Daily Archives: July 12, 2012


CIT v Fortis Financial Services Ltd [ITA Nos.243/2011 & 244/2011] (Delhi HC) Background: The assessee was engaged in business of providing financial services. During the assessment proceedings, the AO observed that an amount of interest of Rs 46,63,619/- was not included in the return. Similarly, Rs.4,13,82,323/- and Rs.5,28,16,681/- towards ‘bill discounting charges’, in respect of assessment years 1996-97 and 1997-98 were not included and therefore, added these amounts in his assessment order. Simultaneously, penalty proceedings were initiated for concealment and/or furnishing of inaccurate particulars. AO levied penalty, in respect of two assessment years and after considering the reply, passed two orders under Section 13 of the Act imposing the penalty for concealment or furnishing accurate particulars of chargeable interest. The CIT (A), deleted the said penalty on the ground that the issue/question raised related to honest and bona fide difference of legal opinion on whether bill “discounting charges” should be treated as interest or not for the purpose of the said Act. The tribunal upheld the said decision.

Penalty – Where two legal views are not plausible, assessee cannot contend it to be ...