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TMI Blog2015 (4) TMI 1165X X X X Extracts X X X X X X X X Extracts X X X X ..... ter under the apprehension that as they have violated the one time settlement, therefore, they are liable to pay compound interest and liquidated damages, the statement was made in the return. It was, therefore, a case whether under the apprehension that due to violation of the one term settlement the appellant was liable to pay compound interest and liquidated damages they made certain statement in the return and that too when they were not liable to pay any tax due no income having accrued on account of sustained loss, therefore, in the facts and circumstances of the case, we are of the considered view that it is not a case where an inaccurate or statement is made deliberately or there is deliberate concealment of fact by the appellant. The error seems to be bonafide therefore, we are of the considered view that the penalty could not have been imposed particularly when on the mistake on the part of the Chartered Accountant, the penalty of ₹ 3,30,195/ - has been made. - Decided in favour of assessee - M.A.I.T. No. 7/2002 - - - Dated:- 29-4-2015 - RAJENDRA MENON, MOOL CHAND GARG, JJ. JUDGEMENT This is assessee's appeal under Section 260A of the Income ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee had entered into a one time settlement with the financial institutes through which the financial institutes had agreed to waive liquidated damages and compound interest, if the principle amount i.e. ₹ 8.50 Crore was paid in instalments on or before 30th June, 1992. The Books of account reflected that this was an ascertained amount and out of this sum of ₹ 8.50 Crores, ₹ 4.40 relate to principle amount and the balance of ₹ 4.1 Crore related to interest. Be it as it may be, on scrutiny of the records it was found that the assessee has not disclosed the correct position with regard to the payment of interest and settlement of the outstanding dues of the financial institute. As a result, the Assessing Officer found that the Assessee has claimed excessive interest to the tune of ₹ 1,32,9,788/ -. This was added to the income of the assessee and the penalty proceedings initiated. The assessee challenged the penalty proceedings before the Commissioner. The Commissioner allowed the appeal and found that there was no deliberate evasion or submission of inaccurate fact and the penalty was quashed. However, on a appeal being filed by the revenue, the Tribunal h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ues Certificate on 27.6.1994 and completed the process on 31.1.1995 and much after this, the assessment was already over and as this apprehension about the waiver of compound interest crystallized otherwise into the correct fact only on 31.1.1995 much before the assessment order was passed, the petitioner was entitled to the protection of law and there being no deliberate or inaccurate statement made by the appellant, the Tribunal has committed an error in the matter of imposing penalty. It is said that the Tribunal lost complete sight of the apprehension of the appellant in the matter of non availability of compound interest, waiver and liquidated damages and the fact that financial institute gave the NOC only on 31.1.1995 and the No Dues Certificate on 27.6.94, much after the original return was filed on 2.11.92 and the revised return on 26.11.93. It is said that the apprehension of the assessee on 7.4.93 and 26.11.93 was correct and they could not imagine on the said date that they would be granted the benefit of waiver of interest or liquidated damages as per to one time settlement inspite of the default committed by them. He invites our attention to the following judgments: Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oduct (P)(Ltd.) (supra) and the correct meaning and import of the words furnishing inaccurate particulars or making an erroneous or inaccurate statement has been considered by the Supreme Court. Even the question of mens rea laid down in the case of Dharmendra Textile Processors Ors. (supra) has been considered and after discussing the judgment of Supreme Court in the case of Dharmendra Textile (supra) so also the law in the case of Dilip N. Shroff Vs. Jt. CIT : [2007] 291 ITR 519 which has been over -ruled by Dharmendra Textile Processors Ors. (supra), the Supreme Court deals with the matter in para 9 in the following manner: - 9. We are not concerned in the present case with the mens rea. However, we have to only see as to whether in this case, as a matter of fact, the assessee has given inaccurate particulars. In Webster's Dictionary, the word inaccurate has been defined as: - not accurate, not exact or correct; not according to truth; erroneous; as an inaccurate statement copy or transcript . We have already seen the meaning of the word particulars in the earlier part of this judgment. Reading the words in conjunction, they must mean the details supplied i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aiver of interest would be forfeited and liquidated damages would also be imposed. Admittedly, the assessee did not abide by the terms of the one time settlement, could not pay the entire due of 8.5 Crores on or before 30.6.92, they paid it only on 7.4.1993. Till filing of the return they had only paid a sum of ₹ 5.25 Crores and the deduction claimed in the earlier year was deducted and the total deduction claimed was ₹ 3,33,25,278/ - and thereafter under the apprehension that as they have violated the one time settlement, therefore, they are liable to pay compound interest and liquidated damages, the statement was made in the return. However, the anticipation of the assessee at the time of the filing of the return was because of the fact that they have violated the one time settlement, but it was only after the assessment was over that on 29.6.1994 and on 31.3.1995 that the fact about waiver of interest and liquidated damages by the Financial Institute was known to be incorrect. It was, therefore, a case whether under the apprehension that due to violation of the one term settlement the appellant was liable to pay compound interest and liquidated damages they mad ..... X X X X Extracts X X X X X X X X Extracts X X X X
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