Tribunal rules in favor of assessee, deletes interest under Income Tax Act for unforeseeable income.

The Tribunal allowed the appeal, ruling in favor of the assessee and ordering the deletion of the interest levied under section 234C of the Income Tax Act for deferment in payment of advance tax due to unforeseeable income from a gift received after the specified dates. The Tribunal emphasized the unique circumstances of the case, distinguishing it from precedents involving business receipts and holding that the inability to estimate income absolved the assessee from interest liability.

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Issues:
Charging of interest under section 234C of the Income Tax Act for deferment in payment of advance tax.

Analysis:
The appeal pertains to the assessment year 2012-13 and challenges the charging of interest under section 234C of the Income Tax Act amounting to Rs. 7,66,070. The appellant, an individual deriving income from bank deposits and capital gains, contested the interest levy due to a shortfall in payment of advance tax on specified dates in relation to a gift received after the due dates. The appellant argued that the income from the gift was unforeseeable on the due dates, thus advance tax payment was not possible. The Departmental Representative supported the interest levy, citing the mandatory nature of the provision and a Delhi High Court judgment. The Tribunal considered the principle of 'pay as you earn' and the requirement to estimate income for advance tax payment. It noted that the gift received after the due dates could not have been anticipated, aligning with precedents where impossibility to estimate income absolved the assessee from interest liability. The Tribunal rejected the Revenue's arguments, emphasizing the unique circumstances of the case. It distinguished a Delhi High Court judgment involving business receipts from the present situation of a windfall gain through gifts. Consequently, the Tribunal set aside the CIT(A) order and directed the Assessing Officer to delete the interest charged under section 234C.

In conclusion, the Tribunal allowed the appeal, ruling in favor of the assessee and ordering the deletion of the interest levied under section 234C of the Income Tax Act.

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