ACIT Vs Mahashian Di Hatti Pvt. Ltd. (ITAT Delhi)
ITAT Delhi held that bona fide error cannot be basis of imposition of penalty and hence imposition of penalty under section 270A of the Income Tax Act rightly deleted by First Appellate Authority.
Facts- The case was selected for scrutiny under CASS. During assessment proceedings the AO noticed that there was difference of Rs.1,63,21,921/-in opening written down value (WDV) in the ITR for AY 2017-18 and closing written down value for AY 2016-17. The AO confronted the same u/s 142(1) of the Act. The assessment was completed u/s 143(3) on 12/12/2019 assessing total income of Rs. 385,08,72,140/- by adding Rs. 1,63,21,921/- to the returned income of Rs.383,45,50,210/-.
AO also initiated penalty proceedings u/s 271A of the Act for underreporting in consequence of misreporting of income to the extent of Rs. 1,63,21,921/-. In penalty proceedings AO, levied a penalty of Rs. 1,13,76,592/- @ 200% of the tax payable at Rs. 56,88,296/-.
First Appellate Authority deleted the penalty. Being aggrieved, the present appeal is filed by the revenue.
Against it the Revenue is in appeal before this Tribunal.
Conclusion- Held that the difference between the assessed income and the returned income was on account of depreciation, where inadvertently the opening written down value (WDV) of the assets was taken at book value in the audited annual accounts prepared under the Companies Act instead of written down value (WDV) under the Income-tax Act by the auditors in their tax audit report u/s 44AB of the Act. Both the accounts and the said report were submitted with the return of income. First Appellate Authority in the impugned order has discussed the issue elaborately and in deleting the penalty levied u/s 270A of the Act has relied on the ratio of decision of the Hon’ble Jurisdictional High Court in the case of Prem Brothers Infrastructure LLP Vs NFAC (2022) (142 taxmann.com 38 (Delhi). Revenue has not been able to prove the case of assessee on different Thus, in the light of binding precedents we do not see any infirmity. It is well said ‘to err is human’ a bona fide error cannot be basis of imposition of penalty.
