Law:

Section:

Section 215 of the Income-tax Act, 1961, read with rule 40(5) of the income-tax Rules, 1962 - Advance-tax - Interest payable by assessee - Assessment years 1967-68 and 1968-69 - For relevant assessment years, assessee filed his estimates of advance-tax but did not include therein income of his minor sons - Since advance-tax paid by assessee was less than 75 per cent of tax determined on regular assessment, ITO levied interest under section 215 - On revision, assessee contended that so far as inclusion of minor's income in estimates was concerned, since said question was pending before Supreme Court at time of filing his estimates, he did not include that income - Commissioner rejected assessee's contention holding rule 40 of 1962 Rules did not provide for waiving interest on such ground - Whether Commissioner had committed an error in stating that ground urged could not fall within rule 40 of 1962 Rules - Held, yes - Whether, therefore, matter was to be remanded to Commissioner for disposal afresh - Held , yes (Matter remanded) FACTS For the relevant assessment years, the assessee filed his estimates of advance tax payable by him, but did not include therein the income of his minor sons. Since the assessee paid the advance-tax less than 75 per cent of the tax determined on the basis of regular assessment, the ITO levied interest under section 215. On revision, the assessee contended that as regards the inclusion of the minor's income in the estimates, since the said question was pending before the Supreme Court in C.R. Nagappa v. CIT [1969] 73 ITR 626 (SC), at the time of filing the estimates he did not include that income. The Commissioner rejected said contention holding that rule 40 of the Income-tax Rules, 1962, did not provide for waiving the interest on such ground or circumstance on reference. On writ HELD Reference to clause (5) of rule 40 of the Rules makes it clear that the Commissioner can reduce or waive the interest payable under section 215 in any case where he considers that there are circumstances justifying for such reduction or waiver. The assessee stated that he was waiting for the decision of the Supreme Court. Before that decision, he…

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