Guidelines adhered to by CC/ DG of income tax while ordering waiver under section 201(1A) of Income Tax Act

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CBDT had issued a circular no.11/2017 dated 24th March,2017 while exercising powers under section 119 of the Income Tax Act, for the guidance of the chief commissioner/ Director General of income tax while allowing a waiver in respect of interest charged under section 201(1A) of the Income Tax Act,1961. The points for consideration under the circular are as follows;

The Chief Commissioner/ Director General income tax will may reduce or waiver of interest in the following cases as enumerated below;

  • Where owing to search and seizure of books of account under section 132 of the Income Tax Act,1961 the assesse was not able to deduct the TDS with in the stipulated time limit.
  • Where the sum paid /credited was not liable for tax deduction owing to an order of the jurisdictional high court, and the TDS becomes applicable on the sum pursuant to the retrospective amendment in the law, order of supreme court and the order of higher bench of the same high court
  1. Even if the interest under section 201 (1A) has already been paid by the deductor, the same can be considered for the waiver provided other conditions are obliged.
  2. The chief commissioner and Director General are required to pass a speaking order for an application for waiver of interest after providing a reasonable opportunity of being heard.
  3. The board reserves the power to examine any grievance arising out of an order passed or not passed by a chief commissioner or director general and can issue suitable directions for these authorities.
  4. No reduction of waiver of interest shall be ordered unless the demand under section 200A,201(1A),234E stands fully paid, or satisfactory arrangement for the same has been made.
  5. While making an order for reduction and waiver and interest Chief commissioner /Director General may impose any other condition as he may deem fit.


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