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TMI Blog2017 (7) TMI 107X X X X Extracts X X X X X X X X Extracts X X X X ..... attributable in not supplying the copies of accounts and relevant record and statements, the words "copies of account and relevant record and statements" would also include within it, giving inspection of the accounts and relevant record and statements. Therefore, the interest for the delay in filing the return of income in this case has to be computed after excluding the period from the date the inspection was asked for i.e. 24.05.2001 till the inspection was given i.e. 03.01.2002. The Assessing Officer to work out the exact demand for interest in the above terms. - Income Tax Appeal No. 42 of 2007 - - - Dated:- 29-6-2017 - M. S. Sanklecha And Manish Pitale, JJ. Mr. C.J. Thakar Advocate for Appellant Mr. Bhushan N. Mohta, Advocate for Respondent JUDGMENT ( Per M. S. Sanklecha, J. ) 1. This appeal under Section 260A of the Income Tax Act, 1961 (Act) impeaches the order dated 16.06.2016 passed by the Income Tax Appellate Tribunal, Nagpur (Tribunal). The impugned order relates to assessment for block period 01.04.1990 to 04.08.2000. 2. This appeal was admitted on 23.10.2007 on the following substantial question of law:- Was the Tribunal justified in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8377; 15,00,000/- The tax thereon was determined at ₹ 9,90,000/- and interest payable for the delayed filing of the return of income under Section 158BFA(1) was ₹ 1,23,750/-. The demand was adjusted against the seized cash. (g) Being aggrieved with the order dated 29.08.2002 of the Assessing Officer to the extent it charged interest at ₹ 1,23,750/-, the appellant filed an appeal to the Commissioner of Income Tax (Appeals) (CIT(A)). The order dated 29.08.2002 of the CIT(A) does record the fact that the total demand payable by the appellant and his brother was approximately ₹ 17,34,000/- and the amount lying with the department was ₹ 25,00,000/-. Nevertheless by the order dated 29.08.2002 the CIT(A) dismissed the appellantassessee's appeal. This on the ground that in terms of Sections 158BFA(1) of the Act, there is no discretion with the authorities to waive the interest payable. (h) Being aggrieved, the Appellant-Assessee carried the issue of the payment of interest in appeal to the Tribunal. By the impugned order dated 16.06.2006, the Tribunal held that charging of interest was compensatory in nature. However, in the present facts, the impugn ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cessary for the purposes of preparing the return of income. Further the inspection of the record was also granted only on 03.01.2002. Therefore, the period from 26.05.2001 to 03.01.2002 is excludable while computing interest; (b) The finding of the Tribunal that as the appellant had filed the return of income on estimate basis even before receiving copies of the documents as sought for, would indicate that there was no requirement of obtaining the documents before filing the return of income. This finding of the Tribunal is perverse, as the return of income was filed only after grant of inspection on 03.01.2002. Consequently the interest payable from the period 26.05.2001 (when the return had to be filed) till 03.01.2002 (when filed) ought to be excluded. (c) In any case the amount of ₹ 25,00,000/- had been seized by the Revenue and was in their possession from the date of search i.e. 04.08.2000. The tax determined upon the appellant and his brother collectively was less than ₹ 25,00,000/-, which were seized. Consequently as there was no delayed payment of the tax, the occasion to charge interest would not arise, considering the fact that the impugned order of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n that there was no delay in paying the tax on the undisclosed income as the amount of ₹ 25,00,000/- has already been seized by the Revenue, cannot be sustained. Moreover in the facts of the present case the offer to adjust the amount of ₹ 25,00,000/- which had been seized with the tax which would be ultimately determined, was only made along with the filing of the return. Therefore, for the delay post filing of the return, it could be argued that no interest is payable, but prior thereto there is not even an offer made to adjust the amount. Section 158BFA(1) of the Act seeks to recover interest only till the date of filing of the return of income after the expiry of the period stipulated in Section 158BC notice. Therefore, no occasion to examine the levy of interest post the filing of return arises. 10. It was next contended that the delay in filing the return of income is completely attributable to the revenue for non-furnishing of copies of the documents and not giving inspection of the documents seized, within a reasonable time after making the demand. The notice dated 17.04.2001 under Section 158BC of the Act called upon the appellant to file his return of incom ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of any discretion provided to waive interest under Section 158-BFA(1) of the Act. There can be no dispute that bare reading of the section does not provide for any discretion to waive and/or reduce the interest imposable on account of the late filing of the return of income. It is a settled position in law that a fiscal statute has to be strictly interpreted, particularly when there is no ambiguity in the statute. The normal rule of interpreting a fiscal statute is the literal rule of interpretation. However, when the Parliament makes a law, it proceeds on the basis that the Executive i.e. the State will act fairly and not cause unjustified burden upon the subject. The provisions of Section 158BFA(1) of the Act proceeds on the above premise and it was expected of the State to grant copies of the documents seized and/or inspection of the record as expeditiously as possible, so as to enable the appellant to file his return of income. This particularly so, as to delay in filing of return, leads to levy of interest. This not having been done, as was expected under the Statute, the subject cannot be made to pay for the negligence of the Officers of the State. Therefore, in a case like t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... levied under Section 158BFA(1) of the Act. However, Mr. Mohta, learned counsel appearing for the revenue sought to rely upon the decision of the Karnataka High Court in Commissioner of Income Tax .vs. K.L. Srihari (2011)335 ITR 215 (Karnataka) and Commissioner of Income-tax Central Circle .vs. B. Suresh Baliga (2014) 364 ITR 560 (Karnataka). In both the aforesaid decisions, the Karnataka High Court has taken a view that the provisions of Section 158BFA(1) of the Act are mandatory in nature and interest would have to be levied in terms thereof irrespective of the reason for delay. In both the aforesaid cases, the reason for the delay was not attributable to the revenue as in the case before us. From the facts stated in both the cases, it does not come out that the delay in filing the return of income was on account of the revenue in not furnishing copies and/or not giving inspection of the seized documents to the assessee, which would form the basis for filing the return of income of undisclosed income. Therefore, the aforesaid two decisions relied upon by the Revenue are completely distinguishable on facts, as the delay in those cases was not held to be attributable to the rev ..... X X X X Extracts X X X X X X X X Extracts X X X X
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