Law:

Section:

Section 234B, read with section 234C of the Income-tax Act, 1961 - Interest, chargeable as - Assessment years 1994-95 to 1998-99 - Whether Chief Commissioner and Director General (Exemptions) have got jurisdiction to waive of or reduce interest under sections 234A, 234B and 234C in pursuance of circular-cum-notification dated 23-5-1996, if request of assessee falls within category of clauses 2(a) to (e) mentioned therein - Held, yes - Assessee filed an application seeking waiver of interest under sections 234B and 234C on ground that its case fell under clause 2(d) - Director General (Exemptions) rejected assessee's application - Whether since assessee had not brought any High Court or Supreme Court order holding that it was entitled for waiver of interest, Director General (Exemptions) rightly concluded that assessee's case did not fall under clause 2(d) of circular-cum-notification dated 23-5-1996 and, therefore, it was not eligible to claim exemption - Held, yes Circulars and Notifications: Circular-cum-notification, dated 23-5-1996 FACTS The assessee, an association, had obtained registration from the Commissioner under section 12A(1)(a). The Tribunal while dealing with the matter pertaining to the assessment year 1988-89 held that the assessee was a charitable trust and allowed it exemption under section 11. The assessee had filed returns of income by declaring nil income for the assessment year 1994-95 onwards till 1997-98 claiming exemption under section 11. When things stood thus, the instant Court while deciding the matter pertaining to some other parties held that the interest on investments would not be covered by the principle of mutuality and, therefore, the interest was not entitled for exemption. On the strength of the said , the department issued notice under section 148 for the assessment years 1994-95 to 1997-98. In response to the said notice, the assessee filed revised returns, declaring income for the assessment years 1994-95 to 1997-98 after withdrawing the claim for exemption under section 11. The assessment order under section 143(3) was passed for the assessment year 1994-95 accepting the revised returns filed. However, the interest…

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