TRAVANCORE SUGARS AND CHEMICALS LTD. Vs. ADDITIONAL COMMISSIONER OF INCOME TAX, TIRUVALLA RANGE, TIRUVALLA

JUDGEMENT

(1.) The petitioner is a Government of Kerala undertaking. It impugn an order passed by the Chief Commissioner of Income Tax rejecting claim for waiver or reduction of interest charged under Section 234B of the Income Tax Act, 1961. Exhibit P3 is the said order. As seen from Exhibit P4 notification issued by the Central Board of Direct Taxes, certain classes of income can be considered for reduction of waiver under Section 234A or Section 234B. Among the above categories of classes of income, the petitioner invoked category (d) which states as follows:

(2.) The brief facts of the case is as follows: The petitioner undertook sale of capital assets during the year 2001-02. The said transaction attracted Capital Gains. The sale proceeds were deposited in a 'No Lien' account with the State Bank of India as per the direction of the Board for Industrial and Financial Reconstruction ("BIFR" for short). It is appropriate to refer the relevant portion of the direction issued by the BIFR in this regard, as evident from Exhibit-P2, which reads as follows:

(3.) As seen from Exhibit-P3 impugned order, the claim of the petitioner for reduction of interest was not considered on merits for the simple reason that according to Chief Commissioner of Income Tax, the petitioner's case is not referable to any of the categories referred in Exhibit P4 notification, dated 26/6/2006, issued by the Central Board of Direct Taxes. Having adverted to the notification, this Court is of the view that the petitioner could not remit tax within time on account of Exhibit-P2 order passed by the BIFR. It is to be noted that the petitioner remitted tax immediately after the direction was lifted. Category (d) referred in Exhibit P4 notification clearly refers to the case that "where an assessee fails to file a return of income due to unavoidable circumstances". If that be so, this Court is of the view that the petitioner's case falls squarely within category (d). It is for the Chief Commissioner of Income Tax to decide whether full waiver in interest or reduction in interest can be granted to the petitioner. However, certainly, the petitioner's case would fall within category (d). Therefore, the impugned order is set aside for paving way for reconsideration of the matter by the Chief Commissioner of Income Tax. The petitioner shall place the order of BIFR (Exhibit-P2) before the Chief Commissioner of Income Tax. Appropriate orders shall be passed in this matter within a period of three months.