1 Penalty & Interest under Income-tax Act WIRC 13/07/2012 CA. Reepal G. Tralshawala [email protected]

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Penalty & Interest under Income-tax Act

WIRC13/07/2012

CA. Reepal G. [email protected]

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Penalties

Scheme & Object (Legislative intent) Abide Laws Deterrent Effect

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Penalties

Penalty u/s.271(1)(c) Concealment of particulars of income; OR Furnishing inaccurate particulars of income

Concealment of particulars of income - meaning hiding the particulars i.e. non-furnishing of particulars in respect of claim made

Furnishing inaccurate particulars – meaning fabricated / false particulars furnished i.e. claim made on basis of wrong / incorrect particulars

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Penalties

Penalty u/s.271(1)(c) Analysis of provision-

AO/CIT(A)/CIT - satisfied in course of any proceedings that any person -

has concealed the particulars of his income; or

has furnished inaccurate particulars of such income; -

may direct ….. by reason of concealment of particulars of his income or furnishing inaccurate particulars of such income

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Penalties

Penalty u/s.271(1)(c) Emphasis on the word “Particulars” Disclosure of particulars of income-

What particulars are required to be disclosed How the same are to be disclosed When the same are required to be disclosed To what extent are they required to be

disclosed

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Penalties Penalty u/s.271(1)(c)

Nature of Proceedings & Burden of Proof Law before 1964

Quasi-criminal proceedings - language used word ‘deliberately’

Gokuldas Hari Vallabhdas (1958) 34 ITR 98 (Bom) CIT v Anwar Ali (1970) 76 ITR 696 (SC) Hindustan Steel Ltd. v. State of Orissa (1972) 83 ITR 26

(SC) Principles laid down as under-

Deliberate act / mens rea - for levy of penalty Revenue to prove that disputed amount constitutes

income even though explanation proved to be false in assessment proceedings - CIT v. Khoday Eswarsa & Sons (1972) 83 ITR 369 (SC)

Finding in assessment not conclusive - burden on department to prove concealment - Anantharam Veerasinghaiah & Co. v. CIT (1980) 123 ITR 457 (SC)

Penalty not for technical or venial breach of provisions

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Nature of Proceedings & Burden of Proof Law from 1964 to 1976

Word ‘deliberately’ deleted and Explanation added Explanation before deletion in 1976 contained wording

– ‘failure to return the correct income did not arise from any fraud or any gross or willful neglect on his part’

Amendment of 1964 provision to overcome decision of Anwar Ali (SC) - even if explanation found to be false still no penalty

CIT v Mussadilal Ram Bharose (1987) 165 ITR 14 (SC) - laid down certain principle considering law existing between 1964 to 1976 read with Explanation - Rebuttal to be based on material - Explanation to be supported with evidence - Explanation not to be fantastic or fanciful

Proceedings remained to be Quasi-criminal

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Nature of Proceedings & Burden of Proof Law from 1976 onwards

Explanation of 1964 amended 5 new Explanations added Clause (B) added in 1986 in Explanation 1 Explanation 1 specifically overruled Anwar Ali

decision in respect to falsity of explanation Principles laid down in detail in T. Ashok Pai v. CIT

(2007) 292 ITR 11 (SC)

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Decision of Supreme Court in UOI v. M/s. Dharamendra Textile Processors (2008) 306 ITR 277 (SC) - larger Bench decision

Explanations indicate element of strict liability

Object of legislature is to provide a remedy for loss of revenue

Penalty is civil liability Wilful concealment not essential ingredient

for attracting civil liability Effect & relevance of prosecution provision

in sec.276C not considered in Dilip N. Shroff case – 291 ITR 519 (SC)

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Issues that arise after decision of SC in Dharamendra Textile Processor -

Whether quasi-criminal or civil in nature

Whether mens rea still applicable

Whether levy of penalty is automatic

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Whether levy of penalty is automatic UOI v. Rajasthan Spinning & Weaving Mills (SC) 317

ITR 1 (SC) Not automatic - explained the decision rendered in

Dharamendra Textile Processor Conditions expressly mentioned in particular provision

needs to applied Reliance Petro-products 322 ITR 158 (SC) CIT v. MTNL (Del) – order dated 10/10/2011 –

considered all the three aforesaid SC decisions Kanbay Software India P. Ltd. v. DCIT – 122 TTJ 721

