ARAVINDA PARIMALA WORKS Vs. INCOME TAX SETTLEMENT COMMISSION

JUDGEMENT

(1.) THE petitioner herein is a firm. For the assessment years 1983-84 to 1987-88, it preferred an application under Section 245-C of the Income Tax Act before the first respondent herein for settlement of its liability under the Income Tax Act. By order dated 22. 3. 1993, the first respondent quantified the income and the liability; thus included the interest under Section 139 (8), 215/217 and penalty under Section 271 (1) (c ). The Settlement Commission held that for the assessment year 1983-84, no interest was leviable under Section 139 (8 ). As regards the assessment years 1984 85 and 1985-86, interest would be charged as due and for the year 1986-87, interest would be for a period of six months. However, for 1987-88 the Settlement Commission condoned delay in filing the return and waived the interest under Section 139 (8 ). As regards the penalty under Section 271 (1) (c), the Settlement Commission imposed the minimum penalty.

(2.) AS regards the levy or waiver of interest under Section 215/217 of the Act, the petitioner states that there was no finding in the order of the first respondent dated 22. 3. 1993. The petitioner states that in the course of implementing the order of the first respondent, the second respondent determined the tax and interest payable for the relevant assessment years. This included levy of interest under Section 215/217. By order dated 27. 4. 1993, the second respondent determined the interest under Section 215/217 payable for the assessment years 1983-84 to 1987-88. It is stated that the petitioner objected to the said levy. By order dated 1. 10. 1993, the second respondent rejected the claim of the petitioner. He held that when the Settlement Commission's order was silent as regards the levy of interest, the same was attracted as per the provisions of the Act. Thereupon, the writ petitioner challenged the same in W. P. Nos. 39375- 79/93 before the Karnataka High Court.

(3.) BY order dated 11. 2. 1999, the Karnataka High Court dismissed the writ petition holding that the proper remedy was to approach the Settlement Commission and that the Assistant Commissioner had rightly rejected the appeal. The writ petitioner went on further appeal before the Division Bench in W. A. No. 2702-706/99. By order dated 7. 7. 1999, the Division Bench while confirming the order of the single Judge, reserved the liberty to the petitioner herein to approach the Settlement Commission for appropriate orders. Thus the writ appeal was dismissed observing that if and when an application was filed, the Settlement Commission will proceed to decide the same in accordance with law.