TMI BlogReduction or Waiver of Interest u/s 234A/234B/234CX X X X Extracts X X X X X X X X Extracts X X X X ..... a return of income furnished for the said previous year or is otherwise disclosed to the Assessing Officer; and ( b ) the tax attributable to such income has been paid; ( ii ) Period ( a ) in respect of interest under section 234A from the date immediately following the due date for furnishing the return of income for the relevant assessment year till the end of the month in which the relevant order giving rise to the relevant income is passed; ( b ) in respect of the interest under section 234B, from the first day of April of the relevant assessment year till the end of the month in which the relevant order giving rise to the relevant income is passed; ( c ) in respect of interest under section 234C, for the period mentioned in that section; ( iii ) Extent of interest to be reduced or waived The quantum of interest to be reduced or waived shall be the difference between : ( a ) the interest computed for the period mentioned at ( ii ) above with reference to the tax on the total income inclusive of the relevant income; and ( b ) the interest computed for the same period with refer ence to the tax on the total income as reduced by the relevant in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to be utilised for payment of advance tax instalment or instalments as they fall due after the seizure of cash and the assessee has not paid fully or partly advance tax on the current income and the Chief Commissioner or the Director-General is satisfied that the assessee is unable to pay the advance tax. ( c ) Where any income chargeable to income-tax under any head of income, other than "capital gains" is received or accrues after the due date of payment of the first or subsequent instal ments of advance tax which was neither anticipated nor was in the contemplation of the assessee and the advance tax on such income is paid in the remaining instalment or instalments and the Chief Commissioner or Director-General is satisfied on the facts and circumstances of the case that this is a fit case for reduction or waiver of interest chargeable under section 234C of the In come-tax Act. ( d ) Where any income which was not chargeable to income-tax on the basis of any order passed in the case of an assessee by the High Court within whose jurisdiction he is assessable to income-tax, and as a result, he did not pay income-tax in relation to such income in any previous year and subsequ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... trospective amendment of law or as the case may be, the decision of the Supreme Court, in his own case, which event has taken place after the end of any such previous year, in any assessment or re-assessment proceedings the advance tax paid by the assessee during the financial year immediately preceding the relevant assessment year is found to be less than the amount of advance tax payable on his current income, the assessee is chargeable to interest under section 234B or section 234C and the Chief Commissioner or Director General is satisfied that this is a fit case for reduction or waiver of such interest." 2. In partial modification of this para of the Order, the Central Board of Direct Taxes has decided that there shall be no condi tion that the decision of the High Court or the Supreme Court, as referred to therein, must be given in the assessee's own case. Also the condition that any retrospective amendment of law or the decision of the Supreme Court or the jurisdictional High Court must have been made after the end of the relevant year stands withdrawn. 3. If any petition in the past has been rejected because the Board had not issued this modification, the same may b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of such receipts during the relevant financial year, penal interest is levied for the default in payment of advance tax; ( v ) where return of income is filed voluntarily without detection by the Income-tax Department and due to circumstances beyond control of the taxpayer such return of income was not filed within the stipulated time-limit or advance tax was not paid at the relevant time. 3. The Chief Commissioners and Directors-General are being autho rised to reduce or waive penal interest under sections 234A, 234B and 234C with reference to assessment year 1989-90 and any subse quent assessment year subject to certain specified conditions. This is a major step taken by the Central Board of Direct Taxes to mitigate the hardships in deserving cases. Press Note : Dated 21-5-1996 . Judicial analysis CBDT has power to make relaxation in cases covered by sections 234A, 234B, and 234C and where assessee makes an application for waiver of interest under said sections, Board cannot decline assessee's request by a cryptic order that it was unable to interfere in matter - Sant Lal v. UOI 1996 89 Taxman 272/222 ITR 375 (Punj. Har.) EXPLAINED IN : New Pun ..... X X X X Extracts X X X X X X X X Extracts X X X X
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