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TMI Blog1988 (12) TMI 142X X X X Extracts X X X X X X X X Extracts X X X X ..... of Rs. 2,04,384 was shown against the head 'Any other expenditure/deduction claimed under secs. 28 to 44D' and that the said amount of Rs. 2,04,384 included Rs. 1,14,212 being "interest on income-tax for assessment year 1967-68 (assessed in earlier year)". During the course of the assessment proceedings on 28-12-1976, the assessee was asked to inform with the help of adequate evidence that the said amount of Rs. 1,14,212 was taxed in an earlier year as claimed in the return. No evidence could be produced by the assessee as to the year in which the amount of Rs. 1,14,212 was offered to tax. In the assessment order passed on 10-8-1977 under sections 143(3)/144B the deduction for Rs. 1,14,212 as claimed by the assessee from the total income was not accepted by the ITO. The ITO initiated penalty proceedings under section 271(1)(c) for concealment of income and furnishing inaccurate particulars thereof amounting to Rs. 1,14,212. The assessee in its letter dated 7-7-1978 denied that there was any concealment of any particulars of its income or that it had furnished any inaccurate particulars of income deliberately or otherwise and reliance was placed on the decisions of the Supreme Cour ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s assessed in the earlier year. No other meaning can be attributed to the said expression. The assessee deducted Rs. 1,14,212 in the return and arrived at the total income for the assessment year 1974-75. So the assessee's contention that while claiming the deduction of the amount of Rs. 1,14,212 in the return it never meant that the said sum has been assessed in an earlier year is not at all correct." In that view of the matter the ITO had held that it was evident that the assessee had concealed its income and furnished inaccurate particulars in respect of such income by claiming as a deduction a sum of Rs. 1,14,212 to arrive at the returned income and that the assessee was, therefore, liable to penalty under section 271(1)(c) of the Income-tax Act, 1961. Considering the facts and circumstances of the case, he imposed a penalty of Rs. 2,00,000 after obtaining the previous approval of the IAC. Aggrieved by the order of the ITO the assessee preferred an appeal to the CIT(A). 3. Before the CIT(A) it was contended that the Assistant of the company, who prepared the return, claimed deduction of the amount of Rs. 1,14,212 either on the ground that it was not assessable being an inte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... particulars thereof and upheld the order of the ITO. Aggrieved by the order of the CIT(A) the assessee filed the present appeal before the Tribunal. 4. The assessee's counsel filed a paper book of 24 pages containing inter alia, the assessment order dated 25-2-1972 for the assessment year 1967-68. The arguments of the assessee's counsel were to the following effect : The assessee-company is a manufacturer of vanaspati. For the assessment year 1974-75 the previous year ended on 31-3-1974. In the return for the assessment year 1974-75 the net profit as per Profit and Loss A/c was shown at Rs. 54,59,461 in Sub-Part B, Part I, Annexure C of the return. In the computation of income from business, the assessee deducted Rs, 2,04,384 from the said business income. The said amount of Rs. 2,04,384 included Rs. 1,14,212 which was described in the return as "Int. on I. Tax for Asst. Year 67-68 (Assessed in earlier years)". Photostat copy of the return of income for assessment year 1974-75 can be seen at pages 5 to 13 of the paper book. An amount of Rs. 2,77,708 was credited to the Profit and Loss A/c., for the year ended 31-3-1974, details of which are given at page 14 of the paper book. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... used the word "assessed" instead of " assessable". The assessee-company has disclosed full particulars of interest u/s. 214 both in the return of income and the statements filed along with the return of income for the assessment years 1974-75. The details of interest received filed before the ITO for the assessment year 1974-75 included this interest u/s. 214 of Rs. 1,14,212. Thus the ITO is not entitled to charge the assessee that it had concealed the particulars of its income or deliberately furnished inaccurate particulars of such income. The ITO has included this amount of Rs. 1,14,212 in the assessment for the assessment year 1974-75. It has become final. It is true that no objection was taken by the assessee for its inclusion either in the assessment proceedings or in the appellate proceedings. The ITO started initiation of proceedings u/s. 271(1)(c) by issuing notice u/s. 274/271 dated 10-8-1977. The assessee filed its reply dated 7-7-1978 which can be seen at page 24 of the paper book. In the said reply dated 7-7-1978 the assessee denied any concealment of particulars of its income or furnishing inaccurate particulars of its income. Reference was placed on the decisions in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t in the case of J.K. Spg. Wvg. Mills Co. , the assessability of interest u/s. 214 is dependent upon the date of the assessment order. In that case the assessee's accounting year relevant for the assessment year 1957-58 ended on 31-12-1956. The assessments of that assessee for the assessment years 1951-52 and 1952-53 were made on 20-3-1956 and 29-3-1956 and they resulted in interest u/s. 18A(5) of the IT Act, 1922. The assessee did not include the interest u/s. 18A(5) as the income in the return filed for the assessment year 1957-58. When proceedings u/s. 147(a) of the IT Act, 1961 were initiated, the High Court held that as both these dates viz. 25-3-1956 and 29-3-1956 fell within the previous year ending on 31-12-1956 relevant for the assessment year 1957-58, interest should be assessed only in the year 1957-58. The facts of the present case are fully covered by the facts of that case. Following said decision we hold that the impugned amount of Rs. 1,15,145 modified in the subsequent orders u/s. 250 to Rs. 1,14,212 became the income of the assessee assessable in the assessment year 1972-73 as the assessment was made on 25-2-1972. The dates of the subsequent orders u/s. 250 viz. ..... 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