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TMI Blog2017 (4) TMI 972X X X X Extracts X X X X X X X X Extracts X X X X ..... he assessee could furnish its return of chargeable interest before the expiry of one year from the end of the relevant assessment year or before the completion of the assessment, whichever is earlier. However, the fact remains that assessee failed to furnish return within stipulated period as prescribed under Section 7 of the Act ibid. Assessing Officer issued notice under Section 10 of the Interest-Tax Act, 1974, upon the assessee on 12.9.1995. Assessee, in response to notice as referred above, filed return of interest tax on 19.2.1996 declaring therein chargeable interest of Rs. 7,18,86,395/-. Assessing Officer passed assessment order under Section 8 (2) on 26.2.1998 determining therein chargeable interest amounting to Rs. 15,21,18,010/- and raised tax demand of Rs. 93,89,057/-. Vide rectification order under Section 17, he further demanded Rs. 1,54,162. Perusal of Annexure P-3 placed on record by the appellant suggests that the Commissioner Income Tax, Shimla, vide order dated 1.3.2000 passed under Section 19 of the Interest- Tax Act, 1974, set aside aforesaid order of assessment having been passed by the Assessing Officer under Section 8 (2) of the Interest- Tax Act, 1974, hold ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der the Interest-Tax Act, 1974 corresponding to Explanation 3 to Section 271(1)(c)." 6. It is seen that there is no such provision under the Interest-Tax Act, 1974 corresponding to Explanation 3 to 271(1)(c) of the Income-Tax Act, 1961 and as such basis adopted for imposition of penalty by revenue authority is not in accordance with provisions of Interest-Tax Act, 1974 and, accordingly, cancelled the same. 7. Appellant being aggrieved and dissatisfied with the aforesaid order having been passed by the Tribunal, preferred an appeal under Section 260-A of the Income-Tax Act, 1961 before this Court, wherein following question of law was formulated: "Whether absence of proviso in section 13 of the Interest tax Act, 1974 corresponding to explanation 3 to section 271(1)(c) of the Income-Tax Act, 1961, could render the case ineligible for penalty u/s 13 of the Interest tax Act even on the differential amount of tax sought to evaded i.e. the difference of tax sought to evaded on chargeable interest assessed by the A.O. and chargeable returned by the assessee?" 8. This Court taking note of the fact that the Tribunal only took into consideration Section 271 (1)(c) while holding that t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nalty on the grounds that the interest become chargeable to tax only after Board's inst. No. 1923 dated 14.3.1995 and hence non disclosure of such interest in assessment years prior to this date could not be termed as concealment or furnishing inaccurate particulars, even though the assessee had filed his return after the date?" 12. Ms. Vandana Kuthiala, learned counsel representing the appellant vehemently argued that impugned order dated 21.6.2011 (Annexure P-A) having been passed by the Tribunal below is not sustainable as the same is not based upon correct appreciation of evidence adduced on record by the respective parties as well as provisions of law applicable in the instant case. Ms. Kuthiala, strenuously argued that the Tribunal while holding that there is no merit in levying of penalty under Section 13 of the Interest-Tax Act, 1974, has failed to consider the fact that the interest on securities, interest on head office investment account and interest on loan to primary agriculture cooperative societies was chargeable interest under Interest-Tax Act, 1974. She further stated that Board's Instructions No. 1923 dated 14.3.1995 were clarificatory in nature and no benefit, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct remains that advance tax as referred to above, was paid by the assessee. Learned counsel representing the respondent further contended that bare perusal of order passed by the Assessing Officer clearly suggests that initially interest on securities totaling to Rs. 3.74 Crores was not subjected to tax but the same was included lateron pursuant to order passed under Section 19 of the Interest-Tax Act, 1974. Learned counsel representing the respondent strenuously argued that penalty, if any, under Section 13 of the Act could be levied against the assessee, had he concealed particulars of chargeable interest or furnished inaccurate particulars of such interest. Mr. Vishal Mohan, further contended that provisions of Section 271 (1)(c) of the Income Tax Act, 1961, could also not be made applicable in the case of assessee, which lays down presumption against the assessee, in case of non-filing of return within particular time. In this regard, he invited attention of this Court to para-10 of the impugned order, to demonstrate that provisions of Section 271(1)(c) of Income-Tax Act, 1961, which lay down presumption against assessee in non-filing of return within particular time, are not a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 271 is not included therein, as such, this Court came to conclusion that provisions contained in Section 271(1)(c) were wrongly invoked by the Assessing Officer and Commissioner Income Tax while imposing penalty under Section 13 of the Interest-Tax Act, 1974 against respondent Bank. However, the fact remains that this Court in the aforesaid appeal, while holding that provisions contained in Section 271 (1)(c) of Income- Tax Act, 1961 are not applicable to proceedings under Interest-Tax Act, 1974, categorically held that Section 13 of the Act provides for imposition of penalty in case assessee conceals particulars of chargeable interests or furnishes inaccurate particulars of such interest. After careful examination of judgment passed by this Court in ITA No. 33 of 2006, dated 28.10.2009, there can not be any dispute that penalty, if any, under Section 13 of the Interest- Tax Act, 1974 could be imposed against assessee in case Assessing Officer comes to definite conclusion that assessee concealed particulars of chargeable interest or furnished inaccurate particulars of such interest. 