4274 /DEL /201 3 4 ANY APPEAL AGAINST THE SAID DISALLOWANCE. LD. COUNSEL OF THE ASSESSEE FURTHER CONTENDED THAT THE AO IMPOSED IMPUGNED PENALTY IGNORIN G THE FACT THAT NEITHER THERE WAS A MALA FIDE CONCEALMENT OF INCOME NOR ASSESSEE FURNISHED INACCURATE PARTICULARS OF ITS INCOME BECAUSE THE ASSESSEE BEING A PUBLIC SECTOR UNDERTAKING IS SUBJECT TO C & AG AUDIT AND THE REPORT OF THE C&AG WAS THE BASIS OF THE DISALLOWANCE OF THE CLAIM OF DEPRECIATION WHICH WAS ALSO PART OF ANNUAL REPORT. LD. COUNSEL FURTHER POINTED OUT THAT THE ASSESSEE FILED ITS RETURN OF INCOME FOR AY 2008 - 09 ON 30.09.2008 AND SUBSEQUENTLY THE C&AG MADE CERTAIN OBSERVATION ABOUT THE CLAIM OF DEPRECIATION ON ASSETS CAPITALIZED VIDE ITS REPORT DATED 27.10.2008 I.E. AFTER ASSESSEE HAD FILED THE RETURN OF INCOME S HOWING THE BONA FIDE ACT OF THE ASSESSEE. LD. COUNSEL ALSO CONTENDED THAT ON VERIFICATION THE ASSESSEE COMPANY FOUND THAT OUT OF AMOUN T OF RS.20.18 CRORES THE CLAIM OF DEPRECIATION ON ASSETS OF RS.14.62 CRORES WAS CORRECT AS THESE WORKS WERE COMPLETED IN THE FINANCIAL YEAR 2007 - 08 PERTAIN TO AY 2008 - 09. THE LD. COUNSEL ALSO POINTED OUT THAT AGREEING WITH THE VIEW AND OBSERVATION OF C&AG THE ASSESSEE COMPANY REVERSED ITS CLAIM IN THE RETURN FOR AY 2009 - 10 F ILED ON 29.09.2009 VOLUNTARILY SUO MOTO . 6. THE LD. COUNSEL STRENUOUSLY CONTENDED THAT AO FIRST TIME RAISED THE ISSUE OF C&AG REPORT BY ISSUING NOTICE AND QUESTIONNAIRE ABOUT CLAIM OF DEPRECIATION ON 09.08.2010 ON THE BASIS OF DISCLOSER MADE BY THE ASSESSEE IN THE RETURN FOR AY 2009 - 10 WHICH WAS FILED ON 29.09.2009. LD. COUNSEL FURTHER MADE IT IS CLEAR THAT THE ASSESSEE REVISED ITS CLAIM OF DEPRECIATION SUO MOTO VOLUNTARILY AND THE CIT(A) WAS IT A NO. 4274 /DEL /201 3 5 NOT CORRECT IN AGREEING WITH THE VIEW OF THE AO THAT THE REVERSAL OF CLAIM WAS NOT A BONA FIDE MISTAKE AND THE ASSESSEE HAS MADE A WRONG CLAIM OF DEPRECIATION AND FURNISHED INACCURATE PARTICULARS OF ITS INCOME TO THE EXTENT OF RS.1.5 CRORES. 7 . LD. COUNSEL VEHEMENTLY CONTENDED THAT WHILE CONFIRMING THE PENALTY THE CIT(A) MISUNDERSTOOD THE ENTIRE FACTS AND CIRCUMSTANCES OF THE CASE BECAUSE THE AMOUNT OF RS.20.18 CRORES COMPRISES OF TWO FIGURES WHICH RS.14.62 CRORES FOR WHICH THE ASSESSEE HAS FIL ED THE CERTIFICATES OF COMPLETION WHICH HAS NOT BEEN DISPUTED BY THE AO AND THE CIT(A) AS WELL AND ON BALANCE AMOUNT OF RS.5.56 CRORES THE DEPRECIATION WAS REVERSED IN THE RETURN OF NEXT