TMI Blog2017 (4) TMI 972X X X X Extracts X X X X X X X X Extracts X X X X ..... e also, penalty order dated 28.5.2010 passed under Section 13 of the Interest-Tax Act, 1974, nowhere suggests that appellant was able to prove on record that assessee concealed particulars of interest or furnished inaccurate particulars of interest, rather, careful examination of material available on record clearly suggests that assessee had furnished complete particulars of its income in the profit and loss account and as such, there is no illegality or infirmity in the order passed by learned Tribunal below, whereby it has held that there is no merit in holding assessee liable to pay penalty under Section 13 of the Interest-Tax Act, 1974. Thus, this Court sees no illegality or infirmity in the order passed by learned Tribunal below, whereby it has deleted penalty on the ground that interest became chargeable to tax only after Board’s instructions No. 1923 dated 14.3.1995, because, admittedly, interest on securities and interest on head office investment account was made chargeable pursuant to Board’s instructions, which could certainly be not made applicable to the assessment made for the period October, 1991 to 31.3.1992.- Decide against the appellant/ revenue. - ITA No. 14 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e. 3. Being aggrieved and dissatisfied with the aforesaid order, Assessee preferred an appeal before Commissioner Income Tax (Appeals), Shimla: Panchkula, which came to be registered as Appeal No. IT/4/97-98/SML. However, the same was dismissed as infructuous, by the Commissioner Income Tax (Appeals), vide order dated 2.8.2000, on the ground that Commissioner Income Tax, Shimla has already set aside assessment directing the Assessing Officer to complete fresh assessment, points of objection as raised in the appeal, no longer survive. It further emerges from the record that the assessee Bank did not contest the chargeable interest assessed by the Assessing Officer. Perusal of Annexure P-6 suggests that during the pendency of the aforesaid assessment proceedings, proceedings under Section 13 of the Interest-Tax Act, 1974, were also initiated by the Department for levying penalty upon the assessee Bank and, accordingly, vide order dated 29.8.2002, penalty of ₹ 1,49,67,486/- i.e. penalty equal to three times the interest sought to be evaded, was imposed by the Dy. Commissioner of Income Tax, Circle Shimla. 4. Being aggrieved with the penalty having been imposed by the Asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed matter to the Assessing Officer to determine the question as to whether assessee was liable to pay penalty and if so, to what extent, strictly in consonance with the provisions of Section 13 of the Interest-Tax Act, 1974, totally being uninfluenced by the provisions of Section 271(1)(c) of the Income- Tax Act, 1961. 9. Subsequent to passing of aforesaid order by this Court, Assessing Officer passed fresh penalty order (Annexure P-9 dated 28.5.2010) under Section 13 of the Interest-Tax Act, 1974, levying therein 100% penalty of the amount of ₹ 49,89,162, i.e. tax sought to be evaded. 10. Assessee being aggrieved with the aforesaid imposition of penalty vide order dated 28.5.2010, preferred an appeal before Commissioner Income Tax (Appeals), who vide order dated 30.11.2010 in Appeal No. IT/119/2010-11/Sml, dismissed the appeal of the assessee and as such assessee was compelled to prefer an appeal before the Tribunal below. Learned Tribunal below, while allowing appeal of the assessee held that penalty under Section 13 of the Interest-Tax Act, 1974 is/was leviable, where assessee had concealed its interest chargeable to tax or furnished inaccurate particulars of tax cha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the notice under Section 10 of the Interest-Tax Act, 1974. Learned counsel representing the appellant forcefully contended that the learned Tribunal below failed to take note of the fact that return of chargeable interest was not filed voluntarily but was filed in response to notice under Section 10 of the Interest-Tax Act, 1974 and there was difference in the chargeable interest of the assessee and interest as assessed by the Assessing Officer. To substantiate her aforesaid arguments, learned counsel representing the appellant invited attention of this Court to assessment order (Annexure P-9) having been passed by the Assessing Officer under Section 13 of the Interest-Tax Act, 1974, to demonstrate that the assessee had concealed interest chargeable to tax and had furnished inaccurate particulars to the tune of ₹ 16,63,05,388/- and as such penalty was rightly imposed upon the assessee at the rate of 100% of the interest sought to be evaded. 13. Mr. Vishal Mohan, learned counsel representing the respondent, supported the impugned order passed by the learned Tribunal and stated that there is no illegality or infirmity in the same, as such, there is no scope of interference. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nded that there is nothing on record suggestive of the fact that assessee concealed particulars of interest or furnished inaccurate particulars of interests, rather record clearly suggests that assessee had declared total interest received by it in its profit and loss account. Learned counsel representing the respondent further contended that assessee had furnished return of chargeable interest for the financial year 1991-92 relating to assessment year 1992-93 and had declared chargeable interest of ₹ 7.18 Crores. In the aforesaid background, he prayed for dismissal of the appeal. 14. We have heard the learned counsel representing the parties and gone through the record. 