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2014 (10) TMI 751 - HC - Income TaxCancellation of penalty u/s 271(1)(c) - Refund of amount - Assessee contended that since he succeeded before the Tribunal against the order of assessment, by virtue of provisions of section 275(1A) of the Act, the revenue were required to delete the penalty and refund the amount of penalty – Held that:- The order of penalty was made against the assessee on the basis of the assessment of income done by the AO - since the addition of the amount in the income of the assessee for the purpose of assessment was removed by the order of the Tribunal, the penalty imposed upon the assessee u/s 271 (1)(c) of the Act was required to be cancelled by making necessary order u/s 275(1A) of the Act and the amount of penalty recovered from the assessee by adjustment was required to be refunded to the assessee - since the concerned authorities who were under obligation to pass necessary order for cancellation of penalty by giving effect to the order made in favour of the assessee since failed in passing necessary order for cancelling of penalty and for refund of the penalty amount, the assessee is justified in invoking the powers of the Court under Article 226 of the Constitution of India seeking direction to refund the amount of penalty. Claim of interest on amount to be refunded – Held that:- Section 244 of the Act provides for interest on refund where no claim is needed - Section 244 shall not apply in respect of any assessment for the AY commencing on 1st May, 1989 or any subsequent assessment orders - Section 244A of the Act would apply for interest on refunds – relying upon Sandvik Asia Ltd. Vs. Commissioner of Income Tax I, Pune and others [2006 (1) TMI 55 - SUPREME Court] - a person should only be taxed in accordance with law and hence where excess amounts of tax are collected from an assessee or any amounts are wrongfully withheld from an assessee without authority of law the revenue must compensate the assessee – revenue are directed to refund the penalty amount of ₹ 1,13,32,499.00 to the assessee within a period of two months from the date of receipt of this order with interest on such amount of penalty as per the provisions of section 244(A)(1)(b) of the Act – Decided in favour of assessee.
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