TaxTMI 
TaxTMI 
2004 (7) TMI 51
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..... 3,48,122 levied under section 234B of the Act for the assessment year 1989-90. The petitioner has also challenged the legality of the order dated January 21/28, 1993 (annexure "I"), of the Central Board of Direct Taxes in regretting its inability to intervene in the matter to waive the above interest. The facts leading to filing of this petition, briefly stated, are as under: The petitioner filed on December 29, 1989, its return of income for the assessment year 1989-90 under section 139(1) of the Act. The petitioner had claimed in the return of income that export cash assistance amount of Rs. 7,68,651 was exempt being a capital receipt. The petitioner had made its claim on the basis of the decision dated November 17, 1989 (annexure B) of the Income-tax Appellate Tribunal, Ahmedabad, in the case of the petitioner itself for the assessment years 1982-83 and 1983-84. The petitioner had paid advance tax as per its return of income as under: Amount (Rs.) (1) Advance tax 2,19,450 (2) Tax deducted at source 148 (3) Tax under section 140A 1,72,640 3,92,238 Interest under section 234B 2....
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....154 of the Act before the Assessing Officer, respondent No. 3 herein, for deleting interest of Rs. 3,48,122 levied under section 234B of the Act which came to be rejected by the Assessing Officer by his order dated March 17, 1992 (annexure K). The petitioner challenged the said order by filing a revision petition under section 264 of the Act before respondent No. 2 which also came to be rejected by respondent No. 2 by his order dated March 31, 1994 (annexure M). In the meantime, the application made by the petitioner to the Chairman, Central Board of Direct Taxes, also came to be rejected by communication dated January 21/28, 1993 (annexure I) regretting the inability of the Board to intervene in the matter. Hence this petition. At the hearing of this petition, Mr. S.N. Divetia, learned counsel for the petitioner, has made the following submissions: In the case of this petitioner itself, the Income-tax Appellate Tribunal had held by order dated November 17, 1989 that the export cash assistance was a capital receipt and, therefore, not taxable as income. Hence, when the petitioner filed the return of income on December 29, 1989 for the assessment year 1989-90, the petitioner w....
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....idavit in reply of the Deputy Commissioner of Income-tax (Assessment), Special Range-I, Ahmedabad, contending that, as held by the hon'ble Supreme Court in Swadeshi Cotton Mills Co. Ltd. v. CIT [1982] 135 ITR (St.) 110, the receipt which springs out from the business of the assessee is a revenue receipt and, therefore, the petitioner ought to have offered the export cash assistance amount as its income for the relevant assessment year. It is further submitted that the Madras and Calcutta High Courts had held in CIT v. Wheel and Rim Co. of India Ltd. [1977] 107 ITR 168 (Mad) and Jeewanlal (1929) Ltd. v. CIT [1983] 142 ITR 448 (Cal) that cash assistance received under a Government scheme is taxable as business income and, therefore also, the export cash assistance ought to have been added as income for the relevant assessment year irrespective of the fact whether the section was on the statute book or not. In CIT v. Hindustan Electro Graphites Ltd. [2000] 243 ITR 48, the apex court had an occasion to deal with a similar case, though in the context of levy of additional tax under section 143(1A) of the Act. In the said case also, the return for the assessment year 1989-90 was filed....
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....the return filed on December 29, 1989. It was after the expiry of the assessment year that there was a statutory amendment with retrospective effect making the export cash assistance taxable with effect from April 1, 1967. Under the circumstances, the notification dated May 23, 1996, particularly para, (d) thereof, issued under section 119(2)(a) would be applicable. The relevant portion of the notification reads as under: "In exercise of the powers conferred 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....