Case Law Details
PCIT Vs Taneja Developers and Infrastructure Ltd. (Delhi High Court)
Tribunal was required to consider, was: whether penalty could be imposed on the assessee only because it had made a new claim [in line with the change in its accounting policy] in its fresh return? Admittedly, [and there is no dispute about it] AS-7 permitted the assessee to make the new claim qua the aforementioned expenses, on an accrual basis, in the relevant assessment year 2007-2008. However, the assessee had, in its original return, filed for the said assessment year, i.e., 2007-2008, claimed deduction of a portion of the said expenses based on an accounting policy [i.e., a percentage of completion method] which was in vogue at that point in time.
There is also no dispute that these facts were in the knowledge of the revenue and the aforementioned expenses which were sought to be claimed, albeit on an accrual basis, constituted a fresh claim which was embedded in the fresh return filed pursuant to the proceedings carried out under Section 153A of the Act.
Therefore, to our minds, since this was not a case where the assessee had either concealed particulars of its income and/or furnished inaccurate particulars of its income which are the prerequisite for imposition of penalty, the conclusion reached by the Tribunal that the penalty imposed by the assessing officer was correctly cancelled, by the CIT (A), cannot be found fault with. Where basic facts are disclosed or where a new claim is made because of a change in accounting policy, albeit in a fresh return, and given up because the law, as declared, did not permit such a claim, in such circumstances, initiation of penalty proceedings against the assessee, in our view, is not mandated in law.
FULL TEXT OF THE JUDGMENT/ORDER OF DELHI HIGH COURT
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