TMI Blog2017 (7) TMI 108X X X X Extracts X X X X X X X X Extracts X X X X ..... ( Per S. V. Gangapurwala, J. ) 1] Admit. Taken up for final hearing with the consent of the learned counsel for the parties. 2] The Revenue has assailed the judgment and order of the Tribunal thereby partly allowing the appeal filed by the Revenue against the judgment and order of the Commissioner (Appeals). 3] The Income Tax Return of the RespondentAssessee was processed under Section 143(1) of the Income Tax Act (for sake of brevity hereinafter referred to as the Act ), demand was raised for ₹ 1,64,90,573/and penalty of ₹ 1,19,30,677/was imposed by the Assessing Officer under Section 221(1) of the Income Tax Act for default by Assessee in the payment of demand. Aggrieved thereby the Assessee filed Appeal before the Commissioner of IncomeTax (Appeals)17, Mumbai [for short CIT(A) ]. The CIT(A) under its order dated 15/03/2010 deleted the penalty imposed by the Assessing Officer holding that interest component has to be excluded while levying penalty under Section 221(1) and since the penalty levied exceeded the tax component, it setaside the order levying penalty. Aggrieved thereby the Department filed a appeal before the Income Tax Appellate Tribunal, Mumbai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rned counsel to substantiate his contention relies on the judgment of the Apex Court in case of Commissioner of Income Tax vs. Anjum M.H. Ghaswala Ors., reported in (2001) 252 ITR 0001. No powers are given for waiver of the interest. 6] According to the learned counsel for the Appellant, since interest forms part of amount chargeable under Section 156 of the Act, the penalty under Section 221(1) is also imposable. The order of the Tribunal directing the Assessing Officer to restrict levy of penalty only to the Tax component excluding the interest under Section 234(A), 234(B) and 234(C) of the Act is perse erroneous. 7] Mr.Hadade, the learned counsel for the Respondent supports the order of the Tribunal and submits that tax, interest and penalty are separate components. The term tax does not include penalty or interest. The learned counsel relies on the judgment of the Hon'ble Apex Court in a case of Harshad Shantilal Mehta vs. Custodian and others, reported in (1998) 231 ITR 871 and another judgment of the Division Bench of this Court in case of Commissioner of Income Tax vs. P.B. Hathiramani, reported in (1994) 207 ITR 483. 8] We have considered the submissions ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Section 221 of the Act would in addition to the tax include within its fold the interest component also. 11] The definition of the Tax u/Sec.2(43) read in its entirety suggests that the tax means incometax, supertax and/or the fringe benefit tax, as the case may be chargeable under the provisions of the Act. The definition of tax does not take within its fold the interest component. 12] The definition of interest as envisaged under Section 2(28A) of the Act would not be relevant in the present matter. As the said definition is restricted to the interest payable in respect of any moneys borrowed or debt incurred. 13] It is the elementary rule of interpretation that when the language of a statute is clear and unambiguous, the Courts are to interpret the same in its literal sense and not to give a meaning that would cause violence to the provisions of the statute. Each word in the statute should be assign the meaning as per the context. 14] The provision imposing penalty will have to be strictly construed. The statute being fiscal and the provisions of Section 221 dealing with imposition of penalty naturally shall have to be strictly construed. Strict construction is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h the default in payment of tax and not of interest. Reference can also be had to the judgment of the Apex Court in a case of Harshad Shantilal Mehta vs. Custodian and others (supra). In the said case, the Apex Court had framed question No.5 as under; Question No.5 Whether taxes under Section 11(2)(a) would include interest or penalty as well? 18] While answering the said question, the Apex Court observed thus; We are concerned in the present case with penalty and interest under the Income Tax Act. Tax, penalty and interest are different concepts under the Income Tax Act. The definition of tax under Section 2(43) does not include penalty or interest. Similarly, under Section 156, it is provided that when any tax, interest, penalty, fine or any other sum is payable in consequence of any order passed under this Act, the Assessing Officer shall serve upon the assessee a notice of demand as prescribed. The provisions for imposition of penalty and interest are distinct from the provisions for imposition of tax. The learned Special Court judge, after examining various authorities in paragraphs 51 to 70 of his judgment, has come to the conclusion that neither penalty n ..... X X X X Extracts X X X X X X X X Extracts X X X X
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