17. Careful perusal of impugned order having been passed clearly suggests that learned Tribunal bel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by way of penalty, in addition to any interest-tax payable by him, a sum which shall not be less than, but shall not exceed three times, the amount of interest-tax sought to be evaded by reason of the concealment of particulars of his chargeable interest or the furnishing of inaccurate particulars of such chargeable interest." 19. True it is that provisions contained in Section 13 of Interest-Tax Act, 1974 clearly suggest that penalty is leviable on the assessee where he/she has concealed its interest chargeable to tax or furnished inaccurate particulars of interest chargeable to income tax. It clearly emerges from the record that assessee had furnished return of chargeable interest for the financial year 1991- 92 relating to assessment year 1992-93. At the cost of repetition, it may be taken note at this stage that assessee had also paid advance tax of Rs. 23,50,000/-, against aforesaid income before closure of the financial year. It also emerges from the record that return was delayed on account of non-availability of return form. Averments with regard to non-availability of return form with the department at relevant time, has been nowhere disputed by the representative of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... upon the firm Messrs. S. V. Veerappan Chettiar & Co. after its dissolution." 21. Their lordships of Supreme Court in K.C. Builders v. Asstt. C.I.T. (S.C.) reported in (2004) 265 I.T.R. 562 have held as under: "Section 147 of the Act deals with income escaping assessment. Section 148 deals with issue of notice where income has escaped assessment. Section 254 deals with orders of Appellate Tribunal. Section 256 deals with statement of case to the High Court (reference). Section 271 (1)(c) reads as follows:- "Section 271. Failure to furnish returns, comply with notices, concealment of income, etc. (1) If the Assessing Officer or the Commissioner(Appeals) in the course of any proceedings under this Act, is satisfied that any person (a) .. (b) . (c) has concealed the particulars of his income or furnished inaccurate particulars of such income, he may direct that such person shall pay by way of penalty, - (i) . (ii) (iii) in the cases referred to in clause (c), in addition to any tax payable by him, a sum which shall not be less than, but which shall not exceed three times, the amount of tax sought to be evaded by reason of the concealment of particulars of his inc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (Delhi) have held as under: "14. We have heard the counsel for the parties and perused the record. It has been observed by the Supreme Court in K.C. Builders and Anr v. Assistant Commissioner of Income Tax- 2004 ITR Vol. 265 page 562, that concealment inherently carries with it the element of means ria. It is implied in the word 'concealment' that there has been a deliberate act on the part of the assessed. The meaning of word 'concealment' as found in Shorter Oxford Dictionary III Edition, Vol-I is "in law the intentional suppression of truth or fact known, to the injury or prejudice of another". Supreme Court further observed that mere omission from the return of an item of receipt does neither amount to concealment nor deliberate furnishing of inaccurate particulars of income, unless and until there is some evidence to show or some circumstances found from which it can be gathered that the omission was attributable to an intention or desire on the part of the assess to hide or conceal the income so as to avoid imposition of tax thereon. In order that a penalty under Section 271(1)(iii) may be imposed, it has to be proved that assessed has consciously made the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncurred the expenditure but the expenditures were disallowed because of difference of opinion between the assessed and the Assessing Officer. This is not a case where revised return was filed as a result of discovery of some facts by the Assessing Officer or inability of the assessed to explain the expenditure. The revised return was filed because some of the expenditure were disallowed by the CIT (A) appeal for year 1998-99 although the expenditure were not doubted. There are cases where an expenditure is disallowed by the Assessing Officer and it is allowed by the CIT (A). It is again disallowed by the ITAT and in appeal allowed by the High Court and may be disallowed by the Supreme Court. Merely because there is difference of opinion for allowing or disallowing the expenditure between the assessed and Assessing Officer, it cannot be said that assessed had intention to conceal the income. The filing of the revised return excluding some of the disallowed expenditure and claiming expenditure of Rs. 2 crores which was actually spent by the assessed in the relevant assessment year as deduction, does not amount to concealment or furnishing inaccurate particulars. The assessed had give ..... X X X X Extracts X X X X X X X X Extracts X X X X
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