Gujarat High Court grants relief to Axis Bank for voluntary surrendering excess depreciation claim

Gujarat High Court grants relief to Axis Bank for voluntary surrendering excess depreciation claim

The Judges cited the ruling of the Supreme Court in an earlier case

The Gujarat High Court has upheld the order of the Income Tax Appellate Tribunal (ITAT) and provided relief to Axis Bank Ltd, maintain that it did not warrant the imposition of a penalty under Section 271(1)(c) of the Income Tax Act.

The Division Bench of Justice Vipul M Pancholi and Justice Devan M Desai stated that the addition on account of excess depreciation claimed, was voluntarily surrendered by the respondent bank without the revenue department’s detection and demonstrated to be made for bonafide reasons.

The Principal Commissioner of Income Tax, Ahmedabad, raised a substantial question of law regarding the deletion of a penalty of Rs.2,30,45,220 levied under the IT Act by ITAT. It argued that the Commissioner of Income Tax (Appeals) had already observed that the respondent filed inaccurate particulars of income, making them liable for a penalty. It contended that ITAT allowed the appeal of the respondent without acknowledging the alleged inaccurate particulars of income filed in the Income Tax Return (ITR).

The Judges referred to the ruling of the Supreme Court in the CIT(A) Ahmedabad vs Reliance Petroproducts case, wherein it was held that for Section 271(1)(c) to be applicable, specific conditions must be met. It included concealment of particulars of income or furnishing inaccurate particulars of income.

But in the present case, it was observed that the appellant failed to establish either of these conditions. The Court said that the ITAT's decision highlighted that the addition made on account of excess depreciation claimed was voluntarily surrendered by the respondent assessee, without prior detection by the revenue department. Additionally, the respondent had disclosed all particulars related to the excess claim in alignment with the MCA notification.

Thus, while dismissing the appeal, the bench stated that no question of law arose for the Court's consideration.