TaxTMI 
TaxTMI 
2019 (4) TMI 1620
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....ion of the Assessee, vide his order dated 26.02.2009, held that the guidelines of the Central Board of Directors in the Circular No.FNo. 400/29/2002-ITB, dated 26.06.2006, did not get attract to the facts of the case of the appellant / Assessee and therefore, the waiver of interest under Section 234-B of the Act, could not be granted. The relevant observation of the Chief Commissioner of Income Tax in the impugned order, including the relevant guidelines covered in para 2(c) of the said Circular (which is wrongly stated as 2(d) in the impugned order), is quoted below for ready reference. "Where any income which was not chargeable to incometax on the basis of any order passed in the case of an assessee by the High Court within whose jurisdiction he is assessable to income-tax, and as a result he did not pay income-tax in relation to such income in any previous year and subsequently, in consequence of any retrospective amendment of law or, as the case may be, the decision of the Supreme Court in his own case, which event has taken place after the end of any such previous years, in any assessment or reassessment proceedings the advance tax paid by the assessee during the fina....
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....ecisions that the interest u/s 234B is consequential, automatic, compensatory and mandatory: (i) Union Home Products vs Union of India 215 ITR 748(KAr) (ii) CIT vs Anjum M.H.Ghaswala 252 ITR 01 (SC) (iii) CIT vs Ramalingam 241 ITR 753 (Ker) (iv) Kuttakaran Tools vs CIT 264 ITR 305(Ker) (v) Mrs.Prabhulal vs CIT 269 ITR 212 (Pat) (vi) Dr.S.Reddappa vs Union of India 232 ITR 62(kar) (vii) Vinor Khurana vs CIT 253 Itr 578 (P&H) On account of the interest being compensatory, it only represents the cost of funds payable as advance tax but not paid and enjoyed by the assessee for his own purposes including earning of income. Thus, it was not penal in nature and hence, the considerations pleaded by the assessee are not germane to waiver/reduction. In fact, the circumstances in which, the advance tax was not paid except the one specified in para 2(d) of the Board's order are immaterial for waiver/reduction of interest u/s 234B. It was settled by the Supreme Court in the aforesaid decision in the case of Anjum M.H.Ghaswala that the Chief Commissioner can waive the interest only in the classes of cases and classes of ....
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..... Held also, that since the very same issue/point had been considered by the Court in various decisions in favour of the assessees and against the revenue and admittedly, those decisions had not been taken up by way of appeal to the Supreme Court, the Department's challenge in the present cases was not justified. DEPUTY CIT v. VELLORE CO-OPERATIVE SUGAR MILLS LTD.[2000] 242 ITR 170(Mad); BERGER PAINTS INDIA LTD. V. CIT [2004] 266 ITR 99 (SC); UNION OF INDIA V. SATISH PANALAL SHAH [2001] 249 ITR 221 (SC); CIT V. NARENDRA DOSHI [2002] 254 IRT 606 (SC) AND CIT V. SHIVSAGAR ESTATE [2002] 257 ITR 59 (SC) followed." The appeal No.53 of 2001 pertained to the present Assessee, in the said batch of appeals decided by the High Court. 5. On further appeal by the Revenue against the aforesaid judgment of the Madras High Court, the Apex Court in Commissioner of Income Tax v. Saravana Spinning Mills P. Ltd. (the present Assessee) [(2007) 293 ITR 201 (SC)], reversed the judgment of the Madras High Court in Janakiraman Mills Limited case supra and held that the expenditure incurred for replacement of the machineries could not be claimed as "current repairs" under Sectio....
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.....2009, quoted above. The learned counsel for the Assessee urged that since the Assessee has consistently succeeded on the issue of claiming the said expenditure for replacement of some plant and machinery viz., rings and frames, up to the High Court and merely because, the said issue came to be decided against the assessee by the Apex Court, it was still a fit case for waiver of interest under Section 234-B of the Act, as the assessee bonafidely contested the said issue and did not pay the advance tax with respect of the said business expenditure, which would be of allowable revenue expenditure and merely because the Apex Court held against the assessee that even though it may be revenue expenditure, but it will not be allowable as "current repairs", finally, the liability to pay advance tax could not be presumed on the part of the assessee during that contemporary period and therefore, it was fit case for waiver of interest under Section 234-B of the Act., in terms of para 2(b) of the Board Circular, dated 26.07.2006 which laid down illustrative guidelines for waiver of interest in such case. 8.On the other hand, the learned counsel appearing for the Revenue submitted that the ....