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2007 (3) TMI 209 - MADRAS HIGH COURTLevy of penalty u/s 271 - The Tribunal is right in law in upholding the levy of penalty - It was incumbent on the appellant to prove beyond shadow of doubt the existence of a bona fide belief that the interest u/s 244A was not taxable? - HELD THAT:- In the instant case, both the assessees were quite conscious of the receipt of the income derived by way of interest, for the delay in refunding the excess tax paid by them, by the Revenue. The assessees, having exercised such statutory right based on their statutory entitlement by virtue of section 244A of the Act, ought to have shown the same in their returns of income and consequently, the question of lack of intention or the defence of oversight does not arise. The assessees, having exercised their right under a statute, are also bound by the duty under the statute to pay tax on such income derived by way of interest by the Revenue. As observed, the source of income is only from the Revenue themselves. Therefore, the assessees are quite aware that either wittingly or unwittingly, they cannot escape from the statutory duty of payment of tax on such income. Such a failure of duty on the part of the assessees, in our considered opinion, constitutes an element of concealment, warranting levy of penalty u/s 271(1)(c) of the Act, inasmuch as the assessees who had gained the benefit under the statute cannot be permitted to state that they had no intention to suppress such gain, nor that omission of such income in the returns was by oversight, as, both legally and logically it follows that they had a knowledge of the receipt of income from the respondent. But for the pointing out by the respondent as to the said additions, while passing the assessment order u/s 143(3) of the Act for the assessment year 1996-97, the said income as well as the tax liability would have remained unearthed. Therefore, under such circumstances, we see every justification for initiating the proceedings for penalty u/s 271(1)(c) of the Act and levying penalty, based on factual and concurrent finding by the authorities below. Accordingly, we have no hesitation to answer the question against the assessees. Appeals are dismissed.
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