INCOME TAX ACT, 1961

--Interest under section 234B/234C--Waiver or reduction Retrospective amendment in section 80HHC--Assessee filed a return of income declaring certain income after claiming deduction under section 80HHC. AO denied deduction on the ground that assessee had suffered loss in export business and that interest received and rental income had been included for computing the said deduction. Interest under section 234B was directed to be levied. Assessee contended that interest under sections 234B and 234C became chargeable due to unforeseen retrospective amendments to section 80HHC. Assessee filed an application under sections 234B and 234C for waiver of interest before the CIT, which had been rejected on ground that request for waiver of interest was not covered either by CBDT Circulars dated 23-5-1996, 30-1-1997 or the Circular No. 2/2006. Held: There was a dispute about interpretation of section 80HHC but there was no decision of the jurisdictional High Court. Thus Circular dated 23-5-1996 and 30-1-1997 was not applicable. Reliance placed by assessee on Circular No. 2/2206, dated 17-1-2006 was also misconceived. CIT was right in rejecting the application for waiver of interest. As a result of insertion of proviso to section 80HHC assessee became entitled to deduction under section 80HHC of certain amount and therefore, assessee's contention was not acceptable that retrospective amendemnt to section 80HHC was detrimental to him.

Income Tax Act, 1961 Section 234B

Income Tax Act, 1961 Section 234C

Income Tax Act, 1961 Section 80HHC