COMMISSIONER OF INCOME TAX Vs. ADDITIONAL COMMISSIONER

JUDGEMENT

(1.) THIS Original Petition is filed by the Commissioner of Income Tax, Calicut, seeking a writ of certiorari to quash Ext.P1 order of the Settlement Commission (IT & WT) Additional Bench, Chennai, first respondent herein, in so far as it pertains to waiver of interest levied on the assessee under Sub -section (2) of Section 220 of the Income -Tax Act, 1961, for the period subsequent to 10/02/1997, being the date of filing of the application before the Settlement Commission under Sub -section (1) of Section 245C of the said Act.

(2.) THE assessee, the second respondent herein, is engaged in the business of financing vehicle purchases, constructing and selling of commercial complexes and real estate. A search under Section 132 of the Income -Tax Act, 1961, hereinafter referred to as 'the Act' only, was conducted at the residential and business premises of the assessee on 01/02/1996. Notice under Section 158BC of the Act was issued on 13/06/1996 and the assessee filed return of income on 05/12/1996 declaring an amount of 4,50,000/ - as undisclosed income for the block period 1986 -87 to 1996 -97 and the tax payable was worked out at 2,70,000/ -. The assessment under Section 158BC for the block period 1986 -87 to 1996 -97 was completed on 26/02/1997 and the undisclosed income was computed at 2,10,19,540/ - and the tax payable was worked out at 1,26,11,724/ -. The assessee filed an application before the Settlement Commission, the first respondent herein, on 10/02/1997 offering additional income of 2,70,000/ - and the Settlement Commission passed Ext.P1 order under Sub -section (4) of Section 245D of the Act, arriving at a total undisclosed income of 27,51,758/ - for the block period.

(3.) HEARD the learned Standing Counsel for the petitioner and the learned counsel appearing for the second respondent.