MR. REAL TEAM SYSTEM PVT. LTD,MUMBAI vs. ITO 15 (3)(1), MUMBAI

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ITA 1389/MUM/2019Status: DisposedITAT Mumbai17 August 2022AY 2014-155 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that bonafide mistakes made by the assessee cannot be the basis for imposing a penalty under Section 271(1)(c). The penalty levied by the Assessing Officer was directed to be deleted.

What were the facts?

The assessee claimed excess depreciation due to a clerical error in applying depreciation rates, which was explained as an inadvertent mistake. The Assessing Officer levied a penalty on this excess claim.

What were the issues?

Whether a penalty under Section 271(1)(c) can be levied for an inadvertent clerical error in claiming depreciation, or if it requires deliberate concealment or furnishing of inaccurate particulars.

Which sections of the Income-tax Act were involved?

Section 271(1)(c)

AI-generated summary — verify with the full judgment below

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Income Tax Appellate Tribunal, “D” BENCH, MUMBAI

Before: SHRI AMIT SHUKLA, JM & SHRI M. BALAGANESH, AM

For Appellant: Shri Mahita Nayar, Ld, DR सुनवधईकीतधरीख/
For Respondent: Shri Mahita Nayar, Ld

O R D E R

Per Amit Shukla, Judicial Member:

1.

The aforesaid appeal has been filed by the assessee against the impugned order dated 27.12.2018, passed by Ld. CIT(A), Mumbai in relation to penalty proceedings u/s 271(1)(c) for AY 2014-15.

M/s Real Team Systems Pvt. Ltd. 2. Assessee is aggrieved by levy of penalty of Rs. 9,50,000/- in respect of disallowance of Rs. 27,08,548/- on account of excess claim of depreciation.

3.

The facts in brief are that assessee is engaged in the business of IT Enabled services and also BPO services. The return of income declaring total loss of Rs. 2,01,97,785/- was filed on 27.09.2013. The Ld. AO on going through the working of depreciation noted that assessee company had claimed depreciation on higher rates and when the same was confronted, the assessee submitted that there was an error in taking depreciation number which was purely clerical error. The relevant submission reads as under:- We would like to bring to your notice that the error for depreciation number in. the filing is result of clerical error on the part of the staff of the assessing Chartered Accountant (Letter to the effect has been given by the same). So kindly consider this an inadvertent error which is to be corrected. The error persisted because of the extreme fine-print (usage of very small size in the excel sheet records). The number quoted matches exactly with the previous year assessment year number so should be condoned as a one time error since it was not deliberate on our part.

M/s Real Team Systems Pvt. Ltd. 4. The penalty has been levied by the AO on this excess claim of depreciation at Rs. 27,08,548/- which 100% works out to Rs. 9,50,000/-.

5.

Ld. CIT(A) after discussing the law relating to penalty and various judgments without any discussion how such judgments are related to the facts has confirmed the penalty.

6.

None appeared before us on behalf of assessee despite several notices were served, therefore the matter is being decided on the basis of material available of record and the submission made by Ld. DR.

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