9911796707
TMI Blog1989 (12) TMI 7X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessment year involved is 1978-79 for which the relevant year of account is the year ended on March 31, 1978. The facts found by the Tribunal as contained in the statement of case are as follows : " The assessee is a limited company. The assessment year involved is 1978-79, the relevant accounting period for which ended on March 31, 1978. In the course of assessment of the company for the assessment year 1978-79, the Income-tax Officer found that the company paid Rs. 10,778 as shortfall of premium and Rs. 1,353 as compounding fees for understating the insurable value of goods before the authorities of the Emergency Risks Insurance. The company debited the said sum in its profit and loss account. But the Income-tax Officer was of the vi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 12,131." Mr. A. C. Moitra, learned advocate appearing on behalf of the Revenue, relied on the decision of the Supreme Court in the case of Haji Aziz and Abdul Shakoor Bros. v. CIT [1961] 41 ITR 350 in support of his contention that the amount of Rs. 10,778 payable by the assessee under the provisions of the Emergency Risks Insurance Act, 1971, is a penalty and, therefore, not liable to be deducted. In this case, the Supreme Court considered the fact of payment of fines to release the goods after confiscation of the same by the customs authorities which were imported from abroad for selling them in India. In this connection, it was held by the Supreme Court that (headnote) : "If a sum is paid by an assessee in conducting his business becau ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... thout payment of the cess, interest begins to accrue. It is not a penalty, for which provision has been separately made by section 3(5) nor is it a penalty within the meaning of section 4 which provides for a criminal liability and a criminal prosecution. The penalty payable under section 3(5) lies in the discretion of the collecting officer or authority. In the case of penalty under section 4, no prosecution can be instituted unless, under section 5(1), a complaint is made by or under the authority of the Cane Commissioner or the District Magistrate. In truth, the interest provided for under section 3(3) is in the nature of compensation paid to the, Government for delay in the payment of cess." In the instant case, the Tribunal found tha ..... X X X X Extracts X X X X X X X X Extracts X X X X
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