ASSESSMENT YEAR I.E. 2009 - 10 AND THIS REVERSION WAS MADE MUCH BEFOR E THE AO RAISED THE ISSUE. DURING THE ARGUMENTS LD. COUNSEL OF THE ASSESSEE SUBMITTED THAT A COPY OF THE RETURN OF INCOME FOR AY 2009 - 10 WHICH WAS FILED ON 29.09.2009 AND ALSO SUBMITTED THAT COPY OF THE 30 TH ANNUAL REPORT 2007 PAGE 52 OF THE ASSESSEE UNDE RTAKING WHEREIN DATE OF SUBMISSION OF REPORT HAS BEEN MENTIONED AS 27.10.2008 WHEREIN THE C&AG HAS POINTED OUT THAT THE CAPITAL WORK IN PROGRESS AND PROFIT ARE UNDER STATED BY 20.18 CRORES AND 2.48 CRORES RESPECTIVELY AND THE DEPRECIATION IS OVER STATED B Y 2.48 CRORES. 8 . FROM THE PENALTY ORDER WE NOTE THAT THE ASSESSING OFFICER AT PAGE 4 HAS NOTED THAT AO VIDE LETTER DATED 09.08.2010 HAS ASKED THE ASSESSEE TO JUSTIFY THE CLAIM OF DEPRECIATION ON FIXED ASSETS AND THE ASSESSEE IN ITS REPLY DATED 25.10.201 0 FILED DETAILS OF RS.20.18 CRORES CAPITALIZED BY IT DURING THE YEAR. UNDISPUTEDLY THE IT A NO. 4274 /DEL /201 3 6 ASSESSING OFFICER HAS MADE ADDITION OF RS.2.48 CRORES ON THE BASIS OF C&AG REPORT AND REVERSION OF THE CLAIM BY THE ASSESSEE IN ITS RETURN OF INCOME FOR AY 2009 - 10. IN THIS SITUATION WE ARE DECLINE D TO ACCEPT THIS CONTENTION OF THE REVENUE THAT THE ASSESSEE REVISED ITS CLAIM ONLY AFTER WHEN THE AO RAISED QUERY ABOUT THE CLAIM OF DEPRECIATION. WHILE IN THE PENALTY ORDER AO HIMSELF NOTED THAT THE QUERY WAS RAISED BY THE AO VIDE LETTER DATED 09.08.2010 THEN THIS FACT IS CLEAR THAT THE ASSESSEE FILED ITS RETURN OF INCOME FOR AY 2008 - 09 ON 30.09.2008 THE C&AG POINTED OUT STATEMENT OF DEPRECIATION VIDE 30 TH ANNUAL REPORT DATED 27.10.2008 AND THE ASSESSEE REVERSED ITS CLAIM O F DEPRECIATION AS PER DIRECTION OF THE C&AG IN ITS RETURN FOR AY 2009 - 10 FILED ON 29.09.2009. WE CLEARLY NOTE THAT THE ASSESSING OFFICER PICKED UP THIS ISSUE ON THE BASIS OF REVERSAL OF CLAIM SUBMITTED BY THE ASSESSEE IN THE RETURN OF INCOME FOR THE SUBSEQ UENT YEAR WHICH WAS UNDISPUTEDLY FILED ON 29.09.2009. 9 . UNDER ABOVE NOTE FACTS AND CIRCUMSTANCES OF THE CASE CONTENTION OF THE LD. COUNSEL FOR THE ASSESSEE THAT THE ASSESSEE REVISED AND REVERSED ITS CLAIM IN THE RETURN OF SUBSEQUENT YEAR AS PER COMMENTS AND OBSERVATION OF C&AG MADE IN THE 30 TH ANNUAL REPORT 2007 VOLUNTARILY AND SUO MOTO ARE FOUND TO BE ACCEPTABLE . 