TMI Blog2010 (5) TMI 598X X X X Extracts X X X X X X X X Extracts X X X X ..... Commission under section 245D(4) of the Income-tax Act which does not provide for any "interest" and further that the order passed by the Settlement Commission is conclusive and binding by virtue of section 245-I of the Act. So as to analyse the application of the legal provisions to the given set of facts and circumstances, it is essential to refer to some basic facts and controversies involved. The petitioner/assessee is an "astrologer" by profession, who derives income from different 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ning the income returned as "nil" and the additional income offered before the Settlement Commission as Rs.63,40,135. The total tax payable on the conceded income at the rate of 60 per cent., surcharge payable at the rate of 17 per cent. and interest under section 158BFA(1) on Rs. 44,50,700 were separately worked out showing the total as Rs. 57,85,985 and after giving credit to the payment of Rs.36,81,159, the balance sum of Rs. 21,04,826 was demanded. It is seen from the materials 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 lea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nsequential direction to the Departmental authorities to work out the tax and other amounts payable, in accordance with law and this being the position, the challenge raised against the impugned orders is not correct or sustainable. It is brought to the notice of this court that the order passed by the first respondent dismissing the application for rectification under section 154 of the Income-tax Act is not under challenge and that the same still stands. Similarly, 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) stipula ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the dispute was confined to the sustainability of imposition of surcharge, contending that the enabling provision in this regard under section 158BFA(1) was introduced only, with effect from June 1, 2002, and hence applicable only for searches conducted after June 1, 2002, thus seeking to have the surcharge deleted. In other words, the liability to satisfy "interest" under section 158BFA(1) for filing the belated return was never disputed from the part 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 a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tainable for another reason as well. The case that has been moulded in exhibit P6 petition filed before the second respondent and also in this writ petition is that, the direction/permission to realise "interest" as given in the "post script" is subject to the terms as specified in the order and since exhibit P4 order specified payment of tax alone within the specified time (lest it should attract interest under section 245D(6A)), no such liability 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 wel ..... X X X X Extracts X X X X X X X X Extracts X X X X
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