CIT v. M.A. Jacob & Company - Taxpublishers.in

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The Tax Publishers2020 TaxPub(DT) 3834 (Mad-HC) : (2020) 275 TAXMAN 0529

INCOME TAX ACT, 1961

Section 245

Where Settlement Commission firstly granted waiver of interest, but subsequently, rectified order rejecting waiver of interest, as Settlement Commission cannot re-open its concluded proceedings by invoking section 154 to levy interest under section 234B in view of section 245-I, subsequent order passed by Settlement Commission, was remanded back to Settlement Commission.

Settlement Commission - Power of Commission - Settlement Commission firstly granted waiver of interest, but subsequently, rectified order rejecting waiver of interest -

Assessee-partnership firm was dealing in different types of goods like furnishing materials, mattresses, carpets, cleaning materials, etc. Pursuant to a search under section 132, assessee offered additional income. Subsequently, assessee filed settlement application and Settlement Commission granted waiver of interest. However, later on Settlement Commission rectified order rejecting waiver of interest and directed that interest under section 234B shall be charged up to date of order under section 245D(4). Held: Supreme Court had an occasion to deal with said issue in Brij Lal & Others v. CIT, Jalandhar. Constitution Bench also dealt with issue in CIT v. Anjum M.H.Ghaswala. It was held that Settlement Commission cannot re-open its concluded proceedings by invoking section 154, so as to levy interest under section 234B in view of section 245I. The terminal point for the levy of interest under section 234B would be up to the date of the order under section 245D(1) and not up to the date of the Order of Settlement under section 245D(4). Sections 234A, 234B and 234C are applicable to the proceedings of the Settlement Commission under Chapter XIX-A of the Act to a certain extent. Following the said decision, subsequent order passed by the Settlement Commissioner rectifying its order insofar as it pertained to waiver of interest, based on the subsequent legal position on issue, was remanded back to Settlement Commission.

Followed:Kakadia Builders (P) Ltd. & Anr. v. ITO & Anr. (2019) 103 taxmann.com 53 (SC) : 2019 TaxPub(DT) 1650 (SC) Brij Lal & Ors. v. CIT CDJ 2010 SC 968 : (2010) 328 ITR 477 (SC) : (2010) 194 Taxman 566 (SC) : 2010 TaxPub(DT) 2312 (SC) CIT v. Anjum MH Ghaswala & Ors. (2001) 119 Taxman 352 (SC) : (2001) 252 ITR 1 (SC) : 2001 TaxPub(DT) 1637 (SC)

REFERRED : CIT v. Damani Brothers (2003) 259 ITR 475 (SC) : 2002 TaxPub(DT) 1682 (SC) CIT v. Hindustan Bulk Carriers (2003) 259 ITR 449 (SC) : 2003 TaxPub(DT) 0843 (SC) UOI v. Dr. L. Subramanian [W.A. No. 496 of 2018, dated 6-8-2018] : 2018 TaxPub(DT) 5242 (Mad-HC) M/s. M.A. Jacob & Company v. CIT [W.P. No. 6566 of 2004, dated 2-8-2017] : 2017 TaxPub(DT) 3835 (Mad-HC) R. Vijayalakshmi v. ITSC (2016) 73 taxmann.com 367 (Madras) : 2016 TaxPub(DT) 3706 (Mad-HC) Smt. U. Narayanamma and others v. Government of India (2013) 352 ITR 598 (AP) : (2013) 216 Taxman 201 (AP) : 2013 TaxPub(DT) 1281 (AP-HC) Wilson Industries v. CIT (2003) 259 ITR 318 (Mad) : 2003 TaxPub(DT) 0425 (Mad-HC) CIT v. Vijaya Productions (P.) Ltd. (2000) 245 ITR 236 (Mad) : 2000 TaxPub(DT) 0259 (Mad-HC) Gulraj Engineering Construction Co., In re (1995) 215 ITR 1 (AT) : 1995 TaxPub(DT) 1174 (ITSC)