Law:

Section:

Section 158BFA of the Income-tax Act, 1961 - Block assessment in search cases - Levy of interest and penalty in certain cases - Whether section 158BFA(2) is directory and not mandatory - Held, yes FACTS The issue arose for consideration in the instant appeal was whether section 158BFA(2) is directory or mandatory. HELD The terminology of the said section 158BFA(2) makes it clear that there is discretion in the Assessing Officer to direct payment of penalty. The proviso supports this interpretation. Only if the authority decides to impose penalty then, it will not be less than the tax leviable but shall not exceed three times the tax so leviable. It is, therefore, not possible to accept the submission on behalf of the revenue that once the Assessing Officer comes to the conclusion that there is a breach of the mandate of section 158BFA(1), then the penalty should be imposed. Merely because the expression used is shall not be less than the amount of tax leviable or not exceeding three times the tax, does not result in reading the first part of the section as mandatory. The proviso to the sub section makes it clear that there is discretion conferred on the Commissioner for the reasons which are set out therein. Whilst considering taxing statute, the Supreme Court has held that it is settled law that the expressions used in a taxing statute would ordinarily be understood in the sense in which it is harmonious with the object of the statute to effectuate the legislative intention. It is equally settled law that, if the language is plain and unambiguous, one can look fairly at the language used and interpret it to give effect to the legislative intention. Tax law, nevertheless, have to be interpreted reasonably and in consonance with justice adopting a purposive approach. Therefore, the view taken by Tribunal that the section is directory and not mandatory, was to be upheld. [Para 3] CASE REFERRED TO : CIT v. Gwalior Rayon Silk Manufacturing Co. Ltd. [1992] 196 ITR 149 / 62 Taxman 471 (SC) (Para 3). B.M. Chatterjee and Mrs. Poonam Bhosale for the Appellant.Atul Jasani and P.C. Tripathi for the Respondent. ORDER F.I. Rebello, J. Admit on the following two questions :…

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