2017 (11) TMI 202 - HC - Income Tax

Penalty levied under Sections 271D and 271E - whether as the Sections do not specify any minimum penalty or maximum penalty, the cases of the assessees are outside the Amnesty Scheme mentioned? - Held that - A reading of Section 271D shows that a person who is liable to pay penalty thereunder shall be liable to pay, by way of penalty, a sum equal to the amount of the loan or deposit or specified sum so taken or accepted, in contravention of Section 269SS. Similarly, under Section 271E also, the penalty provided is a sum equal to the amount of loan or deposit or specified advance, if so repaid. When a specified sum is so provided as the penalty, such specified sum is the minimum penalty payable. That does not, however, mean that the benefit of the Scheme can be claimed only by those assessee who have been levied penalty under the provisions of the Act providing for minimum penalty and maximum penalty.

Summary

Issues:
1. Challenge to judgments upholding entitlement to Direct Tax Dispute Resolution Scheme.
2. Interpretation of penalty provisions under Sections 271D and 271E of the Income Tax Act.
3. Eligibility of assessees for benefit under the Amnesty Scheme.
4. Applicability of minimum penalty requirement for claiming benefits under the Scheme.

Analysis:
The High Court of Kerala addressed multiple issues in the present judgment. The appeals stemmed from a common judgment in various writ petitions concerning the entitlement of assessees to benefit from the Direct Tax Dispute Resolution Scheme, 2016, despite circulars issued by the CBDT. The Revenue challenged the judgments upholding the assessees' entitlement. The Revenue contended that cases involving penalties under Sections 271D and 271E of the Income Tax Act, without specified minimum or maximum penalties, were outside the scope of the Amnesty Scheme. The argument focused on the minimum penalty requirement specified in the Scheme for eligibility.

Upon hearing the parties, the Court considered the Revenue's contention. The Senior Counsel for the Revenue argued that only cases with penalties falling under provisions specifying minimum and maximum penalties could avail the Scheme's benefits. However, the Court rejected this argument. It analyzed Sections 271D and 271E, noting that the penalty specified therein represented the minimum penalty payable. The Court emphasized that the Scheme was not limited to cases with penalties falling under provisions with specified minimum penalties. The Court highlighted that the specified penalty amount in the Act did not restrict the Scheme's applicability to only those cases.

In conclusion, the Court dismissed the appeals, finding no merit in the Revenue's contention. The Court clarified that the benefit of the Direct Tax Dispute Resolution Scheme was not restricted to cases with penalties falling under provisions specifying minimum penalties. The judgment provided a comprehensive analysis of the interpretation of penalty provisions under the Income Tax Act and the eligibility criteria for claiming benefits under the Amnesty Scheme.