2026 (1) TMI 947

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....ed 02.11.2004 to the extent respondent has rejected its application seeking waiver of interest for the Assessment Year 1996-97 and 1997-98. 2. The petitioner is engaged in the business of hire purchase and finance of automobile. It is generating income in the form of hire purchase charges. As per Section 4 of Interest Tax Act, 1974 (for short '1974 Act'), a tax known as interest tax is payable on the income of interest. A taxable person is required to file return of chargeable interest. The assessee is further required to pay advance interest tax. In case of non-filing of return of chargeable interest, as per Section 12 of 1974 Act, there is liability of interest. As per Section 12A, there is further liability of interest in case of defa....

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....enior Counsel for the petitioner submits that there was confusion in the mind of public at large. Even authorities were not clear about liability of interest on hire charges. The matter was finally clarified by circular dated 13.01.1998. The petitioner submitted returns on 30.04.1998 without intervention of the Department. The assessee voluntarily complied with provisions of 1974 Act, thus, interest under Section 12, 12A and 12B which is more or less penal in nature was not payable. 4. Per contra, learned counsel for the respondent submits that petitioner was supposed to file return after issuance of clarification dated 25.03.1996. There was no occasion to withhold advance tax or return. The liability of interest under Section 12, 12A an....