TaxTMI 
TaxTMI 
TaxTMI 
2010 (5) TMI 598
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....nt sources including from giving professional advice to people on various matters in the field of astrology ; by virtue of the business in running a "kalyanamandapam" owned by him and also from various TV programmes. The Departmental authorities conducted a search under section 132 of the Income-tax Act in the residential and business premises of the assessee on October 20, 2000. Notice was issued to the assessee under section 158BC on December 8, 2000. Since there was no response, notice under section 142(1) dated June 6, 2002, was issued calling for return of income and cash flow. Since the petitioner/assessee did not turn up, reminder was issued on August 13, 2002, proposing to complete the assessment ex parte, which also was not responded, when another letter was issued calling for the return of income, enclosing copies of valuation report of the Valuation Cell of the Department in respect of the various assets. After a lapse of nearly 21 months, the petitioner/assessee filed a return of income for the block period of 10 years on September 19, 2002. After considering the facts and circumstances, with reference to the available materials on record and also after hearing ....
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....aterials on record that the petitioner filed an application for rectification before the first respondent under section 154 of the Act, stating that he was not liable to satisfy interest under section 158BFA(1) ; which, however, was rejected by the said respondent and this order was subjected to challenge by filing a revision petition under section 264 of the Income-tax Act before the second respondent. After considering the facts and circumstances, the legal provisions and the binding judicial precedents, the second respondent passed exhibit P7 order dismissing the exhibit P6 revision petition, aggrieved by which, the petitioner has now approached this court, challenging exhibits P5 and P7. Heard the learned standing counsel for the first and second respondents as well. Shri V. Ramachandran, the learned senior counsel who addressed arguments on behalf of the petitioner submitted that exhibits P5 and P7 orders passed by the first and second respondents are per se wrong and illegal, being beyond the scope of the order to be passed under section 245D(4), contending that exhibit P4 order passed by the Settlement Commission provided for realisation of "tax alone" and on....
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...., it is also pointed out that exhibit P4 order passed by the Settlement Commission with the "post script" shown therein is also not under challenge, while the dispute/challenge is only with respect to the consequential orders, i.e., exhibits P5 and P7 ; for which reason also, the writ petition is stated as not maintainable. Reliance is also placed on the decision rendered by the Constitution Bench, as reported in CIT v. Anjum M.H. Ghaswala [2001] 252 ITR 1 (SC) which was followed by CIT v. Hindustan Bulk Carriers [2003] 259 ITR 449 (SC) and CIT v. Sant Ram Mangat Ram Jewellers [2003] 264 ITR 564 (SC), holding that there is no power for the Settlement Commission to waive statutory interest. True, section 245D(6) stipulates that the order of the Settlement Commission shall specify the tax, interest, penalty, etc., and once an order is passed by the Settlement Commission, as provided under section 245(4), it is final and binding as to the matters stated therein, as provided under section 245-I of the Act, which is extracted below : "245-I. Every order of settlement passed under sub-section (4) of section 245D shall be conclusive as to the matters stated therein and no matter ....
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.... of the petitioner. This being the position, the said liability to satisfy "interest" by virtue of specific statutory prescription under section 158BFA(1) cannot be contended as a matter "covered by exhibit P4 order" passed by the Settlement Commission, so as to attract the "ban" under section 245-I in respect of the liability to pay "interest" under the said head. The idea and understanding of the petitioner to the contrary is quite wrong and misconceived. The learned senior counsel further submitted that the word "shall" in section 158BFA(1) is liable to be read and understood as "may". The said contention does not appear to be palatable at all to this court, obviously for the reason that the different context/circumstances and different consequences contemplated under section 158BFA are separately dealt with under sub-sections (1) and (2). With regard to the liability to pay "interest" under sub-section (1) of section 158BFA, the law makers were cautious and vigilant to have used the word "shall" ; whereas, coming to the question of "penalty" to be imposed under sub-section (2) of section 158BFA, the word used is only "may". This by itself shows that the legislative wisd....
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....y to satisfy "interest" under section 158BFA is there. As referred to herein before (with reference to paragraph 16 of annexure B attached to the exhibit P2 application for settlement filed before the Settlement Commission) the issue raised for settlement before the Settlement Commission did not pertain to the liability to pay "interest" under section 158BFA(1) and it was confined rather to the "quantum of income" and also sustainability of "surcharge". Exhibit P4 order has not stated anything regarding "surcharge" and pursuant to exhibit P4 order, the first respondent has issued exhibit P5 order fixing tax, surcharge and interest under section 158BFA(1), which stands confirmed as per exhibit P7 order passed by the second respondent as well. The petitioner has not rebutted the liability to satisfy "surcharge" anywhere in the writ petition and no such argument has been addressed by the learned senior counsel before this court, in spite of the fact that exhibit P4 order, according to the petitioner, only speaks about the liability to pay tax and nothing more. The petitioner has conceded in the writ petition that the total "tax plus surcharge" (on the settlement income reckoned as Rs.....