Mandatory interest under the Income-tax Act cannot be waived by the Settlement Commission; Revenue may recover it as prescribed.

Interest under sections 234A, 234B and 234C is mandatory, and the Settlement Commission has no authority to restrict or waive it under the Income-tax Act, 1961. The Court followed its earlier rulings on the mandatory character of this interest and rejected the request to revisit those decisions on the basis that Explanation 1 to section 234B had not been considered. The Commission's attempt to limit waiver of interest was therefore unsustainable, and the Revenue was entitled to recover interest as prescribed by the Act.

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Issues: Whether the Settlement Commission had power to restrict or waive interest chargeable under section 234B of the Income-tax Act, 1961.

Analysis: The Court applied its earlier ruling that the interest contemplated under sections 234A, 234B and 234C is mandatory and that the Settlement Commission has no authority to waive such interest. The plea for reconsideration on the basis that Explanation 1 to section 234B had not been considered in the earlier decisions was not accepted.

Conclusion: The restriction of interest waiver imposed by the Settlement Commission was unsustainable, and the Revenue was entitled to recover interest as provided under the Act.

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