Waiver of interest charged u/s 201(1A)(i) of the Income Tax Act 1961

CBDT has issued guidelines for waiver of interest charged u/s 201(1A)(i) vide circular No.11/2017 dated 24/03/2017. According to this circular CBDT empower to Chief Commission of Income Tax and Director General of Income Tax may reduce or for waiver of interest charged u/s 201(1A)(i) of the Act in the following cases.

A. Where the books of account and other documents necessary for making tax deduction are seized pursuant to search-seizure proceedings u/s 132,

B. The cases where the tax was not deducted pursuant to matter is pending due to jurisdictional HC decision, but was held deductible subsequently in consequence of any retrospective amendment or SC decision or larger bench decision of jurisdictional HC, and

C. Where default pertains to non-resident payment in respect of countries with which India has DTAA and where the dispute regarding the tax payable is referred to the Competent Authority of India within 2 years of receiving notice of demand u/s 201and settled under MAP resolution;

However no reduction or waiver of such interest  shall permissible where demand under section 200A, 201(1) or 234E as case may be stand unpaid. In other word assessee must  paid principal amount of demand or make satisfactory arrangement or Chief Commission of Income Tax and Director General of Income Tax may also impost any other condition as deemed to be fit for reduce or waiver of interest charged u/s 201(1A)(i) of the Act.

CBDT clarifies that even in cases where interest u/s 201(1A)(i) is already paid by the deductor, waiver can be considered and refund may be given to deductor if waiver is ordered subject to the above conditions. CBDT requires Chief Commission of Income Tax and Director General of Income Tax examining an application for waiver of interest under this order shall pass a speaking order after providing adequate opportunity of being heard to the applicant. The board reserve the power to examine grievance but no review of or appeal against the orders passed on merits by such authorities would be entertained by the Board.

Disclaimer: The contents in this document are solely for information purpose. Due care has been taken in preparing this document, still the existence of mistakes or omissions herein is not ruled out.