THE BUREAUS UNIQUE CO-OP GROUP HOUSING SOCIETY LTD.,PANCHKULA vs. ITO, W-5, PANCHKULA

आदेश/Order

Per Sanjay Garg, Judicial Member:

The present appeal has been preferred by the assessee, which is a Cooperative Group Housing Society, against the order dated 22.12.2018 of the Commissioner of Income Tax (Appeals)-3, Ludhiana [hereinafter referred to as ‘CIT(A)’] agitating confirmation of levy of penalty by the Assessing Officer u/s 271 (1)(c) of the Act.

ITA No. 176/Chd/2019- The Bureaus Unique Co-op Group Housing Society ltd, Panchkula 2 assessee was allotted 8500 sq. meters of land by the HUDA. The cost

of the land was contributed by the 95 members of the assessee

society. Thereafter five storey building was constructed and flats

were accordingly allotted to the members of the society. In the return

of income for assessment year under consideration, the assessee

society claimed depreciation on the building considering itself as the

owner of the building. The Assessing Officer, however, rejected the

claim of the assessee society observing that neither the assessee

owned the flats nor it was doing any business or profession and even

it had not incurred any capital expenditure on the same. The

Assessing Officer, therefore, held that the assessee was not entitled

to any depreciation on the building and accordingly disallowed the

same. The Assessing Officer also initiated penalty proceedings u/s

271 (1)(c) of the Act and imposed the impugned penalty which has

been duly confirmed by the CIT(A). The assessee, thus, has come in

appeal agitating the aforesaid levy of penalty u/s 271 (1)(c) of the

Act.

Representatives of both the parties and have gone through the record.

The Ld. Counsel for the assessee has submitted that the assessee

society under the bonafide belief and as advised by its Accountant,

claimed depreciation on building. There was no intention on the part

ITA No. 176/Chd/2019- The Bureaus Unique Co-op Group Housing Society ltd, Panchkula 3 of the assessee society to furnish inaccurate particulars of income or

to conceal its income. Even there was no attempt on the part of the

assessee to evade tax. That the assessee society was duly audited by

the Sub Inspector Audit, Cooperative Societies. The depreciation

claimed on the building was under bonafide belief and on the advise

of consultant accountant of the assessee society. That the assessee

society is not doing any business and there is no other source of

income except the contribution received from the members of the

society. Though the claim of depreciation has resulted into the claim

of losses but there are was no intention on the part of the assessee

society to set off these losses against any other income as the

assessee society is not in any activity of generation of income. That

subsequent to the denial of depreciation to the assessee society, the

assessee society in the subsequent years has revised entries relating

to the claim of depreciation. Even after reversing the entries in the

subsequent years, there is no taxable income of the assessee society.

That the assessee society should not be penalized for its bonafide

mistake.

lower authorities.

case and after considering the above submissions of the counsel for

ITA No. 176/Chd/2019- The Bureaus Unique Co-op Group Housing Society ltd, Panchkula 4 assessee, we are of the view, that in this case though the assessee

society mistakenly and, as suggested by its Consultant Accountant,

made a claim of depreciation on building which, in our view, was a

boanfide claim. There seems no attempt on the part of the assessee to

furnish inaccurate particulars of income or to conceal its income or

evade payment of income tax. In view of this, we do not find it a fit

case for levy of penalty u/s 271 (1)(c) of the Act.

The penalty levied by the lower authorities is accordingly

ordered to be deleted.

In the result, the appeal of the assessee is hereby allowed.

Order dictated and pronounced in the Open Court immediately

on completion of hearing.

Sd/- Sd/-

(अ�नपूणा� गु�ता / ANNAPURNA GUPTA) (संजय गग� / SANJAY GARG) लेखा सद�य/ Accountant Member �या�यक सद�य/ Judicial Member Dated : 30.10.2019 “आर.के.”

आदेश क� ��त�ल�प अ�े�षत/ Copy of the order forwarded to : 1. अपीलाथ�/ The Appellant 2. ��यथ�/ The Respondent 3. आयकर आयु�त/ CIT 4. आयकर आयु�त (अपील)/ The CIT(A) 5. �वभागीय ��त�न�ध, आयकर अपील�य आ�धकरण, च�डीगढ़/ DR, ITAT, CHANDIGARH 6. गाड� फाईल/ Guard File

ITA No. 176/Chd/2019- The Bureaus Unique Co-op Group Housing Society ltd, Panchkula

5 आदेशानुसार/ By order, सहायक पंजीकार/ Assistant Registrar