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Issues involved: Petitioner seeking waiver of interest levied under sections 234B and 234C of the Income-tax Act, 1961 after falling ill and passing away of managing partner during the Voluntary Disclosure of Income Scheme, 1997.
Summary: The petitioner, a construction firm, sought waiver of interest under sections 234B and 234C of the Income-tax Act, 1961 due to unavoidable circumstances arising from the managing partner's illness and subsequent demise during the Voluntary Disclosure of Income Scheme, 1997. The second respondent issued a notice under section 148 for reassessment, which the petitioner complied with by paying the tax due. The first respondent rejected the petitioner's claim for waiver of interest, leading to the present petition to quash the order. The court acknowledged that the petitioner had paid the tax as demanded after reassessment, and that the managing partner's illness and death were not disputed by the respondents. While the respondents argued that interest levy was mandatory in case of default, the court noted that the first respondent had the authority to reduce or waive interest based on the circumstances. The court found that the first respondent erred in not considering the unavoidable circumstances of the managing partner's demise and the petitioner's compliance with reassessment, leading to the decision to set aside the impugned order and direct the first respondent to waive the interest levied. In conclusion, the writ petition was allowed, the impugned order was set aside, and the first respondent was directed to waive the interest levied. No costs were awarded, and the connected W.P.M.P. was closed.
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