(Pune) ACIT v. VIP Industries Ltd. (2009) 21 DTR 153 (Mum) Mimosa Investment Co. P. Ltd. v. ITO (2009) 28 SOT

470 (Mum)

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Explanation 1 Initial burden of proof on assessee

Analysis reveals- In respect of material facts to computation of total income,

the assessee- (A) – (i) fails to offer an explanation; or

(ii) explanation offered is found to be false by the AO or CIT(A) or Commissioner; or

(B) – (i) offered explanation but not substantiated and also fails to prove that the explanation is bona fide; and

(ii) fails to show that all the facts relating to and material for computation of total income have been disclosed

the addition or disallowance made in computing the total income shall be deemed to represent income in respect of which particulars have been concealed.

Reliance Petroproducts – 322 ITR 158 (SC)

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Explanation 1 If explanation of assessee is not found to be

false - levy of penalty not justified invoking Explanation 1

National Textiles v. CIT [2001] 249 ITR 125 (Guj) CIT v. Jalaram Oil Mills [2002] 253 ITR 192 (Guj) CIT v. M.P. Narayanan [2000] 244 ITR 528 (Mad)

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Explanation 2 This explanation is for benefit of department Provides for levy of penalty in retrospect Intangible / ad hoc addition made in year 1

Penalty not levied due to case of ad hoc addition In year 2 or subsequent years - if benefit of

this intangible addition taken against other unaccounted investments or cash credits, etc., the intangible addition becomes real income

Penalty would then be levied in year 1 Time limit taken care of by sec.271(1A)

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Explanation 3 Prior to amendment by Finance Act, 2002, w.e.f. 1-4-

2003, applicable only in case of new assessee if return of income not filed before completion of assessment

Explanation not attracted in case of assessee previously assessed to tax prior to amendment – amendment not retrospective – CIT v. Smt. Lata Shantilal Shah (2009) 18 DTR 246 (Bom)

From AY 03-04, Explanation covers all assessees Deemed concealment of income for non-filing of

return of income before time limit prescribed u/s.153(1) i.e. completion of assessment

Effect - converts concealment penalty into penalty for delay in filing return of income

Upto AY 1988-89, delay in filing return covered by s.271(1)(a) and thereafter by levy of interest u/s.234A

Provision is over and above levy of interest u/s.234A

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Explanation 4 Covers loss to loss cases Provision amended by Finance Act 2002, w.e.f.

1/4/2003 - clause (a) substituted Prior to amendment - conflicting view of Courts more

particularly after decision in CIT v. Prithipal Singh 249 ITR 670 (SC)

Law was then settled in Virtual Soft Systems Ltd. v. CIT [2007] 289 ITR 83 (SC) (no penalty in loss to loss case)

However, this was then reversed by larger bench of SC in CIT v. Gold Coin Health Food P. Ltd., 304 ITR 308 (SC) (penalty justified even in loss to loss cases)

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Explanation 5 Inserted w.e.f. 1/10/1984 and discontinued

w.e.f. 1/6/2007 and substituted by Explanation 5A and 271AAA w.e.f. 1/6/2007

Applicable only in case of search action Prior to deletion, the provision contained for

levy of penalty in search cases where assets are found and which are acquired out of undisclosed income

Immunity is provided from levy of penalty upon fulfillment of certain conditions

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Explanation 5 – Immunity if- income or transaction resulting in income is recorded

in the books of account before the date of search action; or

such income is disclosed to the Chief Commissioner or Commissioner before the date of search action; or

in the search action, disclosure is made in statement recorded u/s.132(4) and specifying therein the manner of earning the income disclosed and also pays tax together with interest in respect of such income.

Above 3 conditions are not cumulative but separate from each other

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Penalties

Penalty u/s.271(1)(c) Explanation 5 – issues mostly relating to third

condition Third condition consists of 3 parts-

Disclosure made in statement recorded u/s.132(4); Manner of earning the income to be disclosed; Payment of tax with interest in respect of income

disclosed. Once all the 3 conditions satisfied - immunity

available Gebilal Kanhaialal (HUF) v. ACIT (2004) 270 ITR 523

(Raj)

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Penalties

Penalty u/s.271(1)(c) Disclosure made in statement recorded

u/s.132(4); Recording of statement only by authorised

officer as per 132(4) Disclosure thus only in statement u/s.132(4)