10 . LD. COUNSEL OF THE ASSESSEE FURTHER PLACING RELIANCE OF DECISIONS OF HIGH COURT OF MADHYA PRADESH IN THE CASE OF DCIT VS. ELECTRICAL CO OPERATIVE SOCIETY LTD. REPORTED IN 279 ITR 319 (MP) SUBMITTED THAT EVERY CONCEALMENT DOES NOT ATTRACTED THE PENALTY U/S 271(1)(C) OF THE ACT AND IT MUST BE A DELIBERATE AND INTENTIONAL BEING IN THE KNOWLEDGE OF THE ASSESSEE SO AS TO EVADE PAYMENT OF INCOME TAX. THE LD. IT A NO. 4274 /DEL /201 3 7 COUNSEL FURTHER POINTED OUT THAT THE ASSESSEE BEING A NONPROFIT ORGANIZATION MANAGED AND CONTROLLED BY THE GOVERNMENT OF INDIA FOR PROVIDING SERVICES IN THE FIELD OF CIVIL AVIATION IN INDIA THEN IT CANNOT BE HELD THAT AT DELIBERATE INTENTION TO EVADE TO PAYMENT OF DUE TAX. 11 . LD. COUNSEL OF THE ASSESSEE ALSO PLACED RELIANCE ON THE PLETHORA OF JUDGMENT INCLUDING THE DECISION OF HON BLE JURISDICTIONAL HIGH COURT OF DELHI IN THE CASE OF CIT VS. MTNL IN ITA NO. 626/2011 DELIVERED ON 10.10.2011 THE DECISION OF THE HON BLE SUPREME COURT IN THE CASE OF CIT VS RELIANCE PETRO PRODUCTS PVT. LT D. REPORTED IN 322 ITR 158 (SC) AND THE DECISION OF HON BLE SUPREME COURT IN THE CASE OF PRICE WATERHOUSE COOPERS (P.) LTD. REPORTED IN [2012] 348 ITR 306 (SC). LD. COUNSEL OF THE ASSESSEE ALSO SOUGHT SUPPORT FROM THE DECISION OF THE HON BLE MADHYA PRADESH HIGH COURT IN THE CASE OF CIT VS. SENIOR ACCOUNTS OFFICER MADHYA PRADESH ELECTRICITY BOARD REPORTED IN [2005] 276 ITR 84 (MP) DECISION OF ITAT NAGPUR BENCH IN THE CASE OF STEEL AUTHORITY OF INDIA LTD. VS. ITO REPORTED IN ITD 100 029/TTJ 107 372 ITAT [ NAGPUR ] THE DECISION OF ITAT AHEMDABAD BENCH IN THE CASE OF DCIT VS. INDIAN PETROCHEMICALS CORPORATION LTD. REPORTED IN 123 ITD 293 (ITAT AHEMDABAD) AND DECISI ON OF ITAT BOMBAY BENCH IN THE CASE OF DENA BANK VS. INSPECTING ASSISTANT COMMISSIONER REPORTED IN 25 ITD 109 (ITAT BOMBAY) AND SUBMITTED THAT IT WOULD NOT BE AN UNREASONABLE PRESUMPTION THAT IT COULD NOT BE AN INTENTION OF ORGANIZATION OWN ED AND RUN BY GO VERNMENT OF INDIA TO CONCEAL ITS INCOME OR TO FURNISH INACCURATE PARTICULARS OF ITS INCOME WITH A IT A NO. 4274 /DEL /201 3 8 VIEW OR INTENTION TO EVADE PAYMENT OF PROPER AND DUE TAXES TO THE GOVERNMENT OF INDIA. WE ALSO NOTE THAT WHILE CONFIRMING THE IMPUGNED PENALTY THE CIT(A) HAS PLACED RELIANCE ON THE JUDGMENT OF THE HON BLE SUPREME COURT IN THE CASE OF UNION OF INDIA VS. DHARMENDRA TEXTILE PROCESSORS REPORTED IN 306 ITR 277 (SC) WHEREIN IT WAS HELD THAT PENALTY UNDER THE FISCAL STATUE IS FOR BREACH OF CIVIL LIABILITY AND WILLFUL CONCEALMENT IS NOT AN ESSENTIAL INGRIDMENT FOR ATTRACTING THE CIVIL LIABILITY. LD. DR