TMI Blog2016 (2) TMI 859X X X X Extracts X X X X X X X X Extracts X X X X ..... Held that:- the assessee has claimed the input tax deduction on the purchase of manure like pesticides, chemicals etc, used in the course of business declaring the same in the returns filed. As such, there is no understatement of tax liability made by the assessee, the same are disclosed in the returns to claim input tax deductions. In such circumstances, the Assessing Officer levying penalty as mandatory is not acceptable. The view of the Assessing Authority is confirmed by the appellate authority and Tribunal without appreciating the provisions of Section 72(2) of the Act. Hence, we are of the opinion that the Assessing Officer ought to have considered the objections filed by the assessee in a right perspective and would have passed a s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cing reliance on the Judgment of this Court rendered in Balanoor Plantations and Industries Limited vs. State of Karnataka reported in (2014) 70 VST 497. The Assessing Officer/prescribed authority while concluding the reassessments also levied penalty under Section 72(2) of the Act and interest under Section 36(1) of the Act. On appeal filed by the assessee, these orders were confirmed by the First Appellate Authority. On further appeal to the Tribunal, the same are confirmed. 3. Being aggrieved by the said common judgment passed by the Tribunal, as regards the levy of penalty under Section 72(2) and interest under Section 36(1) of the Act, these petitions are filed by the assessee raising the following substantial question of law: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wrongly, prima facie establishes that the assessee has understated his liability to tax. Such understatement of tax liability in the returns would definitely call for levy of penalty under Section 72(2) of the Act which is mandatory. Further, it is also contended that levying of interest under Section 36(1) of the Act is to compensate loss of revenue for the default committed by the assessee in not making the payment legally due to the department within the prescribed period. He places reliance on the following Judgment: (1) Balanoor Plantations and Industry Ltd (Writ Appeal No.6586 to 6633/2012 disposed off on 28.02.2014). 6. After perusing the grounds urged by the petitioner in the memorandum of appeal and hearing the learned couns ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... understatement of tax liability made by the assessee, the same are disclosed in the returns to claim input tax deductions. In such circumstances, the Assessing Officer levying penalty as mandatory is not acceptable. The view of the Assessing Authority is confirmed by the appellate authority and Tribunal without appreciating the provisions of Section 72(2) of the Act. Hence, we are of the opinion that the Assessing Officer ought to have considered the objections filed by the assessee in a right perspective and would have passed a speaking order for levying penalty. 7. It is well settled law that interest is levied in order to compensate for the loss occasioned to the revenue for the delayed payment of tax by the assessee. The order of the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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