TMI Blog2019 (4) TMI 1620X X X X Extracts X X X X X X X X Extracts X X X X ..... e levy of interest under Section 234-B for the failure to pay advance tax, is automatically attracted and the waiver in such cases, may not be granted by the Competent Authority. As is clear that the issue was highly debatable and therefore, liability of paying advance tax to that extent, treating as admitted liability could not arise. Thin line difference between the 'revenue expenditure' for replacing some of the parts of plant machineries, like rings and frames in the present case in Textile industry being allowable deduction or not and that being a highly debatable issue, in our opinion, particularly when the Assessee had succeeded up to High Court consistently, irrespective of the fact whether the appeal was filed by the Assessee or by the Revenue before the High Court or lower authorities, it cannot be said that the Assessees in such cases, ought to have admitted the liability to pay advance tax, by giving up their claim for claiming such expenditure for replacement of part of plant and machinery as an allowable revenue expenditure. That is why, while considering the application for waiver of interest under Section 234-B of the Act, the Chief Commissioner of Inc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... equently, in consequence of any retrospective 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 years, in any assessment or reassessment proceedings the advance tax paid by the assessee during the financial year immediately preceding the relevant assessment years 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. What is referred to in this para is the jurisdictional High Court decision according to which the particular item of income was not chargeable to income-tax which was available in the relevant previous year when the advance tax was paid and was overruled by the Supreme Court or a larger bench subsequently. The assessee has failed to point out any such High Court decision which held that the expenditure on replacement of machinery for modernization was allowable and which was available during the relevant prev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ne to waiver/reduction. In fact, the circumstances in which, the advance tax was not paid except the one specified in para 2(d) of the Board's order are immaterial for waiver/reduction of interest u/s 234B. It was settled by the Supreme Court in the aforesaid decision in the case of Anjum M.H.Ghaswala that the Chief Commissioner can waive the interest only in the classes of cases and classes of incomes as specified by the Board in its order u/s 119(2)(a) (page 16 of 252 ITR). Thus, the classes of cases specified in the said order are exhaustive and not illustrative. It is therefore not permissible to grant this benefit on the ground of equity or natural justice. 7.In view of the foregoing the application of the assessee for waiver of interest u/s 234B is hereby rejected. 3. According to the learned counsel for the Assessee, the issue involved is whether the replacement of rings and frames in the Textile Machineries, installed by the factory, was an allowable revenue expenditure or not, for the assessment year 1992-93 and the Assessing Authority rejected the said claim of the Assessee and raised the demand of tax and also imposed, inter alia, in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h of appeals decided by the High Court. 5. On further appeal by the Revenue against the aforesaid judgment of the Madras High Court, the Apex Court in Commissioner of Income Tax v. Saravana Spinning Mills P. Ltd. (the present Assessee) [(2007) 293 ITR 201 (SC)] , reversed the judgment of the Madras High Court in Janakiraman Mills Limited case supra and held that the expenditure incurred for replacement of the machineries could not be claimed as current repairs under Section 37(1) of the Act and since Section 37(1) of the Act excludes those items of expenditure which expressly fall under Sections 32 to 36 of the Act, such expenditure of replacement of machinery was not an allowable expenditure. 6. The relevant portions of the judgment of the Supreme Court in Commissioner of Income Tax v. Saravana Spinning Mills P. Ltd. [(2007) 293 ITR 201 (SC)] are quoted below for ready reference: Held, reversing the decision of the High Court, (i)that the manufacturing process in the textile mill was not one continuous integrated process; (ii)that to decide the applicability of section 31(i) the test was not whether t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ely because the Apex Court held against the assessee that even though it may be revenue expenditure, but it will not be allowable as current repairs , finally, the liability to pay advance tax could not be presumed on the part of the assessee during that contemporary period and therefore, it was fit case for waiver of interest under Section 234-B of the Act., in terms of para 2(b) of the Board Circular, dated 26.07.2006 which laid down illustrative guidelines for waiver of interest in such case. 8.On the other hand, the learned counsel appearing for the Revenue submitted that the Assessee did not satisfy the Guidelines in para 2(c) of the Circular dated 26.06.2006 and therefore, the Chief Commissioner of Income Tax was justified in rejecting the waiver application filed by the Assessee, and the same was rightly upheld by the learned Single Judge. 9.Heard the learned counsel appearing for the parties and perused the materials available on record. 10.We are of the considered opinion that the preset Writ Appeal of the Assessee deserves to be allowed. Undoubtedly, the Guidelines laid down by the Central Board in the Circular dated 26.06.2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appeal was filed by the Assessee or by the Revenue before the High Court or lower authorities, it cannot be said that the Assessees in such cases, ought to have admitted the liability to pay advance tax, by giving up their claim for claiming such expenditure for replacement of part of plant and machinery as an allowable revenue expenditure. That is why, while considering the application for waiver of interest under Section 234-B of the Act, the Chief Commissioner of Income Tax was bound to consider this aspect, which has unfortunately not been done. 13.Therefore, we are inclined to allow the present Writ Appeal. We accordingly allow this Writ Appeal and set aside the order passed by the learned Single Judge dated 21.02.2014 as well as the order passed by the Chief Commissioner of Income, dated 26.02.2009 under Section 119(2)(a)of the Act, for the Assessment Year 1992-93 and remand the matter to the Chief Commissioner of Income Tax, for re-considering the case of the Assessee afresh for waiver of interest under Section 234-B of the Act, in accordance with law,. No order as to costs. Consequently, the connected miscellaneous petition is closed. - - TaxTMI - T ..... X X X X Extracts X X X X X X X X Extracts X X X X
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