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2019 (8) TMI 343 - ITAT DELHIPenalty u/s 271(1)(c) - disallowance of carry forward and set-off of brought forward losses by holding that there is no provision under the Income Tax Act as per which the loss at the time of splitting the society can be carried forward to the newly formed society - disallowance of excess depreciation( full rates) had been claimed in case of assets put to use for less than 180 days during the year - defective notice - HELD THAT:- The assessee explained that claim of set-off of brought forward losses pertaining to earlier year of parent company were claimed as per the legal advice and that when assessee realized it is a mistake that depreciation is allowable only to the extent of 50% for use of the assets for half of the year then assessee surrendered the amount for taxation, therefore, in such circumstances, it cannot be believed that the assessee-society has concealed the particulars of income or furnished inaccurate particulars of income. The assessee-society bonafidely made a claim of set-off of the brought forward losses and excessive depreciation because of the legal advice. Therefore, the circumstances explained clearly show that penalty need not be imposed in the facts and circumstances of the case. Further, AO in the penalty proceedings noted that notice dated 28th November, 2008 was issued to the assessee before levy of the penalty, in which the AO has mentioned as under : (iii) “have concealed the particulars of your income or _______furnished inaccurate particulars of such income.” AO in this notice was thus not sure or definite whether assessee has concealed the particulars of income or furnished inaccurate particulars of income. Therefore, on such issue, no penalty is leviable against the assessee-society. The show cause notice issued before levy of the penalty is invalid because it did not contain under which limb of Section 271(1)(c), penalty was to be imposed against the assessee-society. Therefore, penalty proceedings itself are vitiated. - Decided in favour of assessee.
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