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2016 (7) TMI 751 - BOMBAY HIGH COURT

2016 (7) TMI 751 - BOMBAY HIGH COURT - TMI - Penalty imposed u/s. 13 of the Interest Tax Act 1974 - Held that:- The ingredients/ basis for imposition of penalty are different and distinct from the ingredients in a taxing provision. Section 13 of the Interest Act provides that penalty is imposable only if the Assessing Officer is satisfied that the person has either filed inaccurate particulars or concealed the chargeable interest. In the present facts, the respondent-assessee has made a complete .....

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order dated 2nd March, 2006 passed on reassessment proceedingss, for quantum. - The claim made by the Respondent-assessee is a bona fide claim after having made a full disclosure by filing accurate particulars. Thus, no concealment. Therefore, no penalty under Section 13 of the Interest Act, can be imposed. - Decided in favour of assessee - Income Tax Appeal No. 5 of 2014 - Dated:- 4-7-2016 - M. S. Sanklecha And B. P. Colabawalla, JJ. Mr. Ashok Kotangale i/b. Ms. Padma Divakar, for the Appel .....

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and in law, the Tribunal was justified in deleting the penalty imposed by the Assessing Officer u/s. 13 of the Interest Tax Act 1974 of ₹ 2,00,66,239/without appreciating that quantum additions were confirmed by the CIT(A) and had attained finality and that the assessee knowingly made wrong deduction of interest on the ground that it is not interest within the meaning of section 2(7) of the Interest Tax Act, 1974? . 3. For the subject assessment year, the respondent-assessee filed its inte .....

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ings. 4. Thereafter, the assessment for interest tax in respect of assessment year 2000-01 was reopened under Section 10 of the Interest Act. In the reassessment proceedings, the Assessing Officer by order dated 2nd March, 2006 disallowed the deduction of interest tax, amounting to ₹ 91.21 Crores on the ground that the same is chargeable to tax under the Interest Act. 5. Being aggrieved by the order dated 2nd March, 2006, the respondentasseseee filed an appeal to the CIT(A). By an order da .....

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s High Court in CIT v/s. Bank of Madras 215 ITR 928. Further, there was a complete disclosure and no inaccurate particulars were filed. Nevertheless, the Assessing Officer imposed a penalty of ₹ 2 Crores on the respondent-assessee on account of the interest recovered from the borrowers to the extent of ₹ 91.21 Crores. This merely on the basis that the same has been confirmed in quantum proceedings. 7. In appeal, the CIT(A) by order dated 30th January, 2012 deleted the penalty. This o .....

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act concluded that the Respondent-assessee had made a complete disclosure and the exclusion of the amount of ₹ 91.21 Crores from tax was bona fide on the premise that it does not fall within the definition of interest under Section 2(7) of the Act. Thus, the Tribunal while upholding the deletion of penalty, placed reliance upon the decision of the Apex Court in CIT v/s. Reliance Petro products Pvt. Ltd., 322 ITR 158 - wherein the Court held that merely making of a claim which is not ganted .....

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