Law:

Section:

Section 234A, read with section 234C of the Income-tax Act, 1961 - Return of income - Interest for default in furnishing - Assessment year 1999-2000 - Where deduction under section 80HHC granted to petitioner-supporting manufacturer was withdrawn in reassessment on ground that exporter concerned had incurred loss and interest under sections 234 and 234C was charged, petitioner's application for waiver of interest could not be allowed as petitioner did not fulfil condition laid down in CBDT Circular, dated 26-6-2006 [In favour of revenue] The petitioner had claimed deduction under section 80HHC placing support on the disclaimer certificates issued in their favour by export houses, through whom the petitioner had exported their marine products. The return was accepted under section 143(1) by the assessing authority. Thereafter, the Assessing Officer initiated reassessment proceedings under section 147 on the ground that as per the decision of the Supreme Court in IPCA Laboratory Ltd. v. Dy. CIT[2004] 266 ITR 521 , the petitioner was not eligible for deduction under section 80HHC. The reassessment was completed and the deduction granted earlier under section 80HHC was added back to the petitioner's income as one of the export houses, had incurred a loss and the petitioner, a supporting manufacturer, was, therefore, not eligible for deduction under section 80HHC on the basis of the disclaimer certificate given by such an export house. The petitioner was also charged with interest under sections 234B and 234C. The petitioner submitted an application requesting the respondent to exercise his powers under section 119(2)(a) of the Act and waive the said interest. In their application the petitioner stated that their claim for deduction under section 80HHC was on the basis that they were a supporting manufacturer; they had relied on the disclaimer certificates issued in their favour by the export houses which had not claimed deduction under section 80HHC; the deduction claimed by them, under section 80HHC, was disallowed by the Assessing Officer relying on the of the Supreme Court in IPCA Laboratory Ltd. (supra), was pronounced after they had filed their return for the…

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