Amruta Organics Pvt. Ltd vs. DCIT (ITAT Pune)

DATE: (Date of pronouncement)
DATE: April 25, 2013 (Date of publication)

Click here to download the judgement (amruta_organics_penalty_loss.pdf)

S. 271(1)(c): Consistent losses show mistake/ absence of intention to evade taxes

The assessee filed a return declaring a loss of Rs. 16 lakhs in which it had made a wrong claim of depreciation. The AO disallowed the claim and levied 100% penalty which was upheld by the CIT(A). Before the Tribunal, the assessee claimed that its’ Directors were technical persons not knowing the intricate provisions of the Act but were dependent on the advice of professionals for preparing income tax returns. It claimed that it had committed a bona fide mistake and that there was no intention to evade taxes. HELD by the Tribunal upholding the plea:

A mere mistake in making of a claim in the return of income would not ipso facto reflect concealment or furnishing of inaccurate particulars of income in terms of s. 271(1)(c). The wrong claim of depreciation cannot be said to be made with an intention to evade taxes in as much as even after the disallowance of depreciation, the resultant income of the assessee remains a loss. The assessee had been incurring losses since the year 2003 due to the market forces. Considering the entirety of circumstances, the claim on account of depreciation was a mistake, and did not invite the provisions of s. 271(1)(c).

For more on s. 271(1)(c) “mistake”/ “error” see Somany Evergreen Knits (Bom) & the cases referred to therein

One comment on “Amruta Organics Pvt. Ltd vs. DCIT (ITAT Pune)
  1. that is right way of judging issues. one cannot be very meticulous besides one cannot know everything so we go for professionals yes they goof up that does not mean you should be penalized please. good judgement

Leave a Reply

Your email address will not be published. Required fields are marked *