Kanhaiyalal Dudheria Vs Chief Commissioner of Income Taxes (Karnataka High Court)
The Karnataka High Court examined the legality of an order passed under Section 119(2)(a) of the Income Tax Act, 1961, by which a request for waiver of interest levied under Section 234C for the assessment year 2008–09 was partly rejected. The petitioner, a partnership firm engaged in iron ore mining, contended that its business remained dormant for several years and commenced only after renewal of the mining licence in the later part of the financial year. Interest under Section 234C was levied for non-payment of advance tax instalments, and waiver was sought by relying on Section 119(2)(a) read with the CBDT order dated 26.06.2006.
In the impugned order dated 15.09.2022, the authority denied waiver of interest relating to the second and third advance tax instalments on the ground that the assessee had failed to establish that the income was neither anticipated nor contemplated, as required under the CBDT instructions. The petitioner challenged this part of the order as arbitrary and unreasoned, arguing that the authority failed to undertake an instalment-wise factual examination mandated by the CBDT order. It was asserted that the income accrued only after commencement of mining operations and after the due dates of the relevant instalments, bringing the case within the parameters for waiver.
