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2020 (5) TMI 439 - HC - Income TaxWaiver of interest charged u/s 234A 234B and 234C - delay caused in filing the return - HELD THAT - In the case of Bhanuben Panchal and Chandrikabel Panchal Vs. Chief Commissioner of Income Tax 2004 (3) TMI 35 - GUJARAT HIGH COURT while examining the waiver of interest in the context of the death of the husband of the petitioner who was in a senile condition prior to his death held that the delay caused in filing the returns on account of the delay in arranging for funds would also qualify to be considered as unavoidable circumstances responsible for the delay in late payment of taxes and accordingly waiver of interest would be granted to the extent of 75%. Utmost the delay caused in filing the return if to be attributed to the impounding of the documents during survey proceedings the interest under section 234-A for the default committed in filing the return of income would be waived of but not the interest leviable u/s 234B and 234C the default in payment of advance tax and for deferment of advance tax. Writ petition stands disposed of with a direction to the respondent to waive of the interest under Section 234A of the Act relating to the assessment year 2010-11. Levy of interest under Section 234B and 234C is confirmed.
Issues:
Challenge to orders dated 26.9.2016 and 10.11.2016 for assessment years 2009-10 and 2010-11, seeking waiver of interest under sections 234A, 234B, and 234C of the Income Tax Act, 1961. Analysis: Issue 1: Challenge to Orders The petitioner challenged orders related to the assessment year 2010-11, seeking a waiver of interest charged under sections 234A, 234B, and 234C of the Income Tax Act, 1961, passed by the respondent. The petitioner engaged in pawn broking business in Mysore and filed for a waiver of interest, which was declined by the Chief Commissioner of Income Tax, Bengaluru, leading to the writ petition. Issue 2: Interpretation of CBDT Circular The petitioner argued that the CBDT Circular dated 26.06.2006 should be applied broadly to waive interest due to unavoidable circumstances, citing delays in filing the return of income after a survey conducted under Section 133A of the Act. The petitioner contended that the phrase "or otherwise" in the circular should encompass survey proceedings under Section 133 of the Act, seeking relief based on the intent of the circular. Issue 3: Application of CBDT Instructions The revenue contended that the phrase "or otherwise" in the CBDT Circular was intended for situations involving requisition and seizure under Section 132-A, not applicable to the present case where the petitioner admitted taxes post-survey. The revenue argued that interest was levied for defaults in filing returns and advance tax payments, which were not mitigated by the circumstances of the survey. Issue 4: Judicial Precedents The petitioner relied on specific judgments to support their case, emphasizing the need for a wider interpretation of the circular to alleviate hardships faced by the assessee. However, the revenue differentiated the present case from the cited judgments, highlighting the specific circumstances and legal contexts of each case. Issue 5: Court's Decision The Court analyzed the CBDT instructions comprehensively, emphasizing the mandatory requirements for waiver of interest under the circular. The Court found that while the delay in filing the return may be attributed to the survey proceedings, it did not warrant a complete waiver of interest under sections 234B and 234C. Consequently, the Court directed the respondent to waive interest only under Section 234A for the assessment year 2010-11, confirming the levy of interest under sections 234B and 234C. The judgment was disposed of accordingly, considering the specific circumstances and legal provisions applicable to the case.
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