HAS ALSO DRAWN OUR ATTENTION TOWARDS THIS FACT THAT WHEN THE ASSESSEE DID NOT HAD COMPLETION CERTIFICATE IN RESPECT OF IN COMPLETED ASSETS AMOUNTING TO RS.5.56 CRORES TH EN THE CLAIM OF DEPRECIATION ON ENTIRE AMOUNT OF RS.20.18 CRORES IS ENACT OF FURNISHING OF INACCURATE PARTICULARS AND ALSO AN ACT OF CONCEALING THE TRUE PARTICULARS OF INCOME OF THE ASSESSEE THEREFORE PENALTY LEVIED BY THE AO WAS CORRECTLY CONFIRMED AND UPHELD BY THE CIT(A). 12 . IN VIEW OF ABOVE RIVAL CONTENTION WE NOTE THAT SINCE BY THE EARLIER PART OF THIS ORDER WE HAVE ALREADY HELD THAT THE ASSESSEE REVERSED ITS CLAIM OF DEPRECIATION WHEN THE C&AG REPORT POINTED OUT OVER STATEMENT OF CLAIM OF DEPRECI ATION IN THE 30 TH ANNUAL REPORT DATED 27.10.2008 AND THE ASSESSEE VOLUNTARY AND SUO MOTO REVERSED AND REVISED ITS CLAIM OF DEPRECIATION IN ITS RETURN OF INCOME FILED FOR AY 2009 - 10 ON 30.09.2009. IT IS ALSO CLEAR THAT THE ASSESSING OFFICER NOTED THIS FACT THAT THE ASSESSEE ITSELF ACCEPTS THAT THE FIXED ASSETS AMOUNTING TO RS.5.56 CRORES WERE REVERSED IN THE SUBSEQUENT FINANCIAL YEAR THEREFORE DEPRECIATION OF ABOVE ASSETS IS NOT ADMISSIBLE DURING THE YEAR. IN THIS SITUATION THE ASSESSEE BEING A PUBLIC SEC TOR UNDERTAKING IT A NO. 4274 /DEL /201 3 9 GOVERNMENT OF INDIA WOULD NOT FURNISH INACCURATE PARTICULARS OF ITS INCOME WITH THE CONSCIOUS INTENTION TO CONCEAL ITS INCOME WITH THE VIEW TO EVADE PAYMENT OF PROPER TAXES DUE TO THE GOVERNMENT OF INDIA. 1 3 . AS THIS JUNCTURE WE RESPECTFU LLY TAKE COGNIZANCE OF OBSERVATION OF THE HON BLE SUPREME COURT IN THE CASE OF RELIANCE PETRO PRODUCTS PVT. LTD. (SUPRA) WHEREIN IT WAS HELD THAT U/S 271(1)(C) OF THE ACT PENALTY CANNOT BE IMPOSED EVEN FOR MAKING UNSUSTAINABLE CLAIM. THE HON BLE APEX COURT HAS ALSO CONSIDERED AND REFERRED THE RATIO OF ITS JUDGMENT IN THE CASE OF DHARMENDRA TEXTILE PROCESSORS (SUPRA). THE RELEVANT PART OF THIS ORDER READS AS UNDER: - '(I) S. 271 (1) (C) APPLIES WHERE THE ASSESSEE 'HAS CONCEALED THE PARTICULARS OF HIS INCOME O R FURNISHED INACCURATE PARTICULARS OF SUCH INCOME'. THE PRESENT WAS NOT A CASE OF CONCEALMENT OF THE INCOME . AS REGARDS THE FURNISHING OF INACCURATE PARTICULARS NO INFORMATION GIVEN IN THE RETURN WAS FOUND TO BE INCORRECT OR INACCURATE. THE WORDS IN A CCUR A TE PARTICULARS' MEAN THAT THE DETAILS SUPPLIED IN THE RETURN ARE NOT ACCURATE NOT EXACT OR CORRECT NOT ACCORDING TO TRUTH OR ERRONEOUS. IN THE ABSENCE OF A FINDING BY THE