Madras High Court
Commissioner Of Income-Tax vs M/S.Sri Saradha Textile Processors P ... on 10 November, 2005
Bench: P.D.Dinakaran, T.V.Masilamani
IN THE HIGH COURT OF JUDICATURE AT MADRAS
Dated: 10/11/2005
Coram
The Hon'ble Mr.Justice P.D.DINAKARAN
and
The Hon'ble Mr.Justice T.V.MASILAMANI
T.C.(A) No.1204 of 2005
and T.C.(A) No. 1205 of 2005
Commissioner of Income-Tax,
Coimbatore ... Appellant in both the appeals
-VS-
M/s.Sri Saradha textile Processors P Ltd.,
Bhavani ... Respondent in both the appeals
The above T.C.(Appeals) are preferred under Section 260A of the
Income-Tax Act, 1961 against the order of the Income Tax Appellate Tribunal,
Chennai 'D' Bench, dated 15.5.2002 made in ITA No.307/94, CO.No.2 8/94
respectively.
!For Appellant : Mr.N.Muralikumaran
^For Respondent : ---
:J U D G M E N T
(Judgment of the Court was made by P.D.DINAKARAN, J.) The above tax case appeals are directed against the order of the Income-tax Appellate Tribunal dated 15.5.2002 made in ITA.No.307/94, CO.No.28/94 respectively.
2. The Revenue is the appellant. The assessment year involved in the present appeals is 1990-1991.
3. The short facts of the case are that the assessee Company, for the assessment year 1990-91, had claimed depreciation and investment allowance on the machinery, which was received on 4.4.1990, i.e, after the previous year ended on 31.3.1990. When this was pointed out by the assessing officer, the assessee withdrew the claims. But the assessing Officer by the assessment order dated 18.2.1992, levied penalty under section 271(1)(c) for falsely claiming depreciation and allowances with an intention to evade taxes. Aggrieved by the imposition of penalty, the assessee preferred appeals before the Commissioner of Income Tax (Appeals), who had deleted the levy of penalty by his order dated 30.11.1993. The revenue, not satisfied with the reversal of the assessment order, approached the Tribunal. The Tribunal by its order dated 15.5.2002 dismissed the appeal holding that the fact that the assessee had filed revised returns withdrawing the claim, when it was pointed out, shows their bona fides and no penalty was leviable. It is against this order, the revenue preferred the present appeals raising the following substantial questions of law,
1. Whether in the facts and circumstances of the case, the Tribunal had enough material to hold that the claim for depreciation and investment allowance on machinery was due to the bona fide mistake ?
2. Whether in the facts and circumstances of the case, the Tribunal was right in quashing the penalty under section 271(1)(c) for the assessment year in question ?
4. Though two questions have been framed, the learned counsel appearing for the revenue submits that both the questions go together.
5. While considering a similar question, of course under Wealth Tax Act, the Gujarat High Court in the decision Commissioner of Wealthtax Vs. Hasmukhlal Gandalal (264 ITR 42), held that the penalty can be imposed only when the Revenue comes to the conclusion that the assessee had a mala fide intention and that as to whether the assessee had mala fide intention, is a question of fact. That is the case, where the concurrent findings of the authorities below were challenged before the High Court and the High Court held as under, "The Deputy Commissioner (Appeals) had come to a conclusion that the assessee had no intention to furnish inaccurate particulars and the said finding had been confirmed by the Tribunal. Therefore, it could not be presumed that the assessee had a mala fide intention to furnish inaccurate particulars. Since the assessee had revealed the correct valuation of the property before the assessment proceedings had been completed, it could not be said that the assessee had furnished inaccurate particulars of the property."
6. In the present case also the authorities below have concurrently held that when the mistake was pointed out, the assessee had withdrawn his claim for depreciation and investment allowance on the machinery and filed a revised return and this action of the assessee shows their bona fides. It is also not the case of the revenue that the assessee had the mala fide intention of furnishing inaccurate particulars with a view to falsely claiming depreciation and allowances to evade taxes. The above finding of the Tribunal was based on the facts, with which we are not inclined to interfere.
7. In this view of the matter, we answer the questions in the affirmative against the revenue and in favour of the assessee, holding that the Tribunal had enough materials to hold that the claim for depreciation and investment allowance on machinery was only due to the bona fide mistake and that the Tribunal was right in quashing the penalty under section 271(1)(c) of the Income Tax Act. Accordingly, the appeals are dismissed. No costs.
Index : Yes Website: Yes vr To The Commissioner of Income Tax, Coimbatore.