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2020 (1) TMI 1137 - HC - Income TaxWaiver of interest u/s 12-A of the Interest Tax Act - HELD THAT:- The power to grant waiver from payment of interest under the Income Tax Act, 1961 stems from sub-clause (2) (a) to section 119. The Central Board of Direct Taxes has also delegated such powers in certain cases up to particular amount with the Principal/Chief Commissioner of Income Tax. Since Section 119 of the Income Tax Act has not been incorporated in Section 21 of the Interest Tax Act, 1954, the petitioner cannot claim the benefit of the above circular for waiver of interest. Therefore, in absence of any power to grant waiver of interest under the provisions of the Interest Tax Act, 1974, the 1st respondent cannot grant waiver to an assessee under the provisions of the said Act. That apart, the authority has also decided that the petitioner was not entitled for waiver under the said circular since Finance Act No.2 of 1991 had extended the scope of interest tax to cover “credit institutions” and thus financial companies carrying on high purchase transactions were brought within the ambit of the Interest Tax Act, 1974. The petitioner also filed returns but failed to pay tax on such interest. Though, the 1st respondent has denied the benefit of the above circular on merits, it is evident that the said circular cannot be made applicable to waiver of interest under the provisions of the Interest Tax Act, 1974 in absence of any statutory backup.
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