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TMI Blog2016 (11) TMI 1065X X X X Extracts X X X X X X X X Extracts X X X X ..... on account of the Accountant, Mr. Surendra Gupta and the Chartered Accountant, Mr. Snehal Uttarwar and that the Appellant had subsequently, voluntarily detected, the mistake and the same was submitted before the assessment was completed and before the AO raised any notice or objection of the erroneous claim. 3.Without prejudice the learned CIT(A) erred in levying a higher penalty of Rs. 35,00,000/-(being 135% approximately), instead of the minimum of Rs. 25,52,435/- (being 100% minimum penalty), without substantiating any reasons for such higher penalty." 2. During the course of hearing, arguments were made by Shri H.P. Mahajani, & Shri Karthik Natarajan, Authorised Representative (AR) on behalf of the Assessee and by Shri B.S. Bist, Departmental Representative (DR) on behalf of the Revenue. 3. The only issue arising in this appeal is whether levy of penalty u/s 271(1)(c) on incorrect claim of set off of unabsorbed depreciation of Rs. 75,07,162/- is justified under the law in the given facts of this case. The case of the AO is that claim of set off of unabsorbed depreciation is patently erroneous and incorrect and thus, liable for penalty. On the other hand, the case of the ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was made on the basis of the information which was already held on record of the AO in the return of this year as well as records of earlier years. The concept of human probability suggests that the assessee would not make an incorrect claim based upon an information which is already available on record and no sane person would take such a risk to invite burden of tax, interest, penalty and prosecution. Thus, all the facts and circumstances of the case suggest that it is apparently a case of bonafide mistake or human error on the part of the staff of the assessee. In his defense, he strongly relied upon the judgment of Hon'ble Supreme Court in the case of Price Waterhouse Coopers Pvt. Ltd. v. CIT 348 ITR 306 (SC). 3.3. We have gone through the orders passed by the lower authorities and submissions made by both the sides as well as judgments relied upon before us. Before we analyse the facts of this case, we shall first briefly discuss the legal position with regard to levy of penalty under such cases. It is well settled law that penalty proceeding are independent of the assessment proceedings. The parameters for determining the tax liability and for levying the penalty are quite ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee has given an explanation of there being a bonafide mistake having been committed on the part of the assessee, therefore, the only issue to be decided in this case is whether the incorrect claim made by the assessee was on account of a bonafide mistake or an inadvertent or genuine human error or not. For this purpose, we have analysed the facts of this case. With the assistance of the representatives of both the parties, it is noticed by us that assessee filed its original return within time as stipulated u/s 139(1) on 29.09.2008. In the said return, assessee made claim of set off of unabsorbed depreciation amounting to Rs. 75,07,162/- and also gave year-wise breakup of unabsorbed depreciation available to the assessee by way of a table on the bottom of computation sheet. Subsequently, notice was issued u/s 143(2) of the Act, dated 06.08.2009 wherein no queries were asked by the AO. An adjournment was taken by the assessee vide letter dated 20th August, 2009. Thereafter another notice was issued by the AO dated 13th July 2010 wherein detailed questionnaire was issued by the AO. A perusal of detailed questionnaire reveals that no question has been raised by the AO with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o for the reason that there seems to be a substance in the explanation of the assessee that an assessee shall not make misadventure of this type where the entire information is already available on the record of the AO in current year's return and easily cross verifiable with past years returns and other records. No taxpayer much less a lady taxpayer would intentionally do misadventures of such nature and magnitude, which may in turn invite unnecessary litigation involving taxes, interest, penalties and prosecution. Apart from that it is noted by us that in the case before us the assessee had voluntarily corrected its claim that too without being pointed out by the AO, as discussed in detail in earlier part of our order. Further, the assessee had submitted detailed affidavits from Mr. Surendra Gupta (Accountant of the assessee) and Mr. Snehal Uttarwar, Chartered Accountant (Consultant of the assessee). Both of the affidavits are duly sworn on oath. In these affidavits, facts have been deposed on oath and averments have been made. Relevant portion of the affidavit of Mr. Surendra Gupta is reproduced and discussed hereunder for the sake of ready reverence: ".....4. The assessee had ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the deduction of Rs. 75,07,162/- unabsorbed depreciation. 6. The Assessee obviously is not aware of the provisions of Income-tax and therefore is dependent on the preparation of the Return by the Accountant and my over-seeing function. Once the Return of income is prepared Accountant and overseen by me, she only signs it. 7. Subsequently, the case was picked up for scrutiny, and while the Accountant was studying the facts of the case, he noticed the excess claim of the said unabsorbed depreciation and brought the same also in my notice and accordingly immediately I advised the Assessee to file revised return during the course of assessment proceedings. 8. As such, the initial excess claim has resulted on account of the inadvertent mistake on the part of the Accountant as well as on my overseeing, part the same was rectified by filing reused return. There was no bonafide contention neither of me as a consultant nor of the assessee to claim excess unabsorbed depreciation. 9. Since the Assessee has voluntarily submitted the Revised Return (to rectify the inadvertent mistake in the Original Return) before the assessment was completed, the Revised Return cannot said to be inva ..... 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