Penalty under Interest Tax Act not leviable absent concealment or inaccurate particulars; bona fide belief and disclosed records mattered.

Penalty under section 13 of the Interest Tax Act, 1974 was not attracted where the assessee initially did not file returns but later filed them after notice, the returns were accepted on the returned figures without addition, and the record showed no mala fide intention, concealment, or furnishing of inaccurate particulars. The authorities accepted the assessee's bona fide belief that it was not liable to interest tax, and the relevant interest income particulars were already available on record. The Gujarat HC also noted that Explanation 3 to section 271(1)(c) of the Income-tax Act, 1961 could not be imported into penalty proceedings under the Interest Tax Act. On these facts, deletion of penalty was upheld.

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Issues: Whether penalty under section 13 of the Interest Tax Act, 1974 was exigible where the assessee had not filed the return initially but later filed returns after notice, the returns were accepted without addition, and the authorities found no mala fide intention or concealment.

Analysis: The assessee's explanation that it was not liable to interest tax was accepted by the assessing authority, and the returns ultimately filed were assessed on the returned figures without any addition. The appellate authorities concurrently held that the relevant interest income particulars were already available on record, that the assessee acted under a bona fide belief, and that there was no deliberate concealment or furnishing of inaccurate particulars. The Court also held that the deeming principle in Explanation 3 to section 271(1)(c) of the Income-tax Act, 1961 could not be applied to penalty proceedings under section 13 of the Interest Tax Act, 1974, and that penalty under section 13 could arise only where concealment of chargeable interest or furnishing of inaccurate particulars was established.

Conclusion: Penalty under section 13 of the Interest Tax Act, 1974 was not leviable on the facts, and the Tribunal was correct in upholding deletion of penalty.

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