9911796707
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Issues:
1. Quashing of order dated December 22, 1994, under section 7C of the Companies (Profits) Surtax Act, 1964. 2. Waiver/reduction of interest charged by respondent under section 7C for the assessment year 1987-88. 3. Interpretation of statutory provisions under the Companies (Profits) Surtax Act and Income-tax Act. 4. Application of the proviso to section 43B of the Income-tax Act. 5. Assessment of interest under section 7C in light of the retrospective nature of the proviso to section 43B. Analysis: 1. The petitioner sought a writ of certiorari to quash the order dated December 22, 1994, passed by the Commissioner of Income-tax under section 7C of the Companies (Profits) Surtax Act, 1964. The petitioner argued for a complete waiver of interest levied by the Deputy Commissioner of Income-tax, Ghaziabad, for the assessment year 1987-88. The court examined the provisions of the Act and Rules governing the computation of chargeable profits and the payment of surtax, emphasizing the importance of statutory deductions and advance tax payments under sections 7A and 7C. 2. The petitioner filed an estimate of chargeable profits and paid advance surtax as per the law. Disputes arose when the Deputy Commissioner assessed higher chargeable profits, leading to a surtax demand and interest under section 7C. The petitioner claimed waiver under rule 13C, which was partially granted. Subsequent revisions to the return based on sales tax liabilities were made. The court analyzed the petitioner's compliance with the law and the retrospective application of the proviso to section 43B of the Income-tax Act in determining the interest liability. 3. The court referenced the Supreme Court's decision in Allied Motors (P.) Ltd.'s case to establish the retrospective nature of the proviso to section 43B, emphasizing that no interest should be payable under the Companies Profits (Surtax) Act if statutory liabilities were met within the prescribed period. The court highlighted the petitioner's adherence to legal requirements and the absence of any shortfall in advance tax payments, ultimately leading to the quashing of the interest levied under section 7C. 4. It was determined that the petitioner's actions were in good faith, considering the legal complexities surrounding the interpretation of tax laws and amendments. The court acknowledged the petitioner's mistaken belief regarding the disallowance of sales tax under section 43B and the subsequent revisions to the return. The judgment emphasized the petitioner's lack of culpability in the matter and the need for interest waiver based on genuine errors in compliance. 5. Consequently, the court allowed the writ petition, quashing the impugned orders and directing the refund of any amounts paid by the petitioner. The judgment underscored the retrospective effect of statutory provisions and the importance of considering bona fide mistakes in tax compliance. No costs were awarded in the case, highlighting the equitable resolution of the dispute.
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