In an interesting case fact reported at [2019] 412 ITR 642 (Mad) the assessee gave up the claim of depreciation in respect of three payloaders vehicles acquired/received on the last day of the financial year and paid the tax to the extent of the claim forgone. The AO levied a penalty citing cases of conscious concealment of income and furnishing inaccurate particulars.
In directing AO to refund the penalty recovered in this case the High Court held that the AO appeared to be trigger happy in imposing the penalty merely because the assessee gave up the claim of depreciation to buy peace. Instead of giving peace, a long chain of litigation was thrown upon the assessee, invoking the penal provisions under section 271(1)(c) of the Act. Such casually and lightly invoked penal provisions and impositions thereof in the tax jurisprudence was never the intention of Parliament and lowers the morale of honest taxpayers. It went on to reverse the remand order of ITAT and provided relief to assessee.
The High Court sensed very categorical in further stating that the burden of proving the guilty animus on the part of the assessee is on the Revenue, like on prosecution in criminal cases and no such negative burden could be cast upon by the assessee himself.