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| The Tax Publishers2020 TaxPub(DT) 0657 (Mad-HC) : (2020) 274 TAXMAN 0432 INCOME TAX ACT, 1961
Section 234B
Where CBDT issued circular in the exercise of powers vested under section 119(2) (a) and circular has to be read strictly and normally, there cannot be any addition or substitution by the authority concerned while entertaining the application for waiver of interest under section 234A, 234B or 234C and CBDT perhaps could have considered these factors, therefore, order was liable to be set aside and matter was remanded back to AO to re-examine the issue afresh.
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Interest under section 234B - Waiver of interest under section 234B - Rejection of application for waiver in violation of CBDT circular -
Assessee, an exporter of leather products, had assumed that it was not liable to pay income tax and therefore had failed to pay advance tax on such export turnover and later claimed exemption under section 80HHC. For the assessment years 1992-93 to 1994-95, returns filed by assessee were accepted after processing same under section 143(1). Thereafter, assessments were reopened under section 148. Orders came to be passed under section 147. For the assessment years 2002-03 and 2004-05, returns were processed and assessments were completed under section 143(3) by re-computing the relief under section 80HHC by partially granting refund of total income. Since there was a delay in payment of advance tax, assessee was called upon to pay interest under section 234B. Held: CBDT issued the circular in the exercise of powers vested under section 119(2)(a) and circular has to be read strictly. Normally, there cannot be any addition or substitution by the authority concerned while entertaining the application for waiver of interest under section 234A, 234B or 234C. Assessee could legitimately state that it was entitled to take a bona fide view that it was eligible for exemption from payment of tax and/or claim deductions under section 80HHC. CBDT perhaps could have considered these factors and such eventualities while issuing the said circular. However, it has restricted to specified instances for grant of waiver. Therefore, order was liable to be set aside and matter was remanded back to AO to re-examine the issue afresh.
REFERRED : IPCA Laboratory Ltd. v. DCIT (2004) 266 ITR 0521 (SC) : 2004 TaxPub(DT) 1472 (SC) N. Haridas And Company v. CCIT & Another 2007 SCC OnLine 1061 : 2008 TaxPub(DT) 0544 (Mad-HC) CIT v. Nameel Leathers And Uppers (2005) 23 ITR 350 (Mad) : 2005 TaxPub(DT) 0907 (Mad-HC) and CIT v. Shirke Construction Equipments Ltd. (2000) 246 ITR 429 (Bom) : 2000 TaxPub(DT) 1469 (Bom-HC)
FAVOUR : Matter remanded
A.Y. :
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