2014 (2) TMI 594 - AT - Income Tax

Deletion of Penalty u/s 271(1)(c) of the Act Various additions made - Held that - The CIT(A) has given categorical findings before deleting the penalties in respect of the additions made by the AO in the assessment there was no infirmity in the order of the CIT(A) in deleting the penalties levied by the AO u/s 271(1)(c) against the additions - In so far as depreciation claim is concerned, it is a legal claim made by the assessee and even the same claim was made in the earlier years - the assessee neither concealed its income nor furnished inaccurate particulars of income and the claim is a continuous one, he deleted the penalty levied on the depreciation claim by the AO - With regard to the Proportionate swap cost on the outstanding swap contracts is concerned, the addition made only on the difference of opinion between the department and the assessee - If the AO is correct the assessee is entitled for deduction and the balance amount in the next accounting year it is clear from the order of CIT(A) that the assessee neither concealed its income nor furnished any inaccurate particulars of income Decided against Revenue.

Summary

Issues:
- Deletion of penalty under section 271(1)(c) by CIT(A) for assessment year 2001-02.

Analysis:
1. The appeal was filed by the Revenue against the order of CIT(A) for the assessment year 2001-02, challenging the deletion of a penalty of Rs. 34,32,93,628/- imposed under section 271(1)(c) of the Act. The facts of the case revealed that the additions/disallowances made by the Assessing Officer (AO) were confirmed by the CIT(A), leading to the initiation of penalty proceedings by the AO based on alleged concealment of income by the assessee.

2. The CIT(A) deleted the penalties on certain counts, including interest accrued but not due and loss on forward exchange transactions, following a previous order in the assessee's own case for the assessment year 2000-01. The Tribunal had also deleted these additions in a separate order. This indicated a consistent approach in favor of the assessee regarding these specific issues.

3. Regarding the penalty on disallowance of depreciation, the CIT(A) considered the contentions of the assessee that there was no concealment of income as the depreciation was related to lease transactions from a prior assessment year. The CIT(A) found that there was no concealment or furnishing of inaccurate particulars of income, ultimately leading to the deletion of the penalty in this regard.

4. The penalty related to the disallowance of swap cost as prepaid expenditure was also contested before the CIT(A). The CIT(A) analyzed the nature of the transactions, highlighting that the addition made by the AO was based on a difference of opinion rather than concealment of income. The CIT(A) concluded that there was no concealment or furnishing of inaccurate particulars of income, resulting in the deletion of the penalty.

5. During the appeal before the Tribunal, the Revenue accepted the deletion of penalties for certain additions, while contesting others. However, the Tribunal upheld the CIT(A)'s decision to delete the penalties, emphasizing that there was no concealment or inaccurate particulars of income in the disputed matters. The Tribunal found no infirmity in the CIT(A)'s order and dismissed the appeal of the Revenue, thereby confirming the deletion of penalties under section 271(1)(c) for the assessment year in question.

6. The comprehensive analysis of the judgment showcases the meticulous consideration of each issue by the authorities involved, leading to a detailed examination of the facts and legal aspects before arriving at the decision to delete the penalties imposed by the AO. The consistent approach in favor of the assessee, supported by legal reasoning and factual findings, resulted in the dismissal of the Revenue's appeal.