Income Tax Act, 1961

--Penalty under section 271(1)(c)--Furnishing of inaccurate particulars of income Bona fide clerical mistake --Assessee had claimed depreciation in respect of properties, one at Bangalore and the other at Khan market and had also made provision for taxation under the head 'current liabilities' which was not added back to the profit as per P & L account. Assessing officer disallowed the above claim and initiated penalty proceedings under section 271(1)(c). According to Tribunal, penalty was not imposable in respect of depreciation claim and regarding provision for taxation it was held that provision for taxation was debited to P&L account in the first year and it was a human bona fide clerical mistake occurred while making the statement of income therefore, penalty was not imposable on assessee. Assessing officer contended that under no circumstances the assessee could have claimed provision for tax as that was not deductible under any provision of law therefore, penalty was leviable. Held : As far as the question depreciation was concerned Commissioner (Appeals) had accepted assessee's claim for depreciation to the extent of 2/3rd in respect of the Bangalore property. It was also the matter of record that the Khan Market property was let out for the first time in the latter part of the concerned assessment year i.e. in August, 1996. In these circumstances, the benefit of inadvertence or mechanical or repetitive claim being made could be given to assessee. Similarly, as far as the provision for taxation was concerned it was noticed that the assessee had made a claim for deduction of the provision for the first time in the year under appeal, thus there was no history of furnishing such inaccurate particulars by the assessee for the previous years.

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

In the Delhi High Court