DEVARSONS PRIVATE LTD Vs. U P SINGH

JUDGEMENT

(1.) Heard Mr.S.N.Divetia and Mr.T.U.Bhatt, the learned counsel appearing for the petitioner and the respondent respectively. Rule. Mr.Bhatt waives service of rule. The petition is taken up for final hearing and disposal today, with consent of the learned counsel as the disputes lies in a very narrow compass.

(2.) The petitioner is a Private Limited Company. For assessment year 1989-90, the petitioner made a claim that export cash assistance amounting to Rs.7,68,651/- was exempt being a capital receipt. This claim was made in the return of income filed on 29th December 1989. It appears that, during the course of assessment proceedings under section 143(3) of the Income Tax Act, 1961 (the Act), the petitioner addressed a letter dated 22nd January 1991 addressed to the assessing officer informing that, by Finance Act, 1990, export cash assistance had become taxable because of amendment with retrospective effect from 1st April 1967. Accordingly, the assessing officer brought the said amount to tax. He also levied interest under section 234B of the Act to the tune of Rs.3,48,122/-.

(3.) The petitioner moved an application before Central Board of Direct Taxes, in the first instance, requesting for waiver / reduction of the interest levied under Section 234B of the Act. The said application came to be rejected by communication dated January 21/28, 1993. The petitioner thereupon approached this Court by way of Special Civil Application No.9783 of 1994. This Court, after extensively setting out the ratio of the Apex Court decision in the case of C.I.T. v. Hindustan Electro Graphites Ltd., [2000] 243 ITR 48, stated as under :