2017 (9) TMI 1353 - HC - Income Tax

Petition u/s 119(2)(a) seeking waiver of interest u/s 234C - non-payment of installment of advance tax - due to receipt of extra-ordinary item of income the company has become liable to pay tax u/s.115JB - Held that - In the present case the moment an order favourable to the petitioner-assessee was passed by the Hon ble Supreme Court on 15-07-2013 directing the HSBC to pay the amount of 102, 59, 36, 115/- which was deposited by the HSBC Bank with the Registry of the Hon ble Supreme Court followed by order dated 05-08-2013 to release the amount and which fund was released to the petitioner-assessee on 03-10-2013 that amount of 102, 59, 36, 115/- became assessable to tax under Section 115JB of the Income Tax Act 1961. After the said order passed by the Hon ble Supreme Court on 15-07-2013 followed by order dated 05-08-2013 the assessee-Company could not have contended that it could not anticipate the accrual of income under Section 115JB of the Act and therefore it ought to have paid advance tax installments taking into account such accrued income for the quarter ending 15-09-2013. Having not paid that amount the interest liability under Section 234C of the Act automatically stood attracted. Chief Commissioner has already granted 100% waiver for non-payment of advance tax on this amount for the quarter end of 15-06-2013 amounting to 5, 05, 359/- which the assessee perhaps deserved in the facts and circumstances of the case. But thereafter merely because the review petition came to be filed by the HSBC Bank which was ultimately dismissed by the Hon ble Supreme Court vide Annexure-3 dated 03-12-2013 the assessee-company could not have prayed for waiver of interest under Section 234C of the Act for the quarter ending 15-09-2013. Therefore the impugned order passed by the respondent-Chief Commissioner appears to be perfectly just and legal and does not require any interference by this Court.

Summary

Issues:
Challenge to order of waiver of interest under Section 234C of the Income Tax Act.

Analysis:
The petitioner challenged the order passed by the Chief Commissioner of Income Tax, Bengaluru, granting partial relief of waiver of interest under Section 234C of the Income Tax Act. The petitioner sought waiver of interest for the quarter ending 15-06-2013 and 15-09-2013 due to extraordinary income received post the due date for payment of advance tax installments. The Assessing Officer and Principal Commissioner supported the waiver application based on the circumstances of the case. The waiver of interest under Section 234C is governed by CBDT's order dated 26-06-2006.

The High Court analyzed the facts and circumstances of the case. The income in question accrued when the Supreme Court passed an order directing payment to the petitioner. The petitioner argued that since a review petition was pending, they could not anticipate the accrued income while paying advance tax for the quarter ending 15-09-2013. However, the Court found no error in the Chief Commissioner's order, as the income became assessable to tax post the Supreme Court's order, and the petitioner should have paid advance tax considering the accrued income.

The Court noted that the Chief Commissioner had already granted 100% waiver for non-payment of advance tax for the quarter ending 15-06-2013, which was justified. The dismissal of the review petition by the Supreme Court did not warrant waiver of interest under Section 234C for the quarter ending 15-09-2013. Therefore, the Court upheld the Chief Commissioner's decision as just and legal, dismissing the petitioner's challenge.

In conclusion, the High Court found the petition devoid of merits and dismissed it, upholding the Chief Commissioner's order.