, , आयकर अपीलीय अिधकरण इंदौर (cid:586)ायपीठ इंदौर IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH, INDORE BEFORE MS. SUCHITRA R. KAMBLE, JUDICIAL MEMBER AND SHRI B.M. BIYANI, ACCOUNTANT MEMBER ITA No. 509/Ind/2025 (Assessment Year: 2014-15)

ACIT Circle-1(1) M/s. Rashtriya Takniki Bhopal Shikshak Prashikshan Evam / Anunsandhan Sansthan बनाम Samiti, Vs.

Bhopal (Revenue/Appellant) (Assessee/Respondent)

PAN: AABAR2266H Assessee by Shri Ashish Porwal, Sr. DR Revenue by Shri Vinod Joshi, AR Date of Hearing 08.12.2025 Date of Pronouncement 22.12.2025 आदेश / O R D E R Per B.M. Biyani, A.M.:

Feeling aggrieved by order of first appeal dated 19.02.2025 passed by learned Commissioner of Income-tax-NFAC, Delhi [“CIT(A)”] which in turn arises out of penalty-order dated 28.02.2020 passed by learned DCIT/ACIT- 1(1), Bhopal [“AO”] u/s 271(1)(c) of Income-tax Act, 1961 [“the Act”] for assessment-year [“AY”] 2014-15, the revenue has filed this appeal on following grounds:

“1. Whether on facts and in the circumstances of the case, the CIT(A) was justified in deleting the penalty of Rs. 2,00,00,000/- imposed on the assessee for claiming of depreciation expense even on those assets whose capital cost has been reimbursed to the assessee in contravention of Explanation 10 to section 43(1), on the grounds that the assessee has accepted the disallowance towards captioned claim and disallowing expense would not alter the status of payment of tax as the assessee is exempt u/s 10(23C) of the Act and that there is no “intention” or mens rea on part of the assessee to make an incorrectclaim, grievously ignoring:

(a) That, "Intention" and/or mens rea cannot be denied since claiming expense (depreciation expense) when no expense has been incurred, in light of admitted reimbursement, is indeed quite blatant that it does notrequire knowledge ofaccounts or accounting standards and more so when the assessee has expert assistance of accountants and auditors?

(b) That, it does not require knowledge of the Act and accounting standards to avoid claiming expenses, which were not effectively incurred and if a reimbursed expense is claimed in shape of depreciation, then intention behind the same can only be treated as mala fide?

(c) That, the Ld. CIT(A) is circumventing the maxim "Lex non cogitadimpossibilia" i.e., "The law does not require the impossible", as in the instant case, it is impossible to treat the intention behind such act of claiming already reimbursed expense in shape of depreciation as bona fide since the assessee has claimed an expense which was noteffectively incurred by the assessee, and accordingly, the intention behind claiming already reimbursed expense in shape ofdepreciation can only be treated as mala fide?

2. Whether on facts and in the circumstances of the case, the order of the CIT(A) is perverse in so much so as the CIT(A) has placed reliance on the judgement of the Hon'ble Supreme Court in Hindustan Steel Ltd. V. State of Orissa [1972] 83 ITR 26 (SC) and in Price Waterhouse Coopers Pvt. Ltd. v.CIT [2012], wherein the Apex Court has held that there would be no s. 271(1)(c) penalty for a "bona fide inadvertenthuman error", completely and grievously ignoring:

(a) That, the assessee has claimed, in shape of depreciation, already reimbursed expense and this Act is deliberate notonly in light of the principle of preponderance of probabilities but also it is indeed so brazen that it does not require knowledge of accounts or accounting standards know that already reimbursed expense should not be claimed and more-so when the assessee has expert assistance of accountants and auditors?

(b) Withoutprejudice to the above,the Supreme Courtin Union ofIndia v.

Dharmendra Textile Processors (2008) 306 ITR 277 (SC) decisively rejected the quasi-criminal characterization of penalty under Section

271(1)(c) holding that "The penalty under Section 271(1)(c) is a civil liability. Willful concealment is not an essential ingredient for attracting civilliability?

3. Whether on