TMI Blog2011 (3) TMI 1106X X X X Extracts X X X X X X X X Extracts X X X X ..... , reported [2001 (2) TMI 17 - SUPREME Court]. Dr. Pal's further contention that the levy of interest under Section 201 (1A) which has been imposed in the intimation issued under Section 143(1)(a) should be set aside has no justification in the aforesaid contention as the said provision is also mandatory when all the conditions mentioned therein is fulfilled. - I.T.A. No.398 of 2004 - - - Dated:- 25-3-2011 - Mr. Justice Bhaskar Bhattacharya, Justice Sambuddha Chakrabarti, JJ. For the Appellant: Dr. Debi Prasad Pal, Ms. Monisha Seal, Mr. Malay Dhar, Mr. A. Mazumdar. For the Respondent: Md. Nizamuddin. Bhaskar Bhattacharya, J.: This appeal under Section 260A of the Income-tax Act is at the instance of an assessee and is directed against a consolidated order passed by the Incometax Appellate Tribunal, C Bench, Calcutta, in ITA No.25 (Kol) of 2002 dated 20th February, 2004 for the assessment year 1997-98. Although strictly speaking, two separate appeals ought to have been filed by the assessee, on an undertaking by Dr. Pal, the learned counsel appearing on behalf of the appellant, that his client will pay additional court-fees for two appeals, we have ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the said intimation and in not setting aside the order of the Commissioner of Income tax (Appeals) in regard to the above issue? The facts giving rise to filing of these appeals may be summed up thus: a) In the first appeal, the assessee has come against order made under Section 143(1) (a) of the Income-tax Act and the other appeal relates to the assessment under Section 143(3) of the Act. Both the appeals relate to the assessment year 1997-98. b) The assessee filed its return of income on 28th November, 1997 for the assessment year 1997-98 along with tax audit report and audited statement of account. In computation of total income filed along with the return of income, the assessee offered for taxation income under the heads business, capital gains and other sources separately to arrive at the total income as required. c) In the books of account, the assessee debited total interest of Rs.6,08,19,588/-. A part of the aforesaid amount being a sum of Rs.1,46,37,744/- related to money lent, which had fetched the interest income of Rs.1,50,90,457/- and the same was offered for taxation under the head income from other sources. In order to charge expenses against the par ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mpleted the assessment under Section 143(3) of the Act vide his order dated 20th February, 2000. g) In the appeal preferred by the assessee before the Commissioner of Income-tax (Appeal) against intimation order dated 30th June, 1998, the case of the assessee was that the Assessing Officer was not correct in disallowing the claim of deduction of interest paid on money borrowed for the purpose of granting loans and advances which had fetched the interest income and offered for taxation under the head other sources on the facts of the case. The other ground was in respect of the imposition of additional tax under Section 143(1A) of the Act and the levy of interest under Section 201(1A) of the Act. h) The Commissioner of Income-tax (Appeal), however, did not accept the assessee s contention and remanded the matter to the Assessing Officer and directed him to compute the total income under Section 143(1) (a) of the Act once again and to enhance the amount of additional tax under Section 143(1A) on the basis of revised computation of income filed by the assessee on 18th February, 2000. i) As regards the levy of interest amounting to Rs.3,90,599/- under Section 201(1A), the Com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt of penalty and according to him no such imposition of additional tax under Section 143(1A) could be levied without giving the assessee an opportunity of being heard and without coming to a finding that there was any deliberate intention or mens rea in avoiding the tax liability. In order to appreciate the aforesaid question the provision contained in Section 143(1A) of the Act as it stood at the relevant time is quoted below: (1A)(a) Where as a result of the adjustments made under the first proviso to clause (a) of sub-section (1) i) the income declared by any person in the return is increased; or ii) the loss declared by such person in the return is reduced or is converted into income, the Assessing Officer shall, - A) in a case where the increase in income under sub-clause (i) of this clause has increased the total income of such person, further increase the amount of tax payable under sub-section (1) by an additional income tax calculated at the rate of twenty per cent on the difference between the tax on the total income so increased and the tax that would hae been chargeable had such total income been reduced by the amount of adjustments and specify the addit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... etics Ltd., reported in 251 ITR 200. The following observations of the Apex Court in the case of J. K. Synthetics Ltd would make the position clear: Learned counsel for the assessee, however, relied upon the judgment of a Bench of two learned Judges of this Court in CIT v. Hindustan Elector Graphites Ltd. This was a case in which the return that the assessee had filed was correct by reason of the law as it stood when the return was filed. A retrospective amendment of Section 28 of the Act rendered that return incorrect. An adjustment in the return was made under sub-section (1) of Section 143 and, therefore, the provisions of sub-section (1-A) were sought to be invoked. This was challenged and the High Court upheld the challenge, as did this Court. It took the view that the additional penalty under sub-section (1-A) bore the imprint of a penalty and no penalty could be levied because the return filed by the assessee was correct when it was filed. This judgment has no application to the facts of the present case for the reason that it is nobody s case that a retrospective amendment has rendered a correct return filed by the assessee incorrect. The question here is only wheth ..... X X X X Extracts X X X X X X X X Extracts X X X X
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