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2021 (12) TMI 1088 - HC - Income TaxInterest charged u/s 220 - Settlement Commission order under Section 245D(4) - HELD THAT:- The effect of the first proviso to sub-Section (2) to Section 220 will be that the amount on which the interest is payable under sub-Section (2) of Section 220 will get modified according to the Appellate order. As seen from the proviso to sub-Section (2) of Section 220, there can be variation in charging interest if ultimately due to the result of Appellate order, the liability to pay the original amount on which interest is levied under Section 220 ceases, accordingly, the Assessee needs to be given the benefit of reduction in interest resulting in reduced payment of interest. In the facts of the present case, CIT(A)(VI), Bombay, by order dated 30/03/1995, directed the Assessing Officer to withdraw the investment allowance granted under Section 32A of the Act. Accordingly, demand notice under Section 156 of the Act came to be issued to Respondent No.1. The said amount of interest on investment allowance under Section 32A was directed to be waived by order dated 05/06/1998 by the Settlement Commission. Petitioners therefore filed an application for recalling the order dated 05/06/1998, which by the impugned order was rejected. The issue involved in the present Petition is restricted only to the liability of Respondent No.1 to pay interest under Section 220 of the Act on the amount of set off of brought forward investment allowance. As per proviso to sub-Section (2) of Section 220 of the Act, once the amount on which interest was charged gets extinguished, consequently the liability of Respondent No.1 to pay interest on said amount will also be extinguished. Mr. Walve is right in submitting that as per Section 245(i) of the Act, the order passed by Settlement Commission is conclusive and binding on all authorities under the Act. But in our opinion, it is not necessary to go into said issue, since the result of the order passed is to extinguish the liability of Respondent No.1 to pay the amount on which the interest was charged under Section 220 of the Act, interference under Article 226 which is discretionary, would result into the revival of illegality. We are therefore of the view that interference by this Court in the present Writ Petition would result in direction to Respondent No.1 to pay interest on an amount which had been extinguished due to the Judgment and consequently will result into miscarriage of justice. The power under Article 226 needs to be exercised to prevent miscarriage of justice. It will be exercised only in furtherance of interest of justice and not merely on the making out of a legal point.
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