K.U.M.S.NOHAR vs. I.T.O.WARD-1,HANUMANGARH

Judgment / Order 23/01/2018

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for the appellant that as per Section 271(1)(c) of the Act of 1961, where any person fails, without reasonable cause, to furnish within the period specified in sub-section (1) of Section 153 a return of his income which he is required to furnish under Section 139 in respect of any assessment year commencing on or after the 1st day of April, 1989 and until the expiry of the period aforesaid, no notice has been issued to him under clause (1) of sub-section (1) of Section 142 and the Assessing Officer or the Commissioner (Appeals) is satisfied that in respect of such assessment year such person has taxable income, then, such person shall, for the purposes of clause (c) of sub-section (1), be deemed to have concealed the particulars of his income in respect of such assessment year, notwithstanding that such person furnishes a return of income at any time after the expiry of the period aforesaid in pursuance to the notice under Section 148 and further on such concealment the assessee is liable for penalty. In (4 of 5) [ITA-122/2011] the case in hand, as per learned counsel appearing on behalf of the assessee, the explanation submitted by the assessee was a bonafide one, plausible and relating to entitlement for availability of depreciation and as such there as no concealment. It is further submitted that the assessee, being a charitable institution registered under Section 12-A of the Act of 1961, availed 100% capital expenditure, therefore, was entitled to claim depreciation on capital assets and this aspect was advanced as explanation, hence, there was no concealment. It is also brought to our notice that a Division Bench of this Court in Commissioner of Income Tax v. Krishi Upaj Mandi Samiti, reported in (2016) 388 ITR 605 (Raj.), has taken a view that the Krishi Upaj Mandi Samiti is a charitable institution registered under Section 12-A of the Act of 1961, therefore, is entitled to have depreciation as per Section 32(1) of the Act of 1961. Learned counsel appearing on behalf of the revenue does not dispute this factual aspect of the matter. From perusal of the explanation tendered by the appellant assessee it is apparent that a debatable issue was there about depreciation available to the assessee. The assessee with a bonafide belief about availability of depreciation did not file return. The stand of the assessee was ultimately vindicated in the case of Commissioner of Income Tax v. Krishi Upaj Mandi Samiti (supra). The penalty under Section 271(1)(c) of the Act of 1961 could have (5 of 5) [ITA-122/2011] been imposed only if the assessee would have intentionally concealed the income in its returns or had given incorrect details of its expenditure as well as in the returns. In the case in hand there is neither concealment of particulars of income of the assessee nor there is furnishment of inaccurate particulars of income. The assessee with a bonafide belief about allowable depreciation

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did not file the return. The explanation given by the assessee was also debatable and ultimately that debate came to be decided in favour of the assessee. As such, we are of the opinion that there was no sufficient reason to subject the assessee for a penalty under Section 271(1)(c) of the Act of 1961. The question formulated stands resolved accordingly and the appeal is allowed. The order passed by the Income Tax Appellate Tribunal dated 3.8.2009 is set aside and the order passed by the Commissioner of Income Tax is restored."

(DR. PUSHPENDRA SINGH BHATI)J. (K. S. JHAVERI)J. S.Phophaliya/-