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Airports Authority of India Versus ACIT, Circle 1 (1) , New Delhi

Penalty under section 271(1)(c) - wrong claim of the depreciation in respect of fixed assets - Held that:- when the assessee itself reversed its overstated claim of depreciation in the subsequent return, when the mistake of over statement of claim of depreciation was pointed out by the C&AG report, voluntarily and the Assessing Officer raised query subsequent to voluntarily reversed of the said claim then act of conscious and malafidely furnishing of inaccurate particulars of income or concealme .....

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nd Shri C. M. Garg,JJ. For the Appellant : Sri Ved Jain Adocate And Rano Jain, CA For the Respondent : Ms. Y Kakkar, DR And Shri V. Chaurasia, CA ORDER Per Shri C. M. Garg, JM: 1. This appeal has been preferred by the assessee against the order of the Commissioner of Income Tax (Appeals)-IV, New Delhi dated 11.04.2013 in Appeal No.214/2012-13 for the AY 2008-09 by which the penalty order dated 31.01.2013 passed u/s 271(1)(c) of the Act has been confirmed, upholding the penalty of ₹ 50,98,5 .....

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under the head fixed assets for Amritsar Airport during the year under appeal and claimed depreciation thereon. The Assessing Officer noticed that the Comptroller & Auditor General C&AG has made an observation that completion certificate in respect of above amount was not produced. The AO asked the assessee to justify the claim of the depreciation on fixed assets. The assessee vides its letter dated 25.10.2010 filed the details of said amount capitalized by it during the year. The Asses .....

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essee had actual claimed depreciation of ₹ 1.5 crores in respect of the assets of ₹ 5.56 crores and he directed the AO to verify the actual depreciation claimed by the assessee in respect of above assets of ₹ 5.56 crores and directed the AO to restrict the disallowance to ₹ 1.5 crores as against ₹ 2.48 crores disallowed by the AO. Since the assessee did not prefer any appeal against the order of the CIT(A), therefore, the disallowance of ₹ 1.5 crores had attai .....

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appeal of the assessee was also dismissed by passing the impugned order and the penalty levied by the AO was confirmed. Now, the assessee is before this Tribunal with the main ground as reproduced hereinabove. 5. We have heard the arguments of both the sides carefully and perused the material placed on record. The Ld. counsel of the assessee submitted that the assessee is a public sector undertaking functioning under the Ministry of Civil Aviation, Government of India and it was formed by speci .....

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her there was a mala fide concealment of income nor assessee furnished inaccurate particulars of its income, because the assessee being a public sector undertaking is subject to C&AG audit and the report of the C&AG was the basis of the disallowance of the claim of depreciation which was also part of annual report. Ld. counsel further pointed out that the assessee filed its return of income for AY 2008- 09 on 30.09.2008 and subsequently the C&AG made certain observation about the cla .....

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iew and observation of C&AG, the assessee company reversed its claim in the return for AY 2009-10 filed on 29.09.2009 voluntarily suo moto . 6. The Ld. counsel strenuously contended that AO, first time raised the issue of C&AG report by issuing notice and questionnaire about claim of depreciation on 09.08.2010 on the basis of discloser made by the assessee in the return for AY 2009- 10, which was filed on 29.09.2009. Ld. counsel further made it is clear that the assessee revised its clai .....

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of two figures which ₹ 14.62 crores for which the assessee has filed the certificates of completion, which has not been disputed by the AO and the CIT(A) as well and on balance amount of ₹ 5.56 crores, the depreciation was reversed in the return of next assessment year i.e. 2009- 10 and this reversion was made much before the AO raised the issue. During the arguments, Ld. counsel of the assessee submitted that a copy of the return of income for AY 2009-10 which was filed on 29.09.20 .....

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ssessee to justify the claim of depreciation on fixed assets and the assessee in its reply dated 25.10.2010 filed details of ₹ 20.18 crores capitalized by it during the year. Undisputedly, the Assessing Officer has made addition of ₹ 2.48 crores on the basis of C&AG report and reversion of the claim by the assessee in its return of income for AY 2009-10. In this situation, we are declined to accept this contention of the Revenue that the assessee revised its claim only after when .....

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note that the Assessing Officer picked up this issue on the basis of reversal of claim submitted by the assessee in the return of income for the subsequent year which was undisputedly filed on 29.09.2009. 9. Under above note facts and circumstances of the case, contention of the Ld. counsel for the assessee that the assessee revised and reversed its claim in the return of subsequent year as per comments and observation of C&AG made in the 30th Annual Report 2007 voluntarily and suo moto are .....