& not otherwise Disclosure by way of letter or statement

u/s.131 - immunity may not be available Finance Minister Speech & instruction of

CBDT dated 10/3/2003 - no disclosure - rely of evidence

How disclosure to be made

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Penalties

Penalty u/s.271(1)(c) Manner of earning income to be

disclosed Manner of deriving income to be specified in

the statement recorded & not later Even if manner not specified or where no

such question asked by authorised officer - immunity still available

CIT v. Mahendra C. Shah [2008] 299 ITR 305 (Guj); CIT v. E.V. Balashanmugham [2006] 286 ITR 626 (Mad); CIT v. Nem Kumar Jain [2006] 151 Taxman 187 (All); CIT v. Radha Kishan Goel [2005] 278 ITR 454 (All); Gulabrai V. Gandhi v. ACIT [2003] 84 ITD 370 (Mum)

Also refer – Indus Engg. Co. v. ACIT (Inv) 184 Taxman 269 (Bom) – passing reference made – non disclosure of manner of earning concealed income – penalty justified

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Penalties

Penalty u/s.271(1)(c) Payment of tax with interest in respect of

income disclosed Whether to be paid immediately upon

making disclosure Time limit by which payment required to be

made if not immediately Wordings used – pays tax with interest Payment of interest suggests can be paid later CIT v. Mahendra C. Shah [2008] 299 ITR 305 (Guj)

Outer-limit before completion of assessment by which time AO needs to reach satisfaction whether to levy penalty

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Penalties

Penalty u/s.271(1)(c) Whether immunity available for earlier

years Explanation 5 – sub-clause (2) – immunity

available only if- Undisclosed income earned in year of search or Earlier year if due date for filing return has not

expired on date of search action Issue is whether immunity still available for

earlier years also CIT v. 1) Kanhaiyalal 2) Kanhaiyalal Saruparia [2008]

299 ITR 19 (Raj) CIT v. S.D.V. Chandru [2004] 266 ITR 175 (Mad) CIT v. Chhabra Emporium [2003] 264 ITR 249 (Del) ACIT v. Rupesh Bholidas Patel (2008) 16 DTR 369 (Ahd) –

Not available followed in ACIT v. Kirit D. Patel 121 ITD 159 (Ahd)(TM)

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Penalties

Penalty u/s.271(1)(c) Explanation 5A-

Inserted w.e.f. 1-6-2007, thus applicable to search action conducted on or after 1-6-2007

Found to be owner of assets or Income included in books of account Return filed before date of search but income

(whether recorded in books or not) not disclosed therein OR

No return of income filed before date of search action & due date expired

Deemed to be concealed income even if entries recorded in books of account

No reasonable cause provided for delay in filing return of income for non-levy of penalty

Analogy of Explanation 4(b) could be made for credit of payment of advance tax / TDS etc. – however no such specific relief provided

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Penalties Section 271AAA-

Inserted w.e.f. 1-6-2007, thus applicable to search action conducted on or after 1-6-2007 but before 1/7/2012

Penalty at 10% of undisclosed income of specified previous year/s – i.e. year of search or immediate prior year if due date of filing return u/s.139(1) not expired & no return filed (word used AO ‘may’ direct … assessee ‘shall’ pay)

Immunity given from levy of penalty @10% if- Disclosure is made in statement recorded u/s.132(4) &

specifies manner of earning such income Substantiates the manner of earning such income Pays tax with interest on such undisclosed income – no

outer limit – tax paid within time specified in 156 notice of demand – immunity available – DCIT v. Pioneer Marbles & Interiors P. Ltd. – 68 DTR 1 (Kol)

Provision of section 271(1)(c) not to apply in respect of the years covered u/s.271AAA

Undisclosed income defined – similar to one provided in s.158B(b) & also includes expenses found to be false

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Penalties

Section 271AAA- Immunity provision similar to provision in

Explanation 5, however with one exception Manner of earning income to be also

substantiated Issue is how to substantiate and till what

stage Since case of undisclosed income, may not have

any evidence to substantiate Substantiation may be required only in the course

of search action Substantiation only if asked / required by search

party while recording statement u/s.132(4)

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Penalties 271AAB

Applicable for search action initiated u/s.132 on or after 1/07/2012

(a) Penalty levied @10% of undisclosed income (UI) of specified previous year, if-

UI admitted in statement recorded u/s.132(4) and specifies the manner of earning income;

Substantiates the manner of earning UI; and On or before specified date-

Pays tax, together with interest, if any, on UI and Declare UI in the return of income furnished for

specified previous year

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Penalties

Penalty u/s.271AAB (b) Penalty levied @20% of undisclosed

income (UI) of specified previous year, if-

UI not admitted in statement recorded u/s.132(4);

On or before specified date- Declare UI in the return of income furnished for

specified previous year, and Pays tax, together with interest, if any, on UI

(c) Penalty minimum @30% and maximum @90% of UI of specified previous year, if not covered by (a) or (b).