AO THAT ANY DETAILS SUPPLIED BY THE ASSESSEE IN ITS RETURN WERE FOUND TO BE INCORRE CT OR ERRONEOUS OR FALSE THERE WOULD BE NO QUESTION OF INVITING PENALTY U/S 271 (1 )(C). (II) THE ARGUMENT OF THE REVENUE THAT 'SUBMITTING AN INCORRECT CLAIM FOR EXPENDITURE WOULD AMOUNT TO GIVING INACCURATE PARTICULARS OF SUCH INCOME' IS NOT CORRECT. BY NO STRETCH OF IMAGINATION CAN THE MAKING OF AN INCORRECT CLAIM IN LAW TANTAMOUNT TO FURNISHING INACCURATE PARTICULARS. A MERE MAKING OF THE CLAIM WHICH IS NOT SUSTAINABLE IN LAW BY ITSELF WILL NOT AMOUNT TO FURNISHING INACCURATE PARTICULARS REGARDING T HE INCOME OF THE ASSESSEE. IF THE CONTENTION OF THE REVENUE IS ACCEPTED THEN IN CASE OF EVERY RETURN WHERE THE CLAIM MADE IS NOT ACCEPTED BY THE AO FOR ANY REASON THE ASSESSEE WILL INVITE PENALTY U/S 271 (1 )(C). THAT IS CLEARLY NOT THE INTENDMENT OF THE LEGISLATURE. IT A NO. 4274 /DEL /201 3 10 (III) THE LAW LAID DOWN IN DILIP SHROFF291 ITR 519 (SE) AS TO THE MEANINGS OF THE WORDS 'CONCEAL' AND 'INACCURATE' CONTINUES TO BE GOOD LAW BECAUSE WHAT WAS OVERRULED IN DHARMENDRA TEXTILE PROCESSORS306 ITR 277 (SC) WAS ONLY THAT PART IN DILI P SHROFF WHERE IT WAS HELD THAT MENS REA WAS AN ESSENTIAL REQUIREMENT FOR PENALTY U/S 271 (1)(C).' 14 . ON THIS ISSUE WE FURTHER RESPECTFULLY TAKE COGNIZANCE OF OBSERVATION AND CONCLUSION OF HON BLE MADHYA PRADESH HIGH COURT IN THE CASE OF CIT VS. SENIOR ACCOUNTS OFFICER (SUPRA) WHEREIN IT WAS HELD THAT IF THE EXPLANATION OFFERED BY THE ASSESSEE WAS BONA FIDE AND DESERVES TO BE ACCEPTED THEN IT WOULD NOT A CASE OF DELIBERATE CONCEALMENT WITH THE VIEW TO EVADE PAYMENT OF TAX AND PUTTING IN REVENUE TO LOSS . IN THIS JUDGMENT THEIR LORDSHIP SPEAKING FOR HON BLE HIGH COURT OF MADHYA PRADESH OBSERVED AS FOLLOWS: - 'IN OUR OPINION THE TRIBUNAL RIGHTLY ACCEPTED THE EXPLANATION OFFERED BY THE BOARD/ASSESSEE. IT WAS NOT A CASE OF DELIBERATE ATTEMPT ON THE PART OF T HE ASSESSEE TO AVOID PAYMENT BY WAY OF DEDUCTION FOR BEING DEPOSITED. THE ASSESSEE IS NOT A PRIVATE BUSINESSMAN BUT IT IS A GOVERNMENT STATUTORY ORGANIZATION. MOREOVER THERE WAS SOME CONFUSION AS REGARDS THE EXTENT OF PERCENTAGE TO BE DEDUCTED FROM THE DIF FERENT CLASS OF CUSTOMERS. NO SOONER IT WAS CLARIFIED THE BOARD MADE COMPLIANCE FROM THEIR OWN FUNDS. IN A CASE OF THIS NATURE THE LAW LAID DOWN BY THE SUPREME COURT IN THE CASE OF HINDUSTAN STEEL LTD. V. STATE OF ORISSA [1972J 83 ITR 26 (SC); [1970J 25 STC 211 (SC) WHEN THEIR LORDSHIPS HELD: '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 JUD ICIALLY 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 PROVI SIONS OF THE ACT IT A NO. 4274 /DEL /201 3 11 OR WHERE THE BREACH FLOWS FROM A BONA FIDE BELIEF THAT THE OFFENDER IS NOT LIABLE TO ACT IN THE MANNER PRESCRIBED BY STATUTE. ' IN OUR OPINION THE AFORESAID PRINCIPLE OF LAW SQUARELY APPLY TO THE FACTS OF THIS CASE IF WE EXAMINE THE EXP LANATION OFFERED BY THE BOARD/ASSESSEE FOR NOT DEPOSITING/DEDUCTING THE TAX DEDUCTED AT SOURCE FROM THE PARTICULAR CLASS OF CONSUMERS. IN OUR VIEW THE EXPLANATION WAS BONA FIDE AND DESERVES TO BE ACCEPTED. IN NO CASE WAS IT A CASE OF DELIBERATE CONCEALME NT OR WAS DONE WITH A VIEW TO EVADE PAYMENT OF TAX AND PUTTING THE REVENUE TO LOSS. IN VIEW OF THE AFORESAID DISCUSSION WHILE CONCURRING WITH THE VIEW TAKEN BY THE TRIBUNAL WE DISMISS THE APPEAL AND UPHOLD THE ORDER OF THE TRIBUNAL.' 15 . ON THE BASIS O F FOREGOING DISCUSSION WE REACH TO A CONCLUSION THAT THE PENALTY U/S 271(1)(C) OF THE ACT CANNOT BE IMPOSED A MERELY BECAUSE IT IS LAWFUL TO DO SO BUT FOR IMPOSING PENALTY IT IS INCUMBENT UPON THE REVENUE AUTHORITY TO SO THAT THE ASSESSEE HAS CONCEALED TH E PARTICULAR OF H I S INCOME OR FURNISHED INACCURATE PARTICULARS OF SUCH INCOME. AS PER EXPLANATION - 1 TO SECTION 271(1)(C) OF THE ACT THE PENALTY IS UNAVOIDABLE WHEREIN RESPECT OF ANY FACTS MATERIAL TO THE COMPUTATION OF THE TOTAL INCOME OF ANY SUCH PERSON U NDER THE ACT IS FOUND TO BE AN ACT OF CONSCIOUS CONCEALMENT OF PARTICULARS OF INCOME OR FOUND TO BE HAVING FURNISHED INACCURATE PARTICULARS OF INCOME. THE SAID EXPLANATION - 1 TO SECTION 271(1)(C) OF THE ACT READS AS UNDER: EXPLANATION 1. - WHERE IN RESPECT OF ANY FACTS MATERIAL TO THE COMPUTATION OF THE TOTAL INCOME OF ANY PERSON UNDER THIS ACT - (A) SUCH PERSON FAILS TO OFFER AN EXPLANATION OR OFFERS AN EXPLANATION WHICH IS FOUND BY THE [ASSESSING] OFFICER OR THE [COMMISSIONER (APPEALS)] [OR THE [ PRINCIPAL COMMISSIONER OR] COMMISSIONER] TO BE FALSE OR IT A NO. 4274 /DEL /201 3 12 (B) SUCH PERSON OFFERS AN EXPLANATION WHICH HE IS NOT ABLE TO SUBSTANTIATE [AND FAILS TO PROVE THAT SUCH EXPLANATION IS BONA FIDE AND THAT ALL THE FACTS RELATING TO THE SAME AND MATERIAL TO THE COMPUTATION OF HIS TOTAL INCOME HAVE BEEN DISCLOSED BY HIM] THEN THE AMOUNT ADDED OR DISALLOWED IN COMPUTING THE TOTAL INCOME OF SUCH PERSON AS A RESULT THEREOF SHALL FOR THE PURPOSES OF CLAUSE (C) OF THIS SUB - SECTION BE DEEMED TO REPRESENT THE INCOME IN RESPECT OF WHICH PARTICULARS HAVE BEEN CONCEALED. 16 . TURNING TO THE FACTS OF THE PRESENT CASE AS WE HAVE ALREADY NOTE AND OBSERVED THAT THE ASSESSEE BEING A PUBLIC SECTOR UNDERTAKING OF GOVERNMENT OF INDIA REVERSED ITS CLAIM IN THE SUBSEQUENT RETURN OF INCOME FO R AY 2009 - 10 ON RECEIPT OF C&AG REPORT DATED 27.10.2008. THE ASSESSEE REVERSED ITS CLAIM OF DEPRECIATION ON 29 .09.2009 . THE AO AT THE VERY FIRST TIME RAISED QUERY ABOUT THE CLAIM OF DEPRECIATION ON 09.08.2010 WHEN THE AO NOTICED THAT THE ASSESSEE ITSELF AC CEPTED THAT THE DEPRECIATION CLAIMED ON FIXED ASSETS AMOUNTING TO RS.5.56 CRORES IS OVERSTATED AND THE SAME WAS REVERSED IN THE RETURN OF INCOME OF THE SUBSEQUENT FINANCIAL YEAR. WE HAVE ALREADY OBSERVED THAT THIS FACT HAS BEEN MENTIONED BY THE AO IN THE F IRST PARA 8 AT PAGE 4 OF THE PENALTY ORDER WHICH IS SELF SPEAKING AND HAS NOT BEEN DISPUTED BY THE LD. DR. 17 . UNDER ABOVE NOTE D FACTS AND CIRCUMSTANCES OF THE CASE WE ARE INCLINED TO H O LD THAT WHEN THE ASSESSEE ITSELF REVERSED ITS OVERSTATED CLAIM OF DE PRECIATION IN THE SUBSEQUENT RETURN WHEN THE MISTAKE OF OVER STATEMENT OF CLAIM OF DEPRECIATION WAS POINTED OUT BY THE C&AG REPORT VOLUNTARILY AND THE ASSESSING OFFICER RAISED QUERY SUBSEQUENT TO VOLUNTARILY REVERSE D OF THE SAID CLAIM THEN ACT OF CONSCIO US AND IT A NO. 4274 /DEL /201 3 13 MALAFIDELY FURNISHING OF INACCURATE PARTICULARS OF INCOME OR CONCEALMENT OF PARTICULARS OF INCOME CANNOT BE ATTRIBUTED TO THE ASSESSEE PUBLIC SECTOR UNDERTAKING . THEREFORE IN VIEW OF FOREGOING DISCUSSIONS WE HOLD THAT THE EXPLANATION OFFERED BY TH E ASSESSEE WAS SUSTAINABLE AND BONA FIDE AND THEREFORE PENALTY U/S 271(1)(C) OF THE ACT IS NOT IMPOSEABLE ON THE ASSESSEE. ACCORDINGLY PENALTY ORDER AS WELL AS IMPUGNED ORDER OF THE CIT(A) ARE SET ASIDE AND THE AO IS DIRECTED TO DELETE THE IMPUGNED PENAL TY LEVIED ON THE ASSESSEE U/S 271(1)(C) OF THE ACT. ACCORDINGLY THE MAIN GROUND OF THE ASSESSEE IS ALLOWED. 18 . IN THE RESULT APPEAL OF THE ASSESSEE IS ALLOWED AND THE AO IS DIRECTED TO DELETE THE PENALTY. ( TH E DECISION WAS PRONOUNCED IN THE OPEN COU RT ON 2 7 T H APRIL 201 5 . ) SD/ - SD/ - ( N.K. SAINI ) ( C.M. GARG ) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 2 7 TH APRIL 201 5 . AKS/ - COPY FORWARDED TO 1 . APPELLANT 2 . RESPONDENT 3 . CIT 4 . CIT(A) 5 . DR ASST . REGISTRAR ITAT NEW DELHI