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of <h1>Settlement Commission's Finality Upheld, Power to Settle Disputes Clarified</h1> The Court upheld the Settlement Commission's decision, emphasizing the finality of its orders unless obtained through fraud or misrepresentation. The ... Waiver interest under Sections 234A, 234B and 234C - Settlement Commission directed that interest under Sections 234A and 234C, wherever applicable was to be charged as per law and interest chargeable under Section 234B would be charged upto the date of order passed under Section 245D(1) and that interest under Section 220(2), applicable on the sustained demand outstanding as on various dates would be charged upto the date of the order passed by the Settlement Commission - notice of demand under Section 156 - rectification application as an error apparent in calculating the interest or that no detail of interest was indicated with regard to the period or the rate stands automatically disposed of as the same Held that:- Settlement Commission having considered the request for waiver of the interest and having rejected it requires no interference by this Court. We further find that the object of notice under Section 245C under the Act was to ensure that no protracted proceedings takes place before the authorities or in courts and in order to avoid lengthy proceedings, a provision was made for settlement of cases to ensure that a finality is arrived at. In Smt. Neeru Agarwal Vs. Union of India (2009 (12) TMI 12 - HIGH COURT OF ALLAHABAD ) a Division Bench of this Court held that the provision of Section 245D read with Section 245 indicates that the order passed by the Settlement Commission has to be treated as conclusive unless it was obtained by fraud or misrepresentation. Similar view was reiterated in Commissioner of Income-tax-I, Lucknow Vs. Smt. Diksha Singh, (2011 (8) TMI 467 - ALLAHABAD HIGH COURT) In the light of the aforesaid, we do not find any justification to interfere in the notice of demand that was issued pursuant to the order of Settlement Commission. Issues:Search & seizure operations under Section 132 of the Income Tax Act, 1961; Settlement application under Section 245C (1) of the Act; Errors in Settlement Commission's order under Section 245D (1); Demand notice under Section 156 of the Act; Consideration of circular issued by CBDT for waiving interest; Rectification application under Section 154 of the Act; Interpretation of Section 245D(6) of the Act; Scope of power of Settlement Commission; Finality of Settlement Commission's order.Search & Seizure Operations:The income tax authorities conducted search & seizure operations under Section 132 of the Income Tax Act, 1961, leading to the seizure of Fixed Deposit Receipts, cash, and stocks of sugar, along with incriminating documents. Subsequently, a notice under Section 148 of the Act was issued for assessment years 1991-92 to 1994-95, prompting the petitioners to approach the Settlement Commission by filing an application under Section 245C (1) of the Act.Errors in Settlement Commission's Order:The Settlement Commission initially passed an order under Section 245D (1) of the Act, which was later recalled due to errors, resulting in prolonged litigations. After several legal proceedings, a fresh order was issued under Section 245D(4) of the Act in 2012, leading to the issuance of a demand notice under Section 156 of the Act in 2012, which the petitioners contested through a writ petition.Consideration of Circular by CBDT and Rectification Application:The petitioners argued that the Settlement Commission erred in not considering a circular by the CBDT regarding interest waiver. They contended that the demand notice lacked specific details of interest rates and periods, leading to a request for quashing the notice. Additionally, a rectification application under Section 154 of the Act was filed, challenging the interest calculation, which was later rejected by the authority.Interpretation of Section 245D(6) and Scope of Settlement Commission's Power:The Court analyzed Section 245D(6) of the Act in light of the Supreme Court's interpretation in CIT Vs. Anjum M.H. Ghaswala, emphasizing that the Settlement Commission's role is to settle disputes in accordance with the Act's provisions. The Court clarified that the Commission's power does not extend to waiving or reducing tax, penalty, or interest beyond stipulating payment conditions.Finality of Settlement Commission's Order:Referring to previous judgments, the Court highlighted that orders passed by the Settlement Commission should be conclusive unless obtained through fraud or misrepresentation. Citing Smt. Neeru Agarwal Vs. Union of India and Commissioner of Income-tax-I, Lucknow Vs. Smt. Diksha Singh, the Court upheld the Settlement Commission's decision, dismissing the writ petition due to lack of justification for interference in the demand notice issued post the Settlement Commission's order.
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