TMI Blog2014 (1) TMI 1129X X X X Extracts X X X X X X X X Extracts X X X X ..... o. 2555/Del/2012 - - - Dated:- 6-12-2013 - R.P. TOLANI AND T.S. KAPOOR, JJ. For the Appellant : Ashwani Taneja. For the Respondent : D.K. Mishra. ORDER:- PER : R.P. Tolani This is assessee's appeal against order dated 22-3-2012 passed by the Commissioner of Income-tax, Karnal u/s 263(1) of the Income Tax Act, 1961, relating to A.Y. 2006-07. Following grounds are raised: "1. That having regard to facts circumstances of the case, Ld. CIT has erred in law and on facts in assuming jurisdiction u/s 263 by holding that the penalty order dated 29-05-2009 was erroneous and prejudicial to the interest of revenue. 2. That having regard to facts circumstances of the case, Ld. CIT has erred in law and on facts in assuming jurisdiction u/s 263 and passing the order under that section, setting aside the penalty proceedings to the file of Ld. AO is bad in law and against the facts and circumstances of the case. 3. That having regard to facts circumstances of the case, Ld. CIT has erred in law and on facts in assuming jurisdiction u/s 263 is not sustainable on various legal and factual grounds. 4. That the appellant craves the leave to add, a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . In the meanwhile the case of M/s Laksons Footwear P. Ltd. was also proceeded ex parte qua the department, as the Sr. DR was also not present and there was no adjournment application. It may be pertinent here to mention that vide order dated 20-11-2013 the Bench has expressed its displeasure towards the DR's of "D" Bench. After reading the file, Shri Mishra offered himself for the arguments. 2.7 The merits of the appeal will be dealt in subsequent paras. After the assessee completed the arguments Shri Mishra replied to it. However, he wanted to cite the case laws whose names or citations neither he remembered nor had the copies of the citation. He contended that they will be filed in a day or two. 2.8 It was pointed out to him that it is not fair on his part not to remember the cases, the exact citation and the proposition laid down by these judgments. It was not a fair way to argue that the case laws not remembered by him will be submitted subsequently. He was told that in this situation how the assessee's counsel will counter the case laws which are not being given, nor properly represented and cited. It will not be possible to allow him time to file list, gist and citations ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Bench which was hurrying or burying the justice but rash and contemptuous conduct of Shri Mishra which was obstructing the sacrosanct object of dispensation of justice. His contemptuous behaviour was proposed to reprimanded and fit to be visited with cost and appropriate consequential action. 2.12 In view of the foregoing facts and circumstances we find Shri Mishra's total behaviour as unfortunate, contemptuous and condemnable and deserves to be visited with appropriate action to inculcate sense of judicial discipline and awareness of responsibilities of duties and further to protect the dignity of the court, which stands offended by the contemptuous conduct of Shri D.K. Mishra. 2.13 Mr. Mishra was then reminded that his allegations are unbecoming and may be visited with costs. Mr. Mishra did not say anything in reply. 2.14 After the Bench rose and retired to the Chamber of Sr. Member for discussion of the heard cases and signing of the judicial proceedings, Shri Mishra barged into the Chamber of Sr. Member without asking permission and threatened that the Bench has insulted him and that he is going to lodge complaint. 2.15 In order to pacify, he was offered to sit and ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1 deleted the penalty, inter alia, observing as under: "17. In view of the foregoing, we are of the opinion that mere erroneous claim in the absence of any concealment or furnishing of inaccurate particulars, is no ground for levying penalty, especially when there is nothing on record to show that the explanation offered by the assessee was not bona fide or any material particular were concealed or furnished inaccurate. In these circumstances, we have no hesitation in observing that no penalty is exigible in relation to claim for deduction of excess depreciation and interest on amount borrowed for building which was incomplete. Therefore, we hold that penalty is not imposable in this case and action of authorities below in imposing/ confirming the penalty u/s 271(1)(c) of the Act is neither proper nor justified. As such, while accepting the plea of the assessee, we direct to delete the impugned penalty imposed/ confirmed." 3.1 Following the earlier claim of depreciation in A.Y. 2006-07 also, assessee claimed the same rate which was disallowed by assessing officer. The assessing officer disallowed the same following A.Y. 2005-06 and initiated the penalty proceedings in AY 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (a) The preceding year's assessment had become final about the claim of depreciation; (b) The action of assessing officer was not in consonance with Hon'ble Supreme Court judgment in Union of India v. Dharmendra Textile Processors others 306 ITR 277; (c) Ratio of decision of Hon'ble Supreme Court in the case of CIT v. Reliance Petro Products (P) Ltd. 230 CTR 320 was not applicable. (d) Cryptic one line order passed by assessing officer dropping the penalty proceedings u/s 271(1)(c) was not sustainable. (iv) Penalty is to be considered on peculiar facts and circumstances of each case and each year. It is evident that in this case the bona fide belief sustained by assessee in first year was continued in second year. Therefore, as far as second year was concerned the assessee had a bona fide belief of following earlier practice. (v) Merely because penalty proceedings in particular facts of case was imposed in preceding year will not suggest that automatically the penalty will be levied in succeeding year as the penalty is not automatic and depends upon the facts and satisfaction of the assessing officer in that year. ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o be bona fide. It is not binding on him to necessarily follow the preceding year's penalty order in peculiar facts of the case in second year. In the second year the said goods merged in the block of assets and assessee under bona fide belief claimed the same rate of depreciation @ 40%. 4.2 In the case of Toyta Motor Corporation (supra), relied on by the CIT, the assessing officer passed a cryptic order without carrying out necessary investigation and ITAT from its own side gave a finding that assessee was under bona fide and reasonable belief. In these particular facts it was held that the order was erroneous and prejudicial. The facts are distinguishable as in this case the assessing officer carried out inquiries by calling explanation and dropped the penalty proceedings after considering the reply of the assessee. 4.3 Assessing officer's order dropping the penalty proceedings is a possible, plausible and reasonable view, merely because CIT holds another view on the same facts, cannot make Assessing officer's order as erroneous and prejudicial as held by Hon'ble Supreme Court in Malabar Industrial Co. 243 ITR 83. 5. Ld. CIT (DR) supported the order of the CIT and contends ..... X X X X Extracts X X X X X X X X Extracts X X X X
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