TMI Blog2023 (10) TMI 556X X X X Extracts X X X X X X X X Extracts X X X X ..... not amount to furnishing of inaccurate particulars regarding the income of the assessee. Here is a case where the assessee made a conscious claim and has given a bonafide explanation before AO as well as CIT (Appeals). Simply because the claim of the assessee is not sustained by the authorities, it cannot be held that the assessee has furnished inaccurate particulars of income so as to attract the penalty u/s 271(1)(c) - In the circumstances the Assessing Officer is directed to delete the penalty levied u/s 271(1)(c) - Appeals of the assessee are allowed. - Shri Challa Nagendra Prasad, Judicial Member For the Assessee : Shri Nikhil Ranjan, Adv.; And Shri Kamal Arya, Advocate; For the Department : Shri Om Parkash, Sr. D. R. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee submits that it is not a case of furnishing of inaccurate particulars or concealment of income by the assessee, but the claim was made by the assessee relying on various case laws on the subject. The Ld. Counsel submits that from a reading of the Explanation 1 to Section 271(1) of the Act that penalty under Section 271(1)(c) of the Act shall not be imposed on a person who offer a bona fide explanation and the facts relating to the same and material to the computation of his total income have been disclosed by him. In the instant case, it is undisputed that the Appellant had offered an explanation that the Appellant is claiming depreciation in certain headings, further merely because the claim of the Appellant is disallowed by Hon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on this ground alone the Impugned Order ought to be set aside. The Ld. Counsel submits that NFAC failed to appreciate that penalty has a character of penal provision and penalty cannot be imposed automatically merely because depreciation is disallowed for certain headings. The Explanation 1 to Section 271(1) of the Act ensures that for imposing penalty there should be element of mens-rea. For invoking Section 271(1)(c) of the Act there shall be specific finding stating that assessee willfully and deliberately had not disclosed particulars of income. Whereas, in the instant case this requirement had not been satisfied, the Appellant had bona fide belief that he is eligible to claim depreciation in certain headings, consequently in the instan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... instant case is covered by various case laws pronounced by the Supreme Court and Jurisdictional High Court, and therefore penalty should not be imposed. However, the NFAC had not dealt with these submissions while passing the Impugned Order. It is settled principal of law that an order should be passed after examining the contentions raised in an appeal and not otherwise. Therefore, the Impugned Order is passed without application of mind, and it is liable to be set aside on this ground itself. 4. On the other hand, the ld. DR submits that the assessee has furnished inaccurate particulars of income by making a wrong claim of depreciation on the assets. The ld. DR placed reliance on various decisions to support his contention. 5. Heard ..... X X X X Extracts X X X X X X X X Extracts X X X X
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