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rganization managed and controlled by the Government of India for providing services in the field of Civil Aviation in India then it cannot be held that at deliberate intention to evade to payment of due tax. 11. Ld. counsel of the assessee also placed reliance on the plethora of judgment including the decision of Hon ble jurisdictional High Court of Delhi in the case of CIT Vs. MTNL in ITA No. 626/2011 delivered on 10.10.2011, the decision of the Hon ble Supreme Court in the case of CIT Vs Reli .....

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ted in ITD 100, 029/TTJ 107, 372, ITAT [Nagpur], the decision of ITAT Ahemdabad Bench in the case of DCIT Vs. Indian Petrochemicals Corporation Ltd. reported in 123 ITD 293 (ITAT Ahemdabad) and decision of ITAT Bombay Bench in the case of Dena Bank Vs. Inspecting Assistant Commissioner reported in 25 ITD 109 (ITAT Bombay) and submitted that it would not be an unreasonable presumption that it could not be an intention of organization owned and run by Government of India to conceal its income or t .....

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ingridment for attracting the civil liability. Ld. DR has also drawn our attention towards this fact that when the assessee did not had completion certificate in respect of in completed assets amounting to ₹ 5.56 crores then the claim of depreciation on entire amount of ₹ 20.18 crores is enact of furnishing of inaccurate particulars and also an act of concealing the true particulars of income of the assessee, therefore, penalty levied by the AO was correctly confirmed and upheld by .....

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fact that the assessee itself accepts that the fixed assets amounting to ₹ 5.56 crores were reversed in the subsequent financial year, therefore, depreciation of above assets is not admissible during the year. In this situation, the assessee being a public sector undertaking, Government of India would not furnish inaccurate particulars of its income with the conscious intention to conceal its income with the view to evade payment of proper taxes due to the Government of India. 13. As this .....

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as concealed the particulars of his income or furnished inaccurate particulars of such income". The present was not a case of concealment of the income. As regards the furnishing of inaccurate particulars, no information given in the Return was found to be incorrect or inaccurate. The words inaccurate particulars" mean that the details supplied in the Return are not accurate, not exact or correct, not according to truth or erroneous. In the absence of a finding by the AO that any detai .....

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ble in law, by itself, will not amount to furnishing inaccurate particulars regarding the income of the assessee. If the contention of the Revenue is accepted then in case of every Return where the claim made is not accepted by the AO for any reason, the assessee will invite penalty u/s 271 (1 )(c). That is clearly not the intendment of the Legislature. (iii) The law laid down in Dilip Shroff291 ITR 519 (Se) as to the meanings of the words "conceal" and "inaccurate" continues .....

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be accepted, then it would not a case of deliberate concealment with the view to evade payment of tax and putting in Revenue to loss. In this judgment their lordship speaking for Hon ble High Court of Madhya Pradesh observed as follows:- "In our opinion, the Tribunal rightly accepted the explanation offered by the Board/assessee. It was not a case of deliberate attempt on the part of the assessee to avoid payment by way of deduction for being deposited. The assessee is not a private busine .....

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it is lawful to do so. Whether penalty should be imposed for failure to perform a statutory obligation is a matter of discretion of the authority to be exercised judicially and on a consideration of all the relevant circumstances. Even if a minimum penalty is prescribed, the authority competent to impose the penalty will be justified in refusing to impose penalty when there is a technical or venial breach of the provisions of the Act or where the breach flows from a bona fide belief that the of .....

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the Revenue to loss. In view of the aforesaid discussion, while concurring with the view taken by the Tribunal, we dismiss the appeal and uphold the order of the Tribunal." 15. On the basis of foregoing discussion, we reach to a conclusion that the penalty u/s 271(1)(c) of the Act cannot be imposed a merely because it is lawful to do so but for imposing penalty it is incumbent upon the Revenue authority to so that the assessee has concealed the particular of his income or furnished inaccur .....

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tion of the total income of any person under this Act,- (A) Such person fails to offer an explanation or offers an explanation which is found by the [Assessing] Officer or the [Commissioner (Appeals)] [or the [ Principal Commissioner or] Commissioner] to be false, or (B) such person offers an explanation which he is not able to substantiate [and fails to prove that such explanation is bona fide and that all the facts relating to the same and material to the computation of his total income have b .....

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