Settlement Commission cannot generally waive interest under sections 234A, 234B and 234C, except where valid Board instructions apply.

The Settlement Commission lacked any general power under Chapter XIXA to waive or reduce interest under sections 234A, 234B and 234C for assessment year 1989-90 onwards. Its powers under section 245F are confined to the case before it, and section 245F(7) only permits regulation of its own procedure subject to the Chapter. Board instructions under section 119(2)(a) may be given effect only where the applicant falls within a covered class, but the Commission cannot exercise that power as its own administrative discretion.

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Issues: Whether the Settlement Commission had the power to waive or reduce interest chargeable under sections 234A, 234B and 234C of the Income-tax Act, 1961, for assessment year 1989-90 and onwards.

Analysis: The statutory scheme of Chapter XIXA confines the Settlement Commission's authority to settlement of the particular case or application admitted before it. Its powers under section 245F are powers of an income-tax authority in relation to the case, and section 245F(7) only enables the Commission to regulate its own procedure, subject to the Chapter. Section 119(2)(a) confers administrative power on the Central Board of Direct Taxes to issue instructions to subordinate authorities for a class of incomes or a class of cases; that power is not an administrative power of self-direction available to the Settlement Commission. The Commission may, however, give effect in the case before it to any relaxation or instruction validly issued by the Board under section 119(2)(a) where the applicant falls within the covered class.

Conclusion: The Settlement Commission did not possess a general power to waive or reduce interest under sections 234A, 234B and 234C for assessment year 1989-90 and onwards, except where the applicant fell within a class covered by Board instructions.

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