Petitioner, a cooperative society, claimed exemption under Section 80P(2). Based on the jurisdictional High Court’s 1989 ruling, which was unsettled by the Supreme Court in 1998 and followed by a retrospective amendment, the petitioner did not pay advance tax. Assessing Officer denied exemption and charged interest under Section 234B. Petitioner sought waiver of interest under Section 234B relying on CBDT Circulars dated 23-05-1996 and 30-01-1997. Chief Commissioner rejected the application on the ground that the Supreme Court’s 1993 view denying exemption prevailed until 1998, and thus the petitioner was liable to pay advance tax and, having failed to do so, was liable to pay interest under Section 234B. Court held that since the petitioner did not deposit tax on account of lack of clarity on the issue involved and the petitioner being a Public Sector Undertaking, had no mala fide intention to evade or avoid payment of tax, the petitioner was entitled to waiver of interest payable.  (AY. 1998-99)