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2017 (7) TMI 964 - HC - Income TaxLiability to pay interest tax on the interest earned - Held that:- Under clause (a) of Section 10, therefore, in case where an Assessing Officer has reason to believe that by reason of omission or failure on the part of the assessee to make a return or to disclose fully all the material facts necessary for the assessment, chargeable interest has escaped assessment or has been under-assessed or is subject to excessive relief, he may at any time serve on the assessee a notice and proceed to assess or reassess the amount chargeable to interest tax in terms of Section 7 of the Act. Clause (a) thus clearly envisages assessment or reassessment where interest chargeable to tax has escaped assessment for the reason of the omission or failure on the part of the assessee to make a return. This is precisely what has happened in the present case. The judgement of the Supreme Court in case of Standard Chartered Finance Ltd. [2016 (3) TMI 150 - SUPREME COURT ] cannot be seen as laying down the proposition that even if no assessment was on account of return not having been filed by the Assessee, Section 10 would not apply and the Assessing Officer would be precluded from assessing or reassessing the chargeable interest. As noted clause (a) of Section 10 envisages a clear situation where for the reason of omission or failure on the part of the assessee to make a return, the Assessing Officer has reason to believe that chargeable interest has escaped assessment. In such a situation, he has the authority to assess or reassess the chargeable interest. This question, therefore, does not arise and the Civil Application is therefore rejected.
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