2005 (10) TMI 60

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...., the petitioner made a claim that export cash assistance amounting to Rs. 7,68,651 was exempt being a capital receipt. This claim was made in the return of income filed on December 29, 1989. It appears that, during the course of assessment proceedings under section 143(3) of the Income-tax Act, 1961 ("the Act"), the petitioner addressed a letter dated January 22, 1991, addressed to the Assessing Officer informing that, by the Finance Act, 1990, export cash assistance had become taxable because of amendment with retrospective effect from April 1, 1967. Accordingly, the Assessing Officer brought the said amount to tax. He also levied interest under section 234B of the Act to the tune of Rs. 3,48,122. The petitioner moved an application be....

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....onferred under clause (a) of subsection (2) of section 119, the Central Board of Direct Taxes, hereby direct that the Chief Commissioner of Income-tax and Director-General of Income-tax may reduce or waive interest charged under section 234A or section 234B or section 234C of the Act in the classes of cases or classes of income specified in paragraph 2 of this order for the period and to the extent the Chief Commissioner of Income-tax/Director-General of Income-tax deem fit. However, no reduction or waiver of such interest shall be ordered unless the assessee has filed the return of income for the relevant assessment year and paid the entire tax due on the income as assessed except the amount of interest for which reduction or waiver has be....

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....234B was clearly required to be dealt with as a fit case for reduction or waiver of interest." The matter having been restored to the file of the Chief Commissioner of Income-tax, Ahmedabad-1, an order came to be made by the respondent on March 4, 2005. He has reduced the interest by a sum of Rs. 2,48,122 while retaining interest to the extent of Rs. 1,00,000 by observing as under: "The clause (d) is broadly applicable in the case of the assessee as the amendment for treating export incentive as taxable was made by the Finance Act, 1990, subsequent to the end of the financial year 1988-89. However, the said clause (d) of the Central Board of Direct Taxes order under section 119(2)(a) requires that such amendment in law treating any in....

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....ection 234B should be waived partly. Accordingly, interest charged under section 234B is restricted to Rs. 1,00,000 and the rest of the interest charged under section 234B on account of export cash assistance is hereby waived." It is apparent from the facts of the case that the respondent has failed to give any reason for retaining the interest to the extent of Rs. 1 lakh, while holding that, in the circumstances, interest charged under section 234B of the Act should be waived partly under clause (d) of the Circular No. F.No. 400/234/95-IT(B), dated May 23, 1996 reported in [1997] 225 ITR (St.) 101. The reason about the non availability of a judgment of the jurisdictional High Court cannot be termed to be a valid reason in the facts of t....