Settlement Commission orders bind recovery action, and interest cannot be levied beyond the terms expressly authorised in the settlement.

An Assessing Officer giving effect to a Settlement Commission order must adhere strictly to the terms of that order and cannot levy interest under section 220(2) beyond what the settlement specifically authorises. The Settlement Commission's computation and directions govern the recovery process, so any demand raised de hors that order is unsustainable. The Delhi High Court therefore quashed the orders of the lower authorities and remanded the matter for reconsideration in conformity with the Settlement Commission's settlement terms.

---

---

Issues: Whether the Assessing Officer could levy interest under section 220(2) of the Income-tax Act, 1961, contrary to the order passed by the Settlement Commission under section 245D(4) of the Income-tax Act, 1961.

Analysis: The order of the Settlement Commission contained a detailed computation, and the Assessing Officer was required to act strictly in accordance with that order while giving effect to the settlement. Interest could not be charged de hors the settlement order, and the recovery action had to conform to the terms determined by the Settlement Commission.

Conclusion: The Assessing Officer could not levy interest under section 220(2) beyond what was indicated in the Settlement Commission's order, and the matter had to be reconsidered strictly in light of that order.

Final Conclusion: The orders of the Tribunal, the first appellate authority, and the Assessing Officer were quashed, and the matter was sent back for reconsideration in accordance with the Settlement Commission's order.

Ratio Decidendi: An Assessing Officer giving effect to a Settlement Commission order must strictly adhere to that order and cannot impose interest or other recovery consequences not authorised by it.

---