TMI Blog2005 (10) TMI 60X X X X Extracts X X X X X X X X Extracts X X X X ..... he respondent is directed to waive the remainder interest by passing a fresh order - - - - - Dated:- 18-10-2005 - Judge(s) : D. A. MEHTA., MS. H. N. DEVANI. JUDGMENT The judgment of the court was delivered by D.A. Mehta J.- Heard Mr. S.N. Divetia and Mr. T.U. Bhatt, learned counsel appearing for the petitioner and the respondent, respectively. Rule. Mr. Bhatt waives service of rule. The petition is taken up for final hearing and disposal today, with the consent of learned counsel as the disputes lie in a very narrow compass. The petitioner is a private limited company. For the assessment year 1989-90, the petitioner made a claim that export cash assistance amounting to Rs. 7,68,651 was exempt being a capital receipt. This claim ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee could not have been expected to pay tax on the export cash assistance received by him in the year ended March 31, 1989, nor to show the same as income in the return filed on December 29, 1989. It was after the expiry of the assessment year that there was a statutory amendment with retrospective effect making the export cash assistance taxable with effect from April 1, 1967. Under the circumstances, the notification dated May 23, 1996, particularly para, (d) thereof, issued under section 119(2)(a) would be applicable. The relevant portion of the notification reads as under: 'In exercise of the powers conferred under clause (a) of subsection (2) of section 119, the Central Board of Direct Taxes, hereby direct that the Chief Commissione ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ount of advance tax payable on his current income, the assessee is chargeable to interest under section 234B or section 234C and the Chief Commissioner of Income-tax or Director-General is satisfied that this is a fit case for reduction or waiver of such interest.' We are therefore clearly of the view that the present case would squarely fall under clause (d) of the aforesaid notification. Since the petitioner's tax liability arose subsequently after filing of the return and after the expiry of the assessment year on account of retrospective amendment of law, consequential levy of interest under section 234B was clearly required to be dealt with as a fit case for reduction or waiver of interest." The matter having been restored to the f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... export cash assistance is not taxable. Therefore, it is very clear that while paying advance tax and filing its return for the assessment year 1989-90, the assessee was under bona fide belief that export cash assistance was not includible in the assessee's income. Further, immediately after the amendment, the assessee itself requested to include the export cash assistance in the income for the year and paid taxes thereon. Under these circumstances, I am of the view that under clause (d) of the order of the Central Board of Direct Taxes under section 119(2)(a) as discussed above, interest charged under section 234B should be waived partly. Accordingly, interest charged under section 234B is restricted to Rs. 1,00,000 and the rest of the int ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... round of litigation, it has been held by this court that the present case would squarely fall under clause (d) of the aforesaid notification. Once this finding has been recorded by this court, it was not open to the respondent to state that clause (d) is broadly applicable in the case of the assessee. The respondent could not have read the clause of the circular as a provision of the statute so as to come to the conclusion that the condition regarding existence of an order of the jurisdictional High Court was not apparently fulfilled. The respondent has recorded a finding that the assessee was under a bona fide belief that export cash assistance was not includible in the assessee's income. Further, it has been held that immediately after ..... X X X X Extracts X X X X X X X X Extracts X X X X
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