R VIJAYALAKSHMI Vs. INCOME TAX SETTLEMENT COMMISSION; COMMISSIONER OF INCOME TAX; ASSISTANT COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) Heard Mr.T.N.Seetharaman, learned Senior counsel appearing for the petitioner, assisted by Mr.R.Kumar and Mr.Pramod Kumar Chopda, learned Senior Standing Counsel, appearing for the respondent.

(2.) All the Writ Petitions arise out of the common issue with regard to the scope and power of Settlement Commissioner under the Income Tax Act to rectify its orders. Though there are six Writ Petitions, the Writ Petitions in W.P.Nos.5553, 5555 and 5557 of 2008 are to be dealt with first. This is so because, these Writ Petitions have been filed by the Assessee, questioning the orders in the miscellaneous petitions filed by the Department before the Settlement Commission on 6.2.2003, seeking for rectification of the order passed by the commission, under Section 245D (4) of the Act. The Settlement Commission, passed the order on 19.1.2005, 13.12.2004 and 19.1.2005, respectively. The petitioners did not immediately rush to this Court but filed a miscellaneous petition before the Commission stating that the order passed by the commission on an miscellaneous petition filed by the Department is time barred. In the meantime, the third respondent viz., the Assessing Officer gave effect to the order passed by the Settlement Commission dated 19.1.2005, 13.12.2004 and 19.1.2005, and after about two years, the miscellaneous petitions filed by the petitioners were dismissed by order dated 8.8.2007. These orders are challenged by the petitioners in W.P.Nos.5554, 5556, 5558 of 2008. Therefore, the result of the second set of three Writ Petitions would solely depend upon the decision to be taken in the first set of Writ Petitions viz., W.P.Nos.5553, 5555, 5557 of 2008.

(3.) The short issue that falls for consideration is as to whether the Settlement Commission could have entertained a miscellaneous petition at the behest of the Department for rectifying its orders dated 16.7.1998, 15.10.1998 and 16.7.1998, under Section 245D(4) of the Act. The applications filed by the petitioners for settlement of their case under Section 245D was admitted by orders dated 28.2.1996, 18.1.1996, 29.2.1996 respectively. Thereafter, the Commission allowed the case to be proceeded with, and an order under sub Section 4 of Section 245D being the final order of the Commission settling the case of the petitioners was passed on 16.7.1998, 15.10.1998 and 16.7.1998 respectively. The Department did not question the orders passed by the Settlement Commission. Nor any other action was taken within a reasonable time. After about five years, on 6.2.2003, the respondent Department filed miscellaneous petitions before the Commission stating that Hon'ble Supreme Court in the case of CIT vs. Hindustan Bulk Carriers, (259 ITR 449), and CIT vs. Damani Bros. (C.A.No.7248 of 1999) has held that interest under Section 234B has to be charged for the period beginning from 1st of April next following the relevant financial year upto the date of Commission's order or under Section 245D (4). It is further stated that in the case of assessee, the Commission had ordered to charge interest under Section 234B for the respective assessment year, up to either date of order under Section 143(1)/143(1)(a) or under Section 143(3)/144 of the I.T. Act whichever is later. Therefore, by referring to the judgment of the Hon'ble Supreme Court, the Department contended that mistake has crept in the order, with regard to the terminal date in connection with charging of interest under Section 234(B) of the Act, which is apparent from the records. Therefore, they requested to rectify/recalling the order passed by the commission with regard to the terminal date for charing of interest under Section 234B. This application was allowed by the impugned proceedings.