TaxTMI 
TaxTMI 
2020 (9) TMI 734
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....id order of the learned Single Judge, filed the present intra court appeal. 3. The brief facts of the case is that respondents 1 to 5 herein are the Partnership firm dealing in different types of goods like furnishing materials, mattresses, carpets, cleaning materials etc. There was a search under Section 132 of the Income Tax Act (hereinafter called as "IT Act") on 18.03.1993 at the business premises of the firms and at the residences of the partners. In the course of the search, Shri.M.A.Jacob made a declaration u/s.132(4) offering additional income of Rs. 75,00,000/- including the investment of Rs. 45,00,000/- in the construction of M.A.Jacob Minar and Jacob Mansion, at No.12, Damodaran Street, Off Cathedral Road, Chennai, and on account of the undisclosed excess stock found at the business premises of the applicants at the time of search. Originally, all the five applicants filed applications u/s.245C(1) on 04.07.1994 for the assessment year 1993-94 which covers the previous year relevant to the date of search. The Settlement Commission, disposed of the applications by a consolidated order in S.A.Nos.21/II/33/94-IT, 21/11/35/94-IT, 21/II/34/94-IT, 21-II/32/94-II and 21/II/36....
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....of the Act. 5. The Settlement Commissioner, while considering the applications filed by both sides ie., the Partnership firm as well as the Commissioner of Income Tax and also the returns filed by the respondents 1 to 5 herein, given directions to the Assessing Officer to recompute the interest u/s.234B of the I.T.Act in view of the directions given therein and amend the order giving effect to the order of the Settlement Commission u/s.245D(4) of the Income Tax Act. It is pointed out in the Income Tax Settlement Commission (ITSC) order dated 07.01.2000 that in respect of assessment year 1995-96 in the case of M.A.Jacob's Carpets and Furnishing Co., reduced rate of 25% of the interest leviable, however, in all other cases, 50% of interest was levied for each of the assessment years. Interest u/s.234B was charged up to the date of completion of proceedings u/s.143(1)(a) or up to the date of regular assessment u/s.143(3) or up to the date of return as the case may be for all the assessment years. 6. While analysing the order passed by the ITSC dated 19.02.2004, it is apparent that the appellant/revenue filed two Miscellaneous Petitions, one dated 18.03.2002 on the basis of t....
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....red - (i) that there is no case for waiver of interest leviable u/s.234B of the Act. (ii) that the interest u/s.234B shall be charged up to the date of order u/s.245D(4) of the Act. 11.2. The miscellaneous petitions filed by the Department are allowed. 11.3. The Assessing Officer is authorised to re-compute the interest u/s.234B of the I.T.Act in view of the directions given above and amend the order giving effect to the order of the Settlement Commission u/s.245D(4) of the Income Tax Act." 8. Aggrieved by the said order dated 19.02.2004 passed by ITSC, the respondents/Partnership Firm filed W.P.No.6566 of 2004 before this court on the ground that the 2nd respondent/ITSC has no power to reopen its earlier order passed on 07.01.2000 and sought to set aside the order passed by the ITSC dated 19.02.2004. 9. The learned counsel for the appellant/revenue would submit that on the date of the passing of the first order dated 07.01.2000, the power of the court was not settled regarding grant of the waiver of interest. Subsequently, various petitions were filed before the Supreme court and the same were pending, on the issue in question. In view ....
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....ct, does not warrant interference, more so, in view of the remand by the Supreme Court in Civil Appeal Nos.8705-8706 of 1996." 11. The learned counsel for the appellant/Revenue further submits that the Honourable Supreme Court, by its decision dated March 5, 2019 in the case of Kakadia Builders (P). Ltd., Vs. Income Tax Officer Ward 1(3) reported in [2019] 103 taxmann.com 53 (SC), remanded the matter to the Settlement Commission to decide the issue relating to waiver of interest payable by the assessee, afresh keeping in view the law laid down by this court in Ghaswala (supra) and Brij lal (supra) after affording an opportunity to the parties concerned. The learned counsel thus submits that even after the decision of the learned Single Judge of this court as well as the First Bench of this Court on the same issue and further in the light of the recent decision of the Honourable Supreme Court reported in (2019) 103 taxmann.com 53 (SC), wherein, the issues raised therein, had been held in favour of the Revenue, the order passed by the learned Single Judge, dated 02.08.2017, challenged in this Writ Appeal, warrants interference and prayed for allowing the appeal. 12. The learned....
