CIT Vs. SOCIETEX

JUDGEMENT

(1.) The Revenue claims to be aggrieved by the order dated 25.3.2011 of the Income Tax Appellate Tribunal ('Tribunal', for short) whereby its appeal was dismissed. It urges that the Tribunal fell into error in holding that the penalty to the extent of Rs.10,09,948/- under Section 271(1)(c) of the Income Tax Act, 1961 ('Act', for short), was not leviable on the assessee.

(2.) The assessee is engaged inter alia in rendering consultancy services. It had, for the assessment year 1997-98, claimed depreciation in respect of the properties one at Bangalore and the other at Khan Market, New Delhi. In the first round, the matter came for the determination of the CIT (Appeals), who concluded that depreciation was allowable only to the extent of 2/3 rd claim in respect of the Bangalore property and that for the Khan Market property such deduction could not be claimed. The total amount added back for these were Rs.9,561/- and 1,71,683/-. The assessee had also made provision for taxation to the extent of Rs.23,50,000/- under the head "current liabilities" and the provision was not added back to the profit as per the profit and loss account, in the return of income. In the assessment, this too was disallowed. In the above circumstances, the Assessing Officer by separate orders initiated penalty proceedings under Section 271(1)(c) which culminated in an order of 31.1.2001. The matter was carried in appeal to the CIT (Appeals) who deleted the penalty on the ground that inaccurate particulars in terms of Section 271(1)(c) had not been furnished. The Tribunal, on appeal by the Revenue, held that no satisfaction was recorded by the Assessing Officer in the assessment proceedings that the assessee was guilty of filing inaccurate particulars of income and agreed with the CIT (Appeals) on his ground. The Tribunal also examined the levy on merits and held that no penalty was imposable in respect of the depreciation claim vis- -vis Khan Market and Bangalore properties, but held that penalty was imposable with reference to the claim for deduction of the provision for taxation.

(3.) The assessee and the revenue filed cross-appeals before this Court in ITA Nos.1332 and 1494/2006. They were disposed of by order of this Court on 29.9.2008 remitting the matter for reconsideration, to the Tribunal, on merits.