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2016 (2) TMI 859 - KARNATAKA HIGH COURTLevy of penalty under section 72(2) of the KVAT Act 2003 and interest under section 36 of the said Act for all the Tax periods under consideration i.e., 2006-07 to August 2012 - the grounds urged by the petitioner in the memorandum of petitions whereby it is contended that the returns filed by the assessee disclosed the deduction of input tax claimed, for all the tax periods under consideration. The returns filed by the assessee have been accepted by the department and in such circumstances, imposing the penalty on the ground that the petitioner has understated the tax liability in the returns is uncalled for. Held that:- the assessee has claimed the input tax deduction on the purchase of manure like pesticides, chemicals etc, used in the course of business declaring the same in the returns filed. As such, there is no understatement of tax liability made by the assessee, the same are disclosed in the returns to claim input tax deductions. In such circumstances, the Assessing Officer levying penalty as mandatory is not acceptable. The view of the Assessing Authority is confirmed by the appellate authority and Tribunal without appreciating the provisions of Section 72(2) of the Act. Hence, we are of the opinion that the Assessing Officer ought to have considered the objections filed by the assessee in a right perspective and would have passed a speaking order for levying penalty. Levy of interest confirmed - levy penalty set aside - Decided partly in favor of assessee.
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