Case Law Details
Brief of the Case
High court held In the case of The Fertilizers and Chemicals Travancore Ltd. vs. DCIT & CCIT that the CCIT is empowered and authorized to waive interest under section 234C only if the assessee case falls any of the two cases mentioned in notification dated 26/6/2006 for the income tax authorities to exercise the power under section 119(2)(a). The present case does not fall any of these two cases. Also the liability to pay interest has already confirmed by the orders of CIT (A) and ITAT.
Facts of the Case
The assessee was a public sector undertaking. It filed its return showing a book profit of Rs. 3, 61, 32,102 under section 115J. During assessment, it was found that there is shortfall in the payment of advance tax and accordingly interest u/s 234C charged. The assessee went into the appeals in which levy of interest was upheld by the CIT (A) and ITAT. Subsequently the assessee approached to the CCIT for waiver of interest levied u/s 234C by invoking his powers u/s 119(2)(a). The CCIT dismissed the petition on the ground that levy of interest is already upheld by the CIT (A) and ITAT. Also the case of assessee does not fall under the cases specified by the CBDT in notification dated 26/6/2006 for the income tax authorities to exercise the power under section 119(2)(a).
Contention of the Assessee
The ld. Counsel for the Assessee relied on the judgment of Kwality Biscuits Ltd. v. Commissioner of Income tax that since the book profit cannot be determined before the end of relevant assessment year, it is not feasible to calculate the correct amount of advance tax liability on the book profits.
Contention of the Revenue
The CCIT dismissed the petition on the ground that levy of interest is already upheld by the CIT (A) and ITAT. Also the assessee would not fall under the cases specified in notification dated 26/6/2006 for the income tax authorities to exercise the power under section 119(2)(a).
Held by CIT (A)
The levy of interest u/s 234C was upheld by the CIT (A).
Held by ITAT
The order of first appellate authority was confirmed by the ITAT.
Held by High Court
The High Court held that the classes of incomes and cases in respect of which the CCIT is authorized to waive interest is mentioned in notification dated 26/06/2006. As per notification there are 2 cases where request for waiver of interest can be accepted. First, if there is any income other than Capital gain is received or accrued after due date of payment of the first or subsequent installment of advance tax which was neither anticipated nor was in the contemplation of the assessee and advance tax on such income is paid in the remaining installment, second in the case liability of interest is arise due to retrospective amendment of law or decision of the Supreme court of India or as the case may be, a decision of a larger bench of the jurisdictional High court. The assessee has no case out of these cases. The decision relied by the ld. Counsel is not a decision rendered in the context of the authority of the income tax officers to waive interest under section 119 which is the issue in this appeal.
Accordingly appeal was dismissed.
