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TMI Blog2015 (3) TMI 13X X X X Extracts X X X X X X X X Extracts X X X X ..... of admission of application by the assessee by settlement Commission under section 245D(1) and not till the final order of settlement commission under section 245D (4)?" 2) The relevant facts can be briefly narrated as under : The case of the respondent/assessee was taken up for assessement within the framework of Section 158BD of the Income-Tax Act, 1961. The assessment was made on 30.1.2002 determining undisclosed income @ Rs. 1,40,02,500/-. In the course of said proceeding, the assessee had filed application before Settlement Commission on 11.5.2001. The application was admitted by the Settlement Commission under section 245D (1) on 16th September, 2002. Final order was passed by the Settlement Commission on 30th September, 2002 dispos ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... king into account relevant provisions of IncomeTax Act, particularly provisions of Section 220 and 245D and the legal position as emerging from the decision referred to above namely, CIT vs Damani Brothers reported in 259 ITR 478, held that interest under Section 220 (2) would be legally leviable from the date of demand raised in assessment before admission of application for settlement under section 245