U.NARAYANAMMA Vs. GOVERNMENT OF INDIA

JUDGEMENT

(1.) Heard Sri. M.V. Ramachandra Prasad, learned counsel for the petitioner and Sri. S.R. Ashok, learned Senior Counsel for the Income Tax for the respondents. In all these writ petitions, the several orders passed by the Income Tax Settlement Commission, Additional Bench, Chennai (for short 'the Commission') dated 26-02-2004 are challenged on the singular ground that the Commission has no power to rectify its earlier order passed under Section 245D(4) of the Income Tax Act, 1961 (for short 'the Act'). Writ Petition No. 17213 of 2004 is illustrative of the factual matrix and the applicable legal principles common to all the writ petitions.

(2.) The impugned order of the Commission pertains to the Assessment Years 1991-92 to 1993-94. Earlier an order dated 22-09-1999 was passed by the Commission under Section 245D(4) of the Act granting waiver of interest under Section 234A of the Act for Assessment Years 1992-93 and 1993-04. Interest was charged without waiver for the Assessment Year 1991-92. Waiver of interest under Section 245B was granted at 80%, 75% and 80% for the Assessment Years 1991-92, 1992-93 and 1993-94, respectively and the balance of interest directed to be levied up to the date of proceedings under Section 143(3) of the Act.

(3.) Assailing orders of the Commission dated 22-09-1999 as contrary to the guidance set out in the CBDT Circular Notification No. F. No. 400/234/95-IT(B) dated 23-05-1996, Revenue filed a miscellaneous application on 30-04-2002 and another on 14-02-2003, on the basis of the decision of the Supreme Court in CIT v. Anjum M.H. Ghaswala and others, 2001 252 ITR 1 wherein the Apex Court clarified that while the Commission arrives at the chargeable income of the assessee on the basis of records available before it, it has to levy the mandatorily chargeable tax on such income and wherever interest is due under mandatory provisions like 234A, 234B and 234C that interest should also be included under the settlement; so however that the Commission in exercise of its power under Section 245D(4) and 245D(6) of the Act may reduce or waive interest statutorily payable under Section 234A, 234B and 234C of the Act, only to the extent of granting relief under Circulars of CBDT on the subject, issued under Section 119 of the Act.