Settlement Commission interest liability and rectification powers under the Income-tax Act referred to Constitution Bench

Whether interest under sections 234A, 234B and 234C of the Income-tax Act applies in proceedings before the Settlement Commission under Chapter XIX-A, and whether the Commission can use section 154 to reopen concluded matters to levy such interest, were referred for consideration by a Constitution Bench. The document records the legal controversy on the applicability of compensatory interest and the scope of the Commission's power to correct or revise settlements through rectification.

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Issues: Whether sections 234A, 234B and 234C of the Income-tax Act, 1961 apply to proceedings before the Settlement Commission under Chapter XIX-A of the Income-tax Act, 1961, and whether the Settlement Commission can reopen concluded proceedings by recourse to section 154 of the Income-tax Act, 1961 to levy such interest.

Outcome: The questions were directed to be considered by a Constitution Bench.

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