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Penalties

Penalty u/s.271AAB Specified date means-

Due date of furnishing return u/s.139(1) or date specified in 153A notice

Specified previous year means previous year-

Ended before date of search but due date u/s.139(1) not expired and no return furnished; or

In which search was conducted

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Penalties Penalty u/s.271(1)(c) - General

Return of income not filed Penalty only if concealment of particulars or

furnishing inaccurate particulars Act of concealment committed with filing of

return In survey, additional income offered – return

not due – admitted income disclosed in return filed – no penalty

Dilip M. Shah Mum-ITAT (Unreported) Amirchand v. ITO 49 ITD 171 (Del) Vinod Goyal v. ACIT (2008) 115 TTJ 559 (Nag) DCIT v. Dr. Satish B. Gupta (2010) 42 SOT 48 (Ahd)

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Penalties

Penalty u/s.271(1)(c) – General Revised return offering income / conditional offer – to buy

peace & avoid litigation CIT v. Suresh Chandra Mittal [2001] 251 ITR 9 (SC) Ramnath Jagannath v. State of Maharashtra [1984] 57 STC

46, 51 (Bom) CIT v. Amalendu Paul (1984) 145 ITR 439 (Cal)

Income surrendered after detection by department, then levy of penalty justified-

CRN Investments (P.) Ltd. v. CIT [2008] 300 ITR 342 (Mad) CIT v. Mahabit Prasad Bajaj [2008] 298 ITR 109 (Jharkhand) Jyoti Laxman Konkar v. CIT [2007] 292 ITR 163 (Bom) – case

of survey where revised return of income was filed after detection by survey party

Income surrendered without detection by dept.- no penalty

Shree Nirmal Commercial Ltd. v. CIT [2008] 218 CTR 581 (Bom)

CIT v. Ashok Taker [2008] 170 Taxman 471 (Del)

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Penalties Penalty u/s.271(1)(c) – General

Penal provision – whether mandatory or discretionary - CIT v. Smt. P.K. Noorjahan [1999] 237 ITR 570 (SC) CIT v. P. Natarajan [2004] 266 ITR 219 (Mad) Hindustan Steel Ltd. v. State of Orissa [1972] 83 ITR 26 (SC)

Act on the basis of Legal advice / opinion – whether liable for penal provision -

T. Ashok Pai v. CIT [2007] 292 ITR 11 (SC) Dilip N. Shroff v. JCIT [2007 291 ITR 519 (SC)

Disallowance of expenses – whether penalty justified CIT v. Ajaib Singh & Co. [2002] 253 ITR 630 (Punj. & Har.) CIT v. Goyal Gases (P.) Ltd. [2000] 241 ITR 451 (Delhi) J.K. Jajoo v. CIT [1990] 181 ITR 410, 412 (MP) CIT v. Nepani Biri Co. Trust [1991] 190 ITR 402, 403 (All)

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Debatable issue – not a ground for levy of penalty -

Devsons P. Ltd. v. CIT [2010] 329 ITR 483 (Del) CIT v. Harshvardhan Chemicals & Minerals Ltd. [2003]

259 ITR 212 (Raj.) CIT v. Ram Singhani Dall Mills [2002] 254 ITR 264 (MP) Chandrapal Bagga v. ITAT [2003] 261 ITR 67 (Raj.) CIT v. Calcutta Credit Corporation (1987) 166 ITR 29

(Bom) ACIT v. Porrittis & Spencer (A) Ltd. (2008) 22 SOT 281

(Del)

Disallowance of deductions – partly or wholly CIT v. International Audio Visual Co. 288 ITR 570 (Del) CIT v. Nath Bros. Exim International Ltd. 288 ITR 670

(Del) CIT v. Caplin Point Laboratories Ltd. 293 ITR 524 (Mad)

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Estimation of GP / income CIT v. Ample Properties Ltd. [2011] 335 ITR