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....ase of U.Narayanamma Vs. Government of India [2013] 352 ITR 598/216 Taxman 201, rightly set aside the order of the Settlement Commission, holding that subsequent development of law cannot be a ground to exercise review jurisdiction and that cannot be taken into consideration as an error apparent on the face of the record. It is further held that the Settlement Commission/6th respondent cannot re-open the earlier order passed by the Settlement Commissioner(IT) and quashed the computation of terminal date for charging the interest under Section 234B. The learned counsel submits that the order passed by the learned Single Judge is well founded and followed the sound proposition of law and the same does not warrant interference. 13. Heard the learned counsel on either side and perused the entire materials. 14. It is not in dispute that the respondents 1 to 5 herein/assessee filed settlement applications under Section 245E of the I.T.Act, 1961 on 25.06.1997 for settlement of its cases relating to the assessment years 1988-1989 to 1992-93 and 1995-96 and allowed to proceed by the Settlement Commissioner. The Settlement Commissioner passed the Combined final order dated 07.01.2000, ....
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....of 25% of the interest is leviable for the assessment year 1995-96 in the case of M.A.Jacob's Carpets and Furnishing Co; in all other cases, restricted the levy of interest to 50% for each of the assessment years. Further it is stated that interest u/s.234B will be charged up to the date of completion of proceedings u/s.143(1)(a) or up to the date of regular assessment u/s.143(3) or up to the date of return as the case may be for all the assessment years under consideration. 17. Thereafter, the appellant/revenue filed two Miscellaneous petitions dated 18.03.2002 and 24.07.2003 stating that the Settlement Commissioner has no power to reduce or waive interest statutorily payable u/s.234A, 234B and 234C, but only to the extent of granting relief under Circulars of CBDT on the subject issued u/s.119 of the Income Tax Act. The Department also stated that adhoc waiver granted by the ITSC in its order u/s.245D(4) dated 07.01.2000 suffers from mistake as to the waiver, which appears to have been granted without taking into consideration the Circulars issued by the CBDT on the subject and thus sought for rectification and referred to decisions of Hon'ble Supreme Court in the case....
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....e Honourable Supreme Court and subsequent development of law and sought to reconsider their decision already taken in the order passed on 07.01.2000 on the application filed by the respondents 1 to 5/assessee dated 25.06.1997. The 6th respondent/ITSC also considered the decisions cited by the Department, which were decided subsequent to the order passed on 07.01.2000 and rectified the order rejecting the waiver of interest and the interest u/s.234B shall be charged up to the date of order u/s.245D(4) of the Act. 21. According to the learned counsel for the appellant/revenue, by its earlier order dated 07.01.2000, the 6th respondent/ITSC disposed of all the settlement applications made by the respondents 1 to 5/assessee. But the law on the issue was not settled at that point of time and the issues were taken before the Honourable Supreme Court. Therefore, the 6th respondent/ITSC could not pass the subsequent order on the same issue, as the issue in that regard was pending before the Supreme Court. After the order dated 07.01.2000, the issue has been decided in some cases. Therefore, the appellant herein pointed out that based on those decisions, the Department filed Miscell....
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.... [2010] Taxman 566/328 ITR 477 (SC) were rendered after the Settlement Commission passed the order in the said case and therefore, the Settlement Commission had no occasion to examine the issue in question in the context of decision rendered by this Court in the above two decisions. The conclusion of the Supreme Court, in the said decision, in paragraph 26, is as under:- " 26. In the light of what we have held above, we consider it apposite to set aside the impugned order and the order dated 11.08.2000 passed by Settlement Commission to the extent it decided the issue in relation to waiver of interest and remand the case to the Settlement Commission to decide the issue relating to waiver of interest payable by the assessee (appellants herein) afresh keeping in view the law laid down by this Court in Ghaswala (supra) and Brij lal (supra) after affording an opportunity to the parties concerned." 24. In our considered view, in the case on hand, the 6th respondent /Settlement Commission passed the order on 07.01.2000 on the settlement applications filed by respondents 1 to 5/assessee, at which point of time, law was not settled on the issue in question. Therefore, the situa....