Department Can't Deny Grant For Waiver Of Interest U/S 234C Of IT Act Without Disposing Of Issues Flagged By Taxpayer: Bombay High Court
Pankaj Bajpai
21 Nov 2024 3:50 PM IST
The Bombay High Court recently clarified that the Chief Commissioner of Income Tax ought to have addressed the issues/justification as flagged by the taxpayer in supporting its case for grant of waiver of interest u/s 234C.
Such approach of Chief Commissioner of Income Tax would show non-application of mind to the material contentions raised by the petitioner/ assessee, added the Court.
Section 234C of the Income tax Act provides for levy of interest on account of default in payment of instalments of advance tax at specified rates and for the specified time period.
The Division Bench of Justice G.S Kulkarni and Justice Advait M. Sethna observed that “statutory provisions and/or the scheme of the Income tax Act, on which the petitioner intends to support his case, in the given facts and circumstances, lacks consideration in the impugned order”.
Facts of the case:
The petitioner/ Assessee filed its return declaring income at Rs.3,65,12,48,710/- with book profits at Rs.11,57,63,40,425/- and total tax of Rs.2,06,03,13,939/- including interest of Rs.3,88,59,353/-. Such interest of Rs.3,88,59,353/- is charged for deferment of Advance Tax u/s 234C. The petitioner has paid total Advance Tax of Rs.1,71,00,00,000/-, and total interest of Rs.3,88,59,353/- at the time of filing of returns. The petitioner therefore filed an application seeking waiver of interest charged u/s 234C, which was rejected. Hence, the petitioner approached the High Court.
Observations of High Court:
From perusal of the application of petitioner for waiver of interest u/s 234C addressed to the respondent/ Revenue, the Bench found that the petitioner has highlighted sudden outbreak of the COVID-19 pandemic which has prevented proper estimation of income/book profits for paying the Advance Tax.
The Bench accepted that the pandemic brought about severe financial constraints and adverse impact on the petitioner's overall earnings and its revenue.
The impugned order has nowhere considered the primary submission of the petitioner on waiver of interest, attributable to the COVID-19 pandemic, added the Bench.
The High Court therefore quashed the impugned order passed by the Chief Commissioner, and remanded the proceedings for a de-novo consideration of the petitioner's waiver application to be decided on its own merits.
Counsel for Petitioner/ Assessee: Dharan V. Gandhi
Counsel for Respondent/ Revenue: Akhileshwar Sharma
Case Title: Grasim Industries vs. Chief Commissioner of Income Tax
Case Number: Writ Petition (LODG.) No. 17982 of 2024