460 (Mad) CIT v. Sangur Vanaspati Mills Ltd. [2008] 303

ITR 53 (P & H) – SLP rejected [2009] 308 ITR (St.) 18

Harigopal Singh v. CIT (2002) 258 ITR 85 (P&H)

CIT v. Kailash Crockery House (1999) 235 ITR 544 (Pat)

Rajan H. Shinde v. DCIT (2006) 103 ITD 360 (Pune)(TM) – case of search however material found not specifically showing discrepancy in GP

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Jurisdiction Point- Jurisdiction issue can be raised in penalty proceedings

– even for first time If assessment not valid for any reason however not

challenged – same can be challenged for ground of levy of penalty and only for deletion of penalty & not for quashing assessment itself

ACIT v. Smt. Surinder Kaur (2009) 18 DTR 38 (Luck)/120 TTJ 618 – case of assessment u/s.153A

Tide Water Marine International Inc. v. DCIT (2005) 96 ITD 406 (Del) – case of reassessment

Union of India v. Rai Singh Dal Singh 88 ITR 200 (SC) CIT v. Dumravan Cold Storage & Refrigerators Services

97 ITR 137 (Pat) CIT v. Hotel Highland Park (2000) 246 ITR 130 (J&K) Sambha R. Dalwati v. ITO 34 ITD 183 (Ahd)

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Limitation for passing penalty order – sec.275 Prior to proviso inserted by Finance Act 2003, w.e.f. 1/6/2003

AO could have waited until disposal of appeal by ITAT Outer limit was six months from the end of the month in which order of

CIT(A) or Tribunal is received by CC / CIT After insertion of proviso-

Outer limit of passing penalty order – Before expiry of FY in which proceedings initiated; or If appeal preferred – within one year from the end of FY in which

the CC / CIT receives order passed by CIT(A) (on or after 1-6-2003) Applicable to date of passing order and not with respect to particular

assessment year No more to wait till outcome of Tribunal appeal – is one view CIT(A) order passed after 1-6-03 – served on CC on 8-8-03, penalty order

passed on 31/3/05 time-barred Tarlochan Singh & Sons (HUF) v. ITO (2008) 114 TTJ 82 (Asr) Similar view - Naresh Kumar Gupta v. ITO (2009) 20 DTR 565 (Del)–

CIT(A) dismissed quantum appeal as time-barred (delay not condoned) – held assessment order not subject matter of appeal

Proviso only clarifies if no appeal preferred to Tribunal but if appeal preferred to Tribunal, then proviso does not override main provision and thus time limit is available from passing of Tribunal order – CIT v. Mohair Inv. & Tdg P. Ltd. (Del) – order dated 30/9/2011

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Penalty u/s.271(1)(c) - some issues

Return of income not due, whether liable to penalty – case of survey

Penalty only if concealment of particulars or furnishing inaccurate particulars

Act of concealment committed with filing of return

In survey, additional income offered – return not due – admitted income disclosed in return filed – no penalty

CIT v. SAS Pharmaceuticals [2011] 335 ITR 259 (Del)

Dilip M. Shah Mum-ITAT (Unreported) Amirchand v. ITO 49 ITD 171 (Del) Vinod Goyal v. ACIT (2008) 115 TTJ 559 (Nag) DCIT v. Dr. Satish B. Gupta (2010) 42 SOT 48

(Ahd)

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Penalty u/s.271(1)(c) - some issues Disclosure of income in survey for earlier

years – Revised return filed offering income - whether liable for penalty Silver Palace v. ITO [1999] 68 ITD 550 (Pune) –

held no discrepancy found in survey and revised return filed on assurance of officers that no penalty would be levied – penalty deleted

CIT v. V. Narashima Prasad [2001] 250 ITR 852 (Kar) – held, no substantial question of law arises – Tribunal given finding that assessee had not concealed particulars of income

Jyoti Laxman Konkar v. CIT [2007] 292 ITR 163 (Bom) – held, discrepancy detected during survey – original return filed dishonestly – revised return filed out of compulsion after detection during survey – levy of penalty justified

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Issues Whether levy of penalty only on the basis of statement

recorded in survey? Statement taken in survey – no evidentiary value

Paul Mathew & Sons v. CIT [2003[ 263 ITR 101 (Ker) CIT v. S. Khader Khan Sons [2008] 300 ITR 157 (Mad) Unitex Products Ltd. v. ITO [2008] 22 SOT 429 (Mum) DCIT v. Premsons (2010) 130 TTJ 159 (Mum)

Disclosure made in statement and then retracted, how far valid for levy of penalty?

