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2015 (8) TMI 562 - HC - Income TaxAddition of tax by way of additional tax under section 143(1)(a) - assessee challenged this additional addition of tax by saying that in a settlement scheme undertaken under the Kar Vivad Samadhan Scheme, 1998, additional tax could not be levied - whether "additional tax" imposed is a tax which can be added to the amount payable as tax under the Scheme in question or it is prohibited from adding the element of "additional tax" while assessment is being made under the Scheme in question - Held that:- Keeping in view the principle of law laid down in the case of Hindustan Electro Graphites Ltd. (2000 (3) TMI 2 - SUPREME Court ) wherein held that the levy of "additional tax" bears all the characteristics of a penalty. It is held that when "additional tax" has the imprint of penalty, the Revenue cannot say that levy of "additional tax" is automatic under section 143(1)(a) of the Income-tax Act. The Supreme Court says that if "additional tax" could be levied in the manner as claimed by the Revenue, it will amount to punishing the assessee for no fault of his and this cannot be the legislative intent. Finally, it is held by the Supreme Court in the aforesaid case that "additional tax" being in the nature of penalty, it cannot be levied in the manner done and has quashed similar action taken of adding "additional tax". We have no hesitation in allowing this appeal. The order impugned passed by the learned single Bench is quashed and it is held that the imposition of "additional tax" in the facts and circumstances of the case as done is not permissible. The "additional tax" levied under the Scheme be deleted and the matter is remanded back to the Assessing Officer for proceeding to assess the matter afresh after taking note of the principle of law laid down by the Supreme Court, as indicated hereinabove, and followed by us in the aforesaid order. - Decided in favour of assessee.
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