High Court overturns Chief Commissioner's order on waiver of interest under Income Tax Act

The High Court set aside the Chief Commissioner's order rejecting the waiver of interest under section 234-B of the Income Tax Act for a business of country liquor. The Court directed the Commissioner to reconsider the matter, remanding the case for a fresh decision within three months of the petitioner submitting a certified copy of the order.

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Issues:
Challenge to order rejecting waiver of interest under section 234-B of the Income Tax Act based on a notification by Central Board of Direct Taxes. Consideration of liability of tax and advance tax under section 44AC for a business of country liquor.

Analysis:

The petitioner challenged the order dated 12.5.2005 by the Chief Commissioner, Income Tax, Meerut, under section 119(2)(a) of the Income Tax Act, rejecting the waiver of interest under section 234-B. The petitioner, engaged in the business of country liquor, was charged interest for not depositing advance tax as required under section 44AC. The petitioner argued that after a fresh assessment order based on books of accounts, the tax liability was less than the advance tax supposed to be deposited under section 44AC, making them eligible for interest waiver. The High Court noted that the Chief Commissioner did not consider this argument while disposing of the waiver application.

Upon perusing the impugned order, the Court found it necessary for the Chief Commissioner of Income Tax, Meerut to reconsider the matter. Consequently, the order dated 12.5.2005 was set aside, and the case was remanded to the Commissioner of Income Tax, Meerut, with directions to decide the waiver application afresh within three months from the date of the petitioner submitting a certified copy of the order within three weeks. The writ petition was disposed of accordingly.

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