Reduction or waiver of interest. - Income Tax - 1695/CBDT

INSTRUCTION NO. 1695/CBDT Dated: February 13, 1981 Consequent upon the rationalisation of the rates of personal Income-tax and Corporation-tax by the Finance Act, 1985, the Board issued circulars No. 423 dated 26-6-1985, No. 432 dated 20-9-1985, No. 440 dated 15-11-85 and No. 441 dated 15-11-85, with a view to encouraging the assessees to file a higher and true return of income voluntarily for the current and earlier years and pay tax thereon by 31-3-1986. 2. Some of the return filed in pursuance of the aforesaid instructions may in the normal course attract the provisions relating to levy of interest under Section 139(8)/215 or 217 of the Income-tax Act. 3. According to Rule 40(5) of the Income-tax Rules, 1692 in any case, in which the IACs consider that the circumstances are such that a reduction or waiver of Interest payable under section 215 or 217 is justified, he may reduce or waive the interest. These provisions should be invoked liberally in the kind of cases referred to in the preceding paragraphs. For the purposes of Rule 117 A(v), the fact that further income is now disclosed and tax paid thereon by 31.3.1986 in terms of the aforesaid Circulars, prior to its detection by the assessing authority, should be deemed to be sufficient evidence to show that the assessee was prevented by sufficient cause from furnishing the Return within time for the purposes of waving interest otherwise leviable under section 139. 4. These instructions may be brought to the notice of all officers working under your charge.