ANDREW NETTIKKADAN Vs. ASSISTANT COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) Does the Settlement Commission constituted under S.245B of the Income Tax Act have the power to rectify a mistake in the order passed by it This is the short question that arises for consideration in this appeal. The relevant facts may be briefly noticed.

(2.) The appellant is engaged in the business of Printing, etc. It had also started the work of construction of buildings. On June 16, 1993 the appellant's residential and business premises were searched under S.132 of the Income Tax Act. Cash amount of Rs.5,90,000/- and jewellery weighing 3839.100 gms., which was valued at Rs.16,12,422/- were seized. From the business premises a cash amount of Rs.1,75,000/- and 18 US dollars were taken into possession. While the proceedings were pending, the appellant filed an application dated February 27, 1996 before the Settlement Commission. This application was filed under S.245(C)(1). On June 21, 1999 the Commission passed an order under S.245 D(4). The cases for Assessment Years 1985-86 to 1994-95 were settled. Part of the interest as leviable under Ss.234A, 234B and 234C was waived. The interest was levied only upto the date of the assessment order passed under S.143(3) of the Act. The total taxable income was fixed at Rs.66,33,910/-.

(3.) On February 5, 2003 the Commission served a notice under S.154 on the appellant. In this notice it is pointed out that according to the decision of their Lordships of the Supreme Court in Commissioner of Income Tax v. Anjum M.H. Ghaswala ( 2001 (252) ITR 1 ) the Settlement Commission had no power to waive the interest under Ss.234A, 234B and 234C, except to the extent permitted under the Circulars of the Board dated May 2, 1994 and May 23, 1996. Thus, the Department had filed an objection dated April 2, 2002 for withdrawal of the waiver and recovery of interest. The request for rectification under S.154 had to be considered. The appellant was also informed of the decision of the Supreme Court in Commissioner of Income Tax v. Hindustan Bulk Carriers ( 2003 (259) ITR 449 ). In view of these decisions, the appellant was asked to file the objection or written statement for the consideration of the Commission. It appears that the appellant sought more than one adjournment. The case was fixed for August 20, 2003. A request for further adjournment was made. It was posted for hearing on November 20, 2003.