Madhya Pradesh H.C : Having heard the learned counsel for the appellant and having perused the record of the case, we are of the opinion that this second appeal filed by Revenue (IT Department) under s. 260A

High Court Of Madhya Pradesh : Indore Bench

CIT vs. Skyline Auto Products (P) Ltd.

Sections 260A, 271(1)(c)

A.M. Sapre & Ashok Kumar Tiwari, JJ.

IT Appeal No. 146 of 2003

26th April, 2004

Counsel Appeared

R.L. Jain, for the Appellant

ORDER

A.M. Sapre, J. :

Having heard the learned counsel for the appellant and having perused the record of the case, we are of the opinion that this second appeal filed by Revenue (IT Department) under s. 260A of the IT Act against an order dt. 30th July, 2003 in ITA No. 22/Ind/1998 passed by Tribunal, has no merits. In other words, in our opinion, appeal does not involve any substantial question of law as is required to be made out for the purpose of entertaining the appeal under s. 260A of IT Act, 1961.

2. The only question which is involved in the appeal is whether Tribunal was justified in holding that the penalty imposed upon the assessee by the AO under s. 271(1)(c) of IT Act, 1961 was not proper ? In the opinion of the Tribunal and in our opinion rightly, it was the case of bona fide mistake rather than a deliberate mistake on the part of the assessee while calculating depreciation on the assets of the assessee. It was found that the assessee is a new businessman and he could only claim depreciation for a fraction of year and not for full year—that being first year of starting the production as claimed by the assessee. We do not find that such can be a good ground for imposition of a penalty by the taxing authorities. It has been said long back by their Lordships of the Supreme Court in Hindustan Steel vs. State of Orissa (1972) 83 ITR 26 (SC) that merely because taxing provisions provide for a power to impose penalty that does not entitle the authorities to impose a penalty for every breach howsoever venial or technical it may be. In order to impose penalty, the authorities must see the conduct and deliberate intention on the part of the assessee in concealing his true income. In our view no such case seems to have been made out. We thus concur with the view so recorded by the Tribunal and hold that this does not involve any substantial question of law. The appeal is accordingly dismissed, as being devoid of any substance.

[Citation : 271 ITR 335]

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