Case Number: ITA 1461/DEL/2020
Appellant: MDLR Airlines (P) Ltd, New Delhi
Respondent: DCIT Central Circle-14, New Delhi
Assessment Year: 2016-17
Case Filed On: 2020-08-05
Order Type: Final Tribunal Order
Date of Order: 2022-08-05
Pronounced On: 2022-08-05
This case pertains to the appeal filed by MDLR Airlines (P) Ltd against the order of the Commissioner of Income Tax (Appeals)-26, New Delhi, dated 30.01.2020, for the assessment year 2016-17. The primary issue in this appeal is the imposition of a penalty amounting to Rs. 13,47,640 under section 271(1)(c) of the Income Tax Act, 1961, by the Assessing Officer (AO).
The roots for the levy of penalty lie in the assessment order dated 21.12.2018 framed under section 143(3) of the Act. The returned loss of Rs. 7,16,78,656 was assessed at a total loss of Rs. 6,73,17,373. The returned loss was reduced by disallowing the claim of depreciation of Rs. 43,61,283, which was disallowed by the AO on the grounds of no activity being carried out during the year.
Penalty proceedings were separately initiated for filing inaccurate particulars of income, leading to the imposition of a penalty of Rs. 13,47,640 by order dated 27.06.2019 for producing inaccurate particulars of income.
The appellant, represented by Sh. Gautam Jain, Advocate, and Sh. Lalit Mohan, CA, contended that similar depreciation was claimed by the assessee since AY 2012-13 to 2015-16, and the AO had consistently disallowed the claim of depreciation. However, in none of the earlier assessment years did the AO levy a penalty under section 271(1)(c) for filing inaccurate particulars of income.
The respondent, represented by Sh. Amit Shukla, Sr. DR, argued in support of the penalty imposed by the AO and upheld by the CIT(A).
The Tribunal, comprising Sh. N. K. BILLAIYA, Accountant Member, and Sh. YOGESH KUMAR US, Judicial Member, reviewed the case records and heard the representatives of both sides at length.
Upon careful consideration, the Tribunal found that the Hon’ble Supreme Court in the case of Brahmaputra Consortium P. Ltd. (348 ITR 339) and Reliance Petro Products Private Limited (322 ITR 158) had held that an inadvertent, bona fide, genuine claim of depreciation/expenses does not call for the levy of penalty under section 271(1)(c) of the Act.
In light of the above-stated decisions and after considering the facts, the Tribunal concluded that there was no furnishing of inaccurate particulars of income by the assessee. Therefore, it was not a fit case for the levy of penalty under section 271(1)(c) of the Act. The Tribunal directed the AO to delete the penalty so levied.
The appeal of the assessee was allowed, and the order was pronounced in the open court on 05.08.2022.
Order signed by:
Date: 05.08.2022
Copy forwarded to:
Assistant Registrar, ITAT New Delhi
ITA 1461/DEL/2020: MDLR Airlines vs DCIT – Penalty Dispute for AY 2016-17
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