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2014 (9) TMI 552 - HC - Income TaxPenalty order passed u/s 13 of Interest Tax Act – Interest on Banks-Bills Re-discounting Scheme - Held that:- When two legal interpretations were plausible and there was honest and bona fide difference of opinion, penalty for concealment/furnishing of inaccurate particulars, should not and cannot be imposed - If the view taken by the assessee required consideration and was reasonably arguable, he should not be penalized for taking the position - The tax statutes are complex and there can be a bona fide difference of opinion on legal interpretation and understanding of a provision - even when the interpretation placed by the Revenue is accepted, penalty should not be imposed if the contention of the assessee was plausible and bona fide. Establishment of mens rea is not the requirement or a condition precedent to impose penalty - The question of mens rea etc. is important and relevant in the criminal proceedings but not for the purpose of civil penalty u/s 13 of the Act - The nature and character of the two proceedings is different - Presence of mental element or mens rea in most criminal proceedings is mandatory unless the legislature mandate is to the contrary but not so in the penalty proceeding under Section 13 of the Act - the Tribunal has not erred in upholding the order of the CIT(A) in deleting the penalty – relying upon National Insurance Company Limited versus Commisioner of Income Tax and Another [2011 (6) TMI 123 - CALCUTTA HIGH COURT] - Section 2(5) would override and interest earned on bill discounting with credit institutions would not be included in interest u/s 2(7) of the Act – the order of the Tribunal is upheld – Decided against revenue.
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