No material found in survey – income offered in return then enhanced disclosure made by revised return – no penalty-

Dilip Yeshwant Oak v. ACIT (2011) 138 TTJ 559 (Pune) DCTI v. Bhanwarlal Mahnedra Kumar Soni (2011) 138 TTJ 381

(Jodh) Instruction of CBDT – no confession statement to be

recorded in search/survey proceedings- rely only on evidences gathered

M/s. Rupa Prop. & Securities P. Ltd. v. ACIT, ITA No.2700/Mum/2010, AY 2007-08, Bench ‘D’, order dated 22/9/2010 – Held, no addition merely on basis of statement without any evidence – confession not to be recorded as per instructions of CBDT

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Penalties Sec. 271D & 271E

Triggers only if provisions of sec.269SS & 269T attracted

Provision introduced as a deterrent from explaining unaccounted cash found as representing cash loans or deposits, etc.

ADI (Inv.) v. Kum. A.B. Shanthi [2002] 255 ITR 258 (SC) – on constitutional validity – held valid – but discussed in detail the objects of provisions and as to the reasonable cause

Also for debarring cash transactions in order to unearth evasion of tax

Provision attracted if loan or deposit accepted or repaid in cash in excess of Rs.19,999.99

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Levy of penalty is independent of assessment proceedings

Not necessary to initiate in assessment proceedings

ACIT vs. Vinman Finance & Leasing Ltd. (2008) 115 ITD 115 (VISK.) (TM)

Covered by sec.273B Existence of reasonable cause / bona fide belief

– penalty not attracted (genuineness, identity, business exigency, not for tax evasion, etc)

Eetachi Agencies 248 ITR 525 (Bom) CIT v. Lakshmi Trust Co. [2008] 303 ITR 99 (Mad) Karnataka Ginning & Pressing Factory v. JCIT (2001) 77

ITD 478 (Mum) ITO v. Prabhulal Sahu [2006] 99 TTJ 177 (Jd)

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Penalties – Ss.271D & 271E Adjustment by book entries – whether provision

attracted intention to curb cash transactions i.e. unearthing of

black money by curbing transactions made in cash Book entries do not contain actual movement of funds

but merely adjusts accounts inter-se parties concerned

CIT v. Noida Toll Bridge Co. Ltd. (2003) 262 ITR 260 (Del) CIT v. Govind Kumar (2002) 253 ITR 103 (Raj) CIT v. Natvarlal Purshottamdas Parekh [2008] 303 ITR 5

(Guj.) CIT v. Bombay Conductors & Electricals Ltd. [2008] 301

ITR 328 (Guj) ACIT v. Jag Vijay Auto Finance (P) Ltd. (2001) 78 ITD 378

(Jp.) - Held that where amount wad deposited through bank by transfer voucher, there is no violation of section 269SS; object of section is to counter the device of taking unaccounted cash or unaccounted deposit

However, contrary view taken by Bombay HC in CIT v. Triumph International Finance (I) Ltd. 345 ITR 270 (Bom)

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Whether both the provisions are independent of each other

Penalty for 2 separate defaults One for acceptance in cash Second for repayment in cash

Thus, provisions attract independently and even if case of cycle with the same party

Cash directly deposited in bank account of party – whether case covered by provisions

Sri Renukeswara Rice Mills v. ITO [2005] 93 ITD 263 (Bang) – fulfils the object of s.40A(3) – provisions similar, hence ratio would apply

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Penalties Penalty u/s.271C

If there is reasonable cause – penalty not leviable

CIT v. M/s. Eli Lilly & Co. (India) P. Ltd. (SC) (2009) 178 Taxman 505 (SC)

DCIT v. SMS India Ltd. (2006) 7 SOT 424 (Mum)

ITO v. Muthoot Financiers (2006) 103 ITD 108 (Kochi) – also on ground of bona fide belief

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Interest

Nature of interest - Is compensatory since ex-chequer deprived of legitimate dues by non-payment of tax in time

Chargeability of interest – Is mandatory – no discretion to officer to not to levy interest - CIT v. Anjum M.H. Ghaswala (2001) 252 ITR 1 (SC)

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Thank You

Documents

1 Penalty & Interest under Income-tax Act WIRC 13/07/2012 CA. Reepal G. Tralshawala [email protected]