TaxTMI 
TaxTMI 
2008 (3) TMI 307
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....in cases where no interest was as such leviable under section 234B(1) and quashing the consequential directions for levy of such interest given by the Additional Bench, Bombay, of the Settlement Commission by its order dated September 11, 1995. B. that this hon'ble court be pleased to issue an appropriate writ, direction or order under articles 226 and 227 of the Constitution of India quashing the order of the Additional Bench, Bombay, of the Settlement Commission to the extent it holds that the second and third respondents are not bound to adjust Rs. 11 lakhs being the seized amount in March, 1990, against the advance tax dues of petitioners Nos. 1, 2, 6 and 9 for the assessment year 1990-91 and that they were entitled to levy interest against the said petitioners for the said assessment year under sections 234A and 234B of the Income-tax Act. C. that this hon'ble court be pleased to issue an appropriate writ, direction or order under articles 226 and 227 of the Constitution of India quashing the order of the Additional Bench, Bombay, of the Settlement Commission dated September 11, 1995, to the extent it directs the second and third respondents to levy interest on the petit....
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....th other issues. 5. In relation to the first issue, namely, whether interest was chargeable under section 234B of the Act, the Bench referred the matter to a Larger Bench. Ultimately, on March 28, 1995, the Larger Bench passed an order holding that interest was leviable under section 234B of the Act even in a case where the conditions stipulated by the provisions of sub-section (1) of section 234B of the Act were not fulfilled. The Commission, for recording such a finding, relied upon the provisions of sub-section (4) of section 234B of the Act by stating that when sub-section (4) of section 234B of the Act uses the phrase "increased or reduced" the same can be in the context of increase or reduction from nil also and it need not necessarily be a positive figure. 6. Mr. K. H. Kaji, learned advocate appearing on behalf of the petitioners, has submitted that under section 234B(1) of the Act interest is leviable only on the amount of tax which is the difference between the amount of total advance tax paid and the assessed tax as per assessment under section 143(1) of the Act or regular assessment, but, in the event, the advance tax paid is 90 per cent. or more than the figure of....
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....was also placed on the apex court decision in the case of CIT v. Anjum M. H. Ghaswala [2001] 252 ITR 1, to submit that the apex court has recorded an opinion that the Commission does not have powers to waive interest but converse therefrom cannot be deduced to mean that the Commission has powers to fasten a liability to pay interest if no liability exists. In other words, liability to pay interest cannot arise for the first time by virtue of the order made by the Commission. 7. On behalf of the respondent, Mr. B. B. Naik, learned senior standing counsel for the Revenue, submitted that in the case of CIT v. Hindustan Bulk Carriers [2003] 259 ITR 449 the order of the Special Bench of the Commission dated March 28, 1995, has been reversed by the apex court and it has been held that the order of the Commission can be treated as the second terminus for computing interest leviable under the provisions of the Act, including section 234B of the Act. It was further contended that the apex court has held that the order of the Commission has to be treated as regular assessment for the purposes of levy of interest. 8. In relation to issue No. 1, the contentions raised on behalf of the pe....
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....tion (3) of that section have exclusive jurisdiction to exercise the powers and perform the functions of the income-tax authority under the Act in relation to the case. In essence, the Commission assumes jurisdiction to deal with the matter after it decides to proceed with the application and continues to have the jurisdiction till it makes an order under section 245D. As noted by the Constitution Bench in Anjum's case [2001] 252 ITR 1 (SC), section 245D(4) is the charging section and sub-section (6) prescribes the modalities to be adopted to give effect to the order. It has to be noted that the language used in section 245D is 'order' and not 'assessment'. The order is not described as the original assessment or regular assessment or reassessment. In that sense, the Commission exercises a plenary jurisdiction. The assessee's stand before the Special Bench of the Commission was that there is no charging section for levy of interest. Such a plea did not find acceptance by the Constitution Bench in Anjum's case [2001] 252 ITR 1 (SC). The further plea that there is no requirement to pay interest as no points of terminus have been fixed is equally untenable because the Constitution Ben....