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2011 (3) TMI 1106 - HC - Income TaxAssessment - disallowing the claim against the interest income assessed under the head ‘other sources’ - AO issued the notice under Section 143(2) - additional tax u/s 143(1)(a) levied - avoiding the tax liability - levy of interest under Section 201(1A) - Held that:- If the loss declared by an assessee had been reduced by reason of adjustments made under Sub-section (1)(a), the provisions of sub-section (1A) would apply mandatorily at the rate indicated therein and thus, there was no mistake in imposition of the additional tax. No substance in the contention of Dr. Pal that the additional penalty under sub-section (1A) bore the imprint of a penalty and no penalty could be levied because no opportunity of hearing was given to his client. The decision of the Supreme Court in the case of CIT Vs. Hindustan Electro Graphites Ltd.[2000 (3) TMI 2 - SUPREME Court] relied upon by Dr. Pal was not only explained but its correctness was also doubted by a larger Bench of the Supreme Court in the case of Assistant Commissioner of Income-tax Vs. J.K. Synthetics Ltd., 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.
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