2026 (2) TMI 1062

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....the same are hereby disposed of by this common order. For the sake of brevity and convenience, facts are borrowed from 2. The petitioner through instant petition under Articles 226/227 of the Constitution of India is seeking setting aside of order dated 20.02.2006 whereby respondent has rejected its application seeking waiver of interest under Section 234B of Income Tax Act, 1961 (for short '1961 Act'). 3. The petitioner is a Cooperative Society, owned and controlled by State of Punjab. It is engaged in the activities of purchase and marketing of wheat, paddy and other agricultural produce. It derived income of Rs.35.67 crores during Assessment Year 1998-99. It claimed that aforesaid income should be exempted from tax under Section 80....

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.... (supra). The respondent by Amendment Act of 1998 retrospectively amended Section 80P(2) whereby benefit of exemption was denied to Marketing Societies. The amendment was made w.e.f. 01.04.1968. The petitioner filed return for Assessment Year 1998-99 on 24.10.2000. In the return, exemption was claimed. The Assessing Authority denied exemption. The petitioner at this stage started claiming waiver of interest. The petitioner is entitled to waiver of interest in view of Central Board of Direct Taxes (for short 'CBDT') Circular dated 23.05.1996 read with Circular dated 30.01.1997. 5. Per contra, learned counsel for respondent submits that Supreme Court vide judgment dated 25.02.1993 held that Marketing Societies are not entitled to exemption....

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....th circular dated 30.01.1997 has clarified that if tax is not paid on account of judgment of jurisdictional High Court and said judgment is either overruled by Supreme Court or retrospective amendment is made in the law, the Chief Commissioner may waive interest under Section 234B. The respondent has rejected petitioner's application seeking waiver of interest on the ground that during February' 1993 to May' 1998 judgment of Supreme Court in Assam Co-operative (supra) was in vogue. The petitioner was liable to deposit advance tax. It was not entitled to exemption under Section 80P(2). The petitioner did not discharge its liability of advance tax, thus was liable to pay interest on delayed payment of advance tax. 9. From the sequel of eve....