Circular No. 783 — Clarification regarding waiver…

What this is

Circular No. 783 was issued by the Central Board of Direct Taxes on 18 November 1999. Its subject is 1236. Clarification regarding waiver of interest claimed on the basis of Press Note dated 21-5-1996.

This is a clarification. The Board is stating how it reads a provision. That reading binds the department; it does not bind a court, and where the section says otherwise the section wins.

What it does

Stops claims for waiver of interest founded on a press note rather than on the Board's order. The order of 23 May 1996 set out the classes of income and cases in which the Chief Commissioner or Director General may reduce or waive interest under sections 234A, 234B and 234C, and a press note of 21 May 1996 had been released ahead of it for publicity. Claims were being made under paragraph 2(v) of that press note seeking waiver of interest for non-payment of advance tax, although paragraph 2(e) of the order contains no such stipulation. The Board clarifies that a claim based on the press note is not sustainable, a press note being only a broad advance indication of a policy under formulation and not a final legal document, and reiterates that every waiver request is to be decided by the Chief Commissioner or Director General within the parameters of the order of 23 May 1996 read with the order of 30 January 1997.

Why it was issued

Instances had come to the Board's notice of waiver being claimed on a limb that appeared in the press note but not in the order that followed it.

Who it reaches

Assessees petitioning for waiver of interest under sections 234A, 234B or 234C
Chief Commissioners and Directors General deciding those petitions
Assessees who had relied on the press note limb about non-payment of advance tax

The provisions it speaks to

Left, the provision of the Income-tax Act, 1961 as the instrument itself names it. Right, the section of the Income-tax Act, 2025 that the department’s own concordance maps it to — which is where the same ground is now covered.

Under the 1961 Act	Now
s.234A	s.423

The instrument, as the Board published it

The words below are the department’s own, reproduced from its published text. Where the department’s copy carried a publisher’s notes after the instrument, those are not reproduced.

1236. Clarification regarding waiver of interest claimed on the basis of Press Note dated 21-5-1996
1. The Board by an order [ vide F.No. 400/234/95-IT(B)] dated 23-5-1996, indicated the class of income or class of cases in which reduction or waiver of interest under section 234A, B & C would be considered by the Chief Commissioner of Income-tax and Director General of Income-tax. Prior to the issue of the order a Press Note was released on 21-5-1996 with a view to give wide publicity to the major step contemplated by the Board towards mitigating hardship in genuine cases.
2. However, the instances have come to the notice of the Board where certain claims have been made on the basis of para 2(v) of the Press Note seeking waiver of interest for non-payment of advance-tax. Para 2(e) of order dated 23-5-1996 contains no such stipulation. It is hereby clarified the making any claim for waiver of interest based on the Press Note dated 21-5-1996 is not sustainable. A Press Note is basically intended to give a broad idea in advance to the public at large regarding a policy/step under formulation. To treat a Press Note as a final legal document and to make any claim on the basis of it as against the contents of the final document is not maintainable.
3. The Board hereby reiterates that all requests for waiver of interest are to be considered by the Chief Commissioner of Income-tax and the Director General of Income-tax within the parameters laid down by Board’s order dated 23-5-1996 read with the order dated 30-1-1997.

Circular : No. 783, dated 18-11-1999.

What to watch

The operative document is the order of 23 May 1996 read with the order of 30 January 1997; the press note carries no rights.
There is no waiver limb for non-payment of advance tax as such, whatever the press note appeared to say.
Waiver lies only with the Chief Commissioner or Director General, and only within the classes those orders lay down.
The circular does not enlarge or restate those classes, so the orders themselves have to be read for any petition.

Where you meet it

In a petition to the Chief Commissioner for waiver of interest charged under section 234B, and in the order rejecting it as outside the notified classes.

On the same provision

Other instruments in this library that name the same provision of the 1961 Act. They are not necessarily still operative, and a later one may have replaced an earlier one without saying so.

Notification No. 165 — I.t. (Sixteenth Amdt.) Rules, 2005 20 June 2005

← Circular No. 784 · Circular No. 782 →

A circular binds the department, not you and not a court. The Board issues a circular to its own officers. An assessee may hold the department to a circular that helps him; the department cannot hold an assessee to one that hurts him, and the Tribunal and the courts decide the law for themselves.

Source: the Income Tax Department’s own published text — its page for this instrument.