15. While exploring answer to the questions of law reproduced herein above, as well as submissions made by the learned counsel representing the parties, this Court had an occasion to peruse material adduced on record by the appellantdepartment as well as impugned order having been passed by the learned Tribunal below, perusal whereof certainly suggest that there is no dispute, if any, with regard to chargeable interest assessed by the Assessing Officer, which was determined by Assessing Officer on 5.2.2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion of penalty under Section 13 of the Interest-Tax Act, 1974, against the respondent. Paras 16 and 17 of the impugned order passed by learned Tribunal below clearly suggest that before passing impugned order, it carefully examined/ analyzed order passed by Assessing Officer imposing therein penalty under Section 13 of the Interest-Tax Act, 1974. It clearly emerges from the impugned order, which is admittedly based upon record of the appellant that assessee had furnished return of chargeable interest for the financial year 1991-92 relating to assessment year 1992-93 and declared chargeable interest at ₹ 7.18 Crores, which was accepted in its entirety. It is also not disputed that assessee had paid advance tax of ₹ 23,50,000/- against aforesaid income before closure of financial year i.e. ₹ 1,10,000/- on 7.2.1992 and ₹ 12,50,000/- on 16.3.1992. Similarly, there is no dispute that return of chargeable interest as referred above was not filed within stipulated time by assessee, rather same was filed pursuant to issuance of notice of re-assessment issued by Assessing Officer under Section 10 of the Interest-Tax Act, 1974. Similarly, it clearly emerges from reco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 20. Their lordships of the Supreme Court in Commr. of Inc.-Tax v. Angidi Chettiar reported in (1962) 44 I.T.R. 739 have held as under: The penalty provisions under section 28 would therefore in the event of the default contemplated by clause (a), (b) or (c) be applicable in the course of assessment of a registered firm. If a registered firm is exposed to liability of paying penalty, by committing any of the defaults contemplated by clause (a), (b) or (c) by virtue of section 44, notwithstanding the dissolution of the firm the assessment proceedings are liable to be continued against the registered firm, as if it has not been dissolved. Counsel contended that in any event, penalty for the assessment year 1949-50 could not be imposed upon the assessee firm because there was no evidence that the Income-Tax Officer was satisfied in the court of any assessment proceedings under the Income-Tax Act that the firm had concealed the particulars of its income or had deliberately furnished inaccurate particulars of the income. The power to impose penalty under section 28 depends upon the satisfaction of the Income- Tax Officer in the course of proceedings under the Act; it cann ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... curate particulars of such income. One of the amendments made to the abovementioned provisions is the omission of the word deliberately from the expression deliberately furnished inaccurate particulars of such income . It is implicit in the word concealed that there has been a deliberate act on the part of the assessee. The meaning of the word concealment as found in Shorter Oxford English Dictionary, 3rd Edition, Volume I, is as follows:- In law, the intentional suppression of truth or fact known, to the injury or prejudice of another. The word concealment inherently carried with it the element of mens rea. Therefore, the mere fact that some figure or some particulars have been disclosed by itself, even if takes out the case from the purview of non-disclosure, it cannot by itself take out the case from the purview of furnishing inaccurate particulars. 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... furnished inaccurate particulars of his income. 15. It is clear from the law laid down by the Supreme court that concealment must be accompanied with the intention of the assessed to evade his tax liability. The assessed in this case had uniformly claimed expenditure against four heads in three assessment years. When the appeal against the order of Assessing Officer before CIT (A) in respect of assessment order 1998-1999 failed the assessed instead of preferring appeal considered it proper not to litigate further as it was running into heavy losses and even if the appeal had been allowed, the assessed would not have paid any tax. The assessed in any case would have remained in heavy losses. The assessed therefore thought it proper not to prefer an appeal and after receipt of order, assessed made an application on 4.2.2003 to correct the income returns of subsequent years in accordance with order of CIT for the year 1998-1999. The assessed, therefore, filed revised returns deleting the expenses which were disallowed by the CIT (A). In the relevant year assessed had also claimed expenses of ₹ 2 crores paid by the assessed in terms of the agreement entered into by the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ad given all particulars of expenditure and income and had disclosed all facts to the Assessing Officer. It is not the case of the Assessing Officer or the appellant that in reply to the questionnaire of the Assessing Officer, some new facts were discovered or Assessing Officer had dug out some information which was not furnished by the assessed. 17. We find that appellant's contention of concealment of income by the assessed or furnishing of false particulars by the assessed has no basis. There is no force in the appeal and the appeal deserves to be dismissed and is hereby dismissed. No order as to costs. 23. Similarly, this Court sees substantial force in the arguments having been made by the learned counsel representing the respondent that there was no occasion for the respondent Bank to show interest on securities and interest on head office investment account, because same was made chargeable pursuant to Board s instructions No. 1923 dated 14.3.1995 and that too for the period October, 1991 to 31.3.1992 and as such there is no concealment, if any, on the part of assessee. Learned counsel representing the appellant was unable to dispute that interest on securiti ..... X X X X Extracts X X X X X X X X Extracts X X X X
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