The court emphasized the necessity for a reasoned order addressing all material contentions raised by the petitioner, particularly regarding the impact of the COVID-19 pandemic on estimating income for tax purposes.

JUDGMENT :

Advait M. Sethna, J.

1. Rule, made returnable forthwith. Respondents waive service. By consent of the parties, the petition is heard finally.

2. This petition is filed under Article 226 of the Constitution of India. Briefly, the petition challenges an order dated 30th March 2024 passed by respondent No.1 (“impugned order” for short). By the said order, the application filed by the petitioner dated 9th November 2022 seeking waiver of interest charged under Section 234C of the Income Tax Act, 1961 (“Income Tax Act” for short) for the Assessment Year 2021-22 (“A. Y. Year 2021-22” for short) stood rejected. The reliefs/prayers in the petition are set out at pages 52 to 54 in para 12 thereof. The substantive relief/prayer is to quash and set aside the impugned order passed by respondent No.1 and to grant waiver of interest for an amount of Rs.3,88,59,353/- charged under Section 234C of the Income Tax Act. Such is the limited issue for consideration before us.

A. Factual Matrix:-

3. The relevant facts need to be set out:-

The petitioner filed its return of income on 11th March 2022 for the A. Y. Year 2021-22, declaring income at Rs.3,65,12,48,710/- with book profits at Rs.11,57,63,40,425/- and total tax of Rs.2,06,03,13,939/- including interest of Rs.3,88,59,353/-. Such interest of Rs.3,88,59,353/- is charged for deferment of Advance Tax under Section 234C of the Income Tax Act for the A. Y. Year 2021-22. This is the undisputed factual position as also set out in the impugned order.

4. The details of Advance Tax paid and computation of interest payable by the assessee under Section 234C of the Act for A. Y. 2021-22 are as under:-

5. It is the petitioner’s case that the petitioner has paid Advance Tax of Rs.11 Crores for the first quarter being April to June 2020, despite suffering loss of Rs.395 Crores. The details of payment of Advance Tax and computation of interest under Section 243C of the Income Tax Act for the A. Y. Year 2021-22 are also set out in the impugned order at paragraph 2.4 thereof which is set out hereunder. The aforesaid details reveal that the petitioner has paid total Advance Tax of Rs.1,71,00,00,000/-. The total interest paid by the petitioner is an amount of Rs.3,88,59,353/- at the time of filing of returns for the said assessment year (A.Y. 2021-22).

B. Rival Submissions:-

6. Mr. Gandhi, learned counsel for the petitioner has drawn our attention to the petitioner’s application for waiver of interest dated 9th November 2022 filed for waiver of interest chargeable under Section 234C of the Income Tax Act. In support thereof, he submits that the Assessee diligently paid Advance Tax installments for the quarters commencing April to June 2020 to January to March 2021, amounting to Rs.1,71,00,00,000/- as noted hereinabove. He submits that only for the quarter July to September 2020, the Assessee could not make payment of the Advance Tax within the due date.

7. Mr. Gandhi would further submit that such fluctuations were the impact of COVID-19 pandemic on the overall business of the petitioner, which made it extremely challenging for the Assessee to correctly/properly estimate the book profits for paying the Advance Tax during A.Y. 2021-22.

8. The learned counsel places reliance on Section 234C of the Income Tax Act for the purposes of claiming waiver of interest amounting to Rs.3,88,59,353/- for the A.Y. 2021-22. In support of such submission, he places reliance on the expression ‘failure to estimate’ which appears in the said statutory provision. According to Mr. Gandhi, it was not possible for the Assessee to estimate the book profits for payment of Adv