Court grants 40% interest waiver for specific years, quashes Commissioner's order, directs recalculation.

The court partially allowed the writ petition, granting a 40% waiver of interest for specific installments due for Assessment Years 1999-2000 and 2000-2001. The court quashed the Chief Commissioner's order and directed the Assessing Officer to recalculate any payable demand. The judgment discussed the waiver of interest under Section 234C, interpretation of circulars, seized assets for tax payments, and entitlement to interest waivers for the mentioned assessment years, providing detailed reasoning and directives for further proceedings.

---

---

Issues:
1. Application for waiver of interest under Section 234C of the Income Tax Act, 1961.
2. Interpretation of circulars/instructions dated 23.05.1996 and 26.06.2006.
3. Consideration of seized FDRs for payment of advance tax installments.
4. Entitlement to waiver of interest under Section 234C for Assessment Years 1999-2000 and 2000-2001.

Issue 1: Application for waiver of interest under Section 234C:
The case involved a writ petition filed by a company seeking to quash an order passed by the Chief Commissioner of Income Tax rejecting the application for waiver of interest under Section 234C of the Income Tax Act, 1961. The petitioner had requested the waiver in relation to advance tax installments due for Assessment Years 1999-2000 and 2000-2001.

Issue 2: Interpretation of circulars/instructions dated 23.05.1996 and 26.06.2006:
The Chief Commissioner rejected the application based on the instructions dated 26.06.2006, stating that the earlier circular dated 23.05.1996 was not in force when the waiver request was made. However, the court held that the instructions applicable at the beginning of the assessment year should be considered unless there are compelling reasons. The court referred to previous cases to support the principle that circulars affecting rights should not be withdrawn with retrospective effect.

Issue 3: Consideration of seized FDRs for payment of advance tax installments:
The petitioner had FDRs worth Rs.29 crores seized before an advance tax installment was due. The FDRs were subsequently released, and the petitioner utilized them to pay advance tax installments. The court noted that the FDRs were not considered as undisclosed income and held that the petitioner was entitled to a waiver of interest under Section 234C for the relevant assessment year.

Issue 4: Entitlement to waiver of interest under Section 234C for Assessment Years 1999-2000 and 2000-2001:
For Assessment Year 1999-2000, the court granted a 40% waiver of interest for installments due on specific dates. Similarly, for Assessment Year 2000-2001, the court allowed a 40% waiver of interest for the respective installments. The court partially allowed the writ petition, quashed the order of the Chief Commissioner, and directed the Assessing Officer to compute any payable demand accordingly.

In conclusion, the judgment addressed various issues related to the waiver of interest under Section 234C, interpretation of circulars, consideration of seized assets for tax payments, and the entitlement to interest waivers for specific assessment years. The court provided detailed reasoning and analysis for each issue, ultimately partially allowing the writ petition and providing specific directives for further actions.

---