9911796707
TMI Blog1996 (3) TMI 171X X X X Extracts X X X X X X X X Extracts X X X X ..... this account, the assessee credited, amongst other amounts, the refund of Rs. 7,05,382 on 24-5-1989. Other refunds amounting to Rs. 10,34,286 and Rs. 6,463 were also credited on 15th April and 21st February respectively, but with those amounts we are not concerned in the present appeal. In the ledger account, the refund voucher number alone was given by way of details and it is common ground that the break-up of the amount into income-tax and interest was not given. The printed accounts disclosed a loss of Rs. 58,89,802. The aforesaid loss was reduced by an amount of Rs. 6,11,721 described as ' Income-tax/Surtax/Refund/Adjustment (for earlier years) '.The net loss was thus reduced to Rs. 52,78,080. 3. The assessee filed its return of inco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ; -------- For the assessment year 1989-90, the assessee was paid interest on refund to the tune of Rs. 840 on 12-2-1990. Adding this to the abovesaid amount, the total interest received by the assessee from the Income-tax Department came to Rs. 6,80,287. The assessee was asked by the ITO to furnish the details regarding the interest received/paid by it during the relevant year in order to ascertain whether the above interest had been declared as income. There was no response to the letters written by the ITO. He thereaft ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... He observed that the assessee itself was diligent enough to ask for interest on the refunds and the interest was granted pursuant to the assessee's request and in this background it was difficult to believe that the assessee was not aware of the fact that the refund included interest also. He was, therefore, of the view that as per provisions of clause (a) of Explanation 4 to section 271(1)(c), though the assessment was on a loss, the assessee was liable to pay penalty on the undisclosed interest of Rs. 6,80,287. In this view of the matter, he imposed a penalty of Rs. 4,04,092. 6. On appeal, the CIT(Appeals) confirmed the levy of penalty on substantially the same grounds. 7. Before us, in the further appeal, the learned counsel for the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e sought to highlight the fact that it was the assessee who was requesting the Income-tax authorities for grant of interest and, therefore, the assessee cannot take the plea that he was not aware of the fact that the refund included interest also. 9. On a careful consideration of the rival contentions, we are of the view that the benefit of doubt should be given to the assessee and the penalty has to be cancelled. It is no doubt true that it was the assessee who was asking for the interest. It is also true that having done so and having also received the refund voucher, he did not proceed to enquire as to whether the refund included the interest prayed for. This does indicate carelessness on the part of the assessee. But for the purpose o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essee or of any assessee for that matter cannot at all be postulated. It is not as if the refund voucher itself contained the fact that it included interest also. Even the assessment order indicates that the Assessing Officer also had to verify the records of the earlier assessment years in order to ascertain whether the refund contained the interest element. It is only by verifying the records of the earlier year that he had noticed that a part of it constitutes interest, which is taxable. Had that exercise been undertaken by the assessee itself before filing the return, the present appeal would not have arisen. But failure to do so does not indicate any contumacious or obstinate conduct on the part of the assessee but it only shows laxity ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be levied. The power to decide whether the facts of a case give rise to a situation for imposition of penalty vests in the taxing officer in the same way as in the appellate authority. The Tribunal took stock of the entire aspect and in exercise of its appellate powers came to hold that the facts of the case did not warrant an imposition of penalty by the exercise of that jurisdiction. This, we are of the view, is a matter within the domain of the Tribunal's jurisdiction and once such a finding is reached or a recorded, there is hardly any question of law arising for being referred to the court or for being answered. In the facts of the case, we are inclined to think that the Tribunal did come to the conclusion that the facts were such tha ..... X X X X Extracts X X X X X X X X Extracts X X X X
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