Income Tax – waiver of interest
The CBDT has directed that Chief Commissioners and DGs may reduce or waive interest charged under section 234A, or section 234B or section 234C in the following cases. However, no reduction or waiver of interest shall be ordered unless the assessee has filed the return of income for the relevant assessment year and paid the entire income-tax. They may also impose any other conditions for the reduction or waiver of interest.
1. Where during the course of proceedings for search and seizure under section 132 of the Income-tax Act, or otherwise, the books of account and other incriminating documents have been seized, and the assessee has been unable to furnish the return of income for the previous year.
2. Any income chargeable to income-tax under any head of income, other than "Capital Grains" is received or accrued after due date of payment of the first or subsequent instalments of advance tax which was neither anticipated nor was in the contemplation of the assessee, and the advance tax on such income is paid in the remaining instalment or instalments.
3. Where any income was not chargeable to income-tax in the case of an assessee on the basis of any order passed by the High Court 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 the decision of the Supreme Court of India, or a decision of a larger Bench of the jurisdictional High Court the advance tax paid by the assessee during such financial year is found to be less than the amount of advance tax payable on his current income, and the assessee is chargeable to interest.
4. Where a return of income could not be filed by the assessee due to unavoidable circumstances and such return of income is filed voluntarily by the assessee or his legal heirs without detection by the assessing officer.
In a major assessee friendly decision, the Board has directed that if any petition had been rejected in the past because these directions did not exist, they may be reconsidered in the light of the present order, but if any interest had been waived in the past, those orders will not be re-opened.
ORDER in F.No.(B) Dated: June 26, 2006