Strict compliance for interest waiver under section 273A(1)(iii)(c) denied where tax on disclosed income was paid late.

Waiver of interest under section 273A(1)(iii)(c) of the Income-tax Act depends on strict compliance with the condition that tax on the disclosed income be paid before notice under section 139(2) or section 148, or along with the disclosure where no notice has been issued. Where the return was filed belatedly and the tax on the disclosed income was paid only later, the statutory precondition was not satisfied. The Kerala HC therefore upheld rejection of relief and held that the assessee was not entitled to waiver of interest.

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Issues: Whether the assessee satisfied the conditions for waiver of interest under section 273A(1)(iii)(c) of the Income-tax Act, 1961, particularly the requirement that tax on the income disclosed be paid before the relevant notice stage.

Analysis: The return for the assessment year was filed after the due date and the tax on the disclosed income was paid only later. The disclosure was made through the return itself, and the statutory condition under section 273A(1)(iii)(c) required payment of tax on the income so disclosed before the issue of notice under section 139(2) or section 148, or along with the disclosure where no such notice had been issued. As the tax was not paid at that stage, the precondition for reduction or waiver of interest was not met.

Conclusion: The assessee was not entitled to waiver of interest under section 273A(1)(iii)(c), and the decision rejecting relief was upheld. The appeal was dismissed.

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