Law: Income Tax Act, 1961

Section: 139

Income-tax----Interest---Waiver of interest---Delay in filing return---Failure to file estimate of advance tax---Income from sale of import entitlements made taxable because of retrospective amendment by Finance Act, 1990---Levy of interest for assessment years 1984-85 to 1986-87 requires waiver---Indian Income Tax Act, 1961, Ss. 139(8) & 217. If for any reason the law is amended retrospectively creating liability of tax then, it would be sufficient cause for not charging interest under section 139(8) of the Income Tax Act, 1961: Held, that interest levied under section 139(8) of the Income Tax Act, 1961, for the assessment years 1984-85 to 1986-87 in respect of income on sale of import entitlements which became taxable because of retrospective amendment of section 28 by the Finance Act, 1990, required waiver. Interest under section 217 of the Act on the same reasoning was also to be waived in respect of the income derived by the assessee on sale of import entitlement which was made taxable because of retrospective amendment by the Finance Act, 1990. CIT v. Pure Beverages Ltd. (1995) 214 ITR 57 (Guj.) ref. JUDGMENT V.K. SINGHAL, J---The order of the first respondent, dated September 14, 1992, passed under section 264 of the Income Tax Act, 1961, in respect of the assessment years 1984-85 to 1986-8 7 have been assailed in these petitions. The petitioners submitted for waiver of interest were rejected by an order passed under rules 40 and 117A. The dispute is in respect of the premium received on sale of import entitlement, which by retrospective amendment by the Finance Act, 1990, was made laible to tax. There was another addition on account of retrospective amendment of section 43B. The interest on addition because of retrospective amendment of section 43B was directed to be deleted by the Commissioner of Income-tax for the purpose of calculating the interest under sections 139(8) and 217 of the Act. It was found that there were different Courts decisions on the question of taxability of premium on sale of import entitlement, the assessee took a calculated risk to claim this as not taxable. Therefore, the relief on that ground was not given. Learned counsel…

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