Somany Evergreen Knits Ltd. v. Dy. CIT

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The Tax Publishers2013 TaxPub(DT) 1792 (Mum-Trib) : (2013) 052 (II) ITCL 0222 Income Tax Act, 1961 --Penalty under section 271(1)(c)--Furnishing of inaccurate particulars of income Disallowance of claim made by assessee--Assessee instead of reducing sale value of the assets sold from the block of assets claimed excess depreciation on assets sold during the previous year. Assessee accepted the mistake and agreed to the addition of excess claim of depreciation. However, assessing officer imposed penalty on assessee for furnishing inaccurate particulars under section 271(1)(c). On appeal Commissioner (Appeals) confirmed the order of assessing officer observing that assessee did not revise the return of income and accepted the additions made only when assessing officer discovered the same in the course of assessment proceedings. Held : Commissioner (Appeals) was not justified as non-furnishing of the revised return does not mean that the bona fide mistake in making a wrong claim should be visited with imposition of penalty. The claim for deduction made by assessee was a bona fide mistake as there was enough evidence available in the documents filed along with the return of income to show that the claim made by assessee was not in accordance with law. Also the Chartered Accountant of the assessee did not advise the assessee as to the correct legal position and the return of income was filed, therefore, penalty was deleted. Income Tax Act, 1961, Section 271(1)(c) In the ITAT, Mumbai E Bench N.V. Vasudevan, J.M. & R. K. Panda, A.M. Somany Evergreen Knits Ltd. v. Dy. CIT ITA No. 1783/Mum/2009 A.Y. 2003-04 22 September, 2010 Decision: In assessees favour. Appellant by : Vishwas v. Mahendale Respondent by : P. N. Devadasan ORDER SUBSCRIBE FOR FULL CONTENT

The Tax Publishers2013 TaxPub(DT) 1792 (Mum-Trib) : (2013) 052 (II) ITCL 0222

Income Tax Act, 1961

--Penalty under section 271(1)(c)--Furnishing of inaccurate particulars of income Disallowance of claim made by assessee--Assessee instead of reducing sale value of the assets sold from the block of assets claimed excess depreciation on assets sold during the previous year. Assessee accepted the mistake and agreed to the addition of excess claim of depreciation. However, assessing officer imposed penalty on assessee for furnishing inaccurate particulars under section 271(1)(c). On appeal Commissioner (Appeals) confirmed the order of assessing officer observing that assessee did not revise the return of income and accepted the additions made only when assessing officer discovered the same in the course of assessment proceedings. Held : Commissioner (Appeals) was not justified as non-furnishing of the revised return does not mean that the bona fide mistake in making a wrong claim should be visited with imposition of penalty. The claim for deduction made by assessee was a bona fide mistake as there was enough evidence available in the documents filed along with the return of income to show that the claim made by assessee was not in accordance with law. Also the Chartered Accountant of the assessee did not advise the assessee as to the correct legal position and the return of income was filed, therefore, penalty was deleted.

Income Tax Act, 1961, Section 271(1)(c)

In the ITAT, Mumbai E Bench

N.V. Vasudevan, J.M. & R. K. Panda, A.M.

Somany Evergreen Knits Ltd. v. Dy. CIT

ITA No. 1783/Mum/2009

A.Y. 2003-04

22 September, 2010

Decision: In assessees favour.

Appellant by : Vishwas v. Mahendale

Respondent by : P. N. Devadasan

ORDER