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October 2015

[2015] 60 taxmann.com 152 (Kerala HC) – Akbar Travels of India (P) Ltd. vs. CCE, Thiruvananthapuram

By Puloma Dalal
Jayesh Gogri
Mandar Telang Chartered Accountants
Reading Time 1 mins
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Once section 80 is held applicable; all penalties u/s. 76, 77 & 78 must be waived.

Facts:
The Tribunal took a view that the Appellant is entitled to benefit of section 80 of the Finance Act 1994. However in terms of final order, the penalty u/s. 78 was deleted and only penalty u/s. 76 was retained. Therefore, a rectification application was filed before the Tribunal that penalty u/s. 76 ought to have been deleted. The application was disposed off clarifying that only penalty u/s. 78 was meant to be deleted. Aggrieved by the same, appeal was filed before the High Court.

Held:
The High Court held that section 80 opens with nonobstante clause. Once the assessee proves that there was reasonable cause for the said failure, section 80 starts to operate insulating imposition of all the penalties stated therein viz. penalties u/s. 76, 77 and 78 of the Finance Act, 1994. Allowing the appeal, High Court also held that having considered the said provisions of law and in terms of specific findings of the Tribunal in its order regarding applicability of section 80 the rectification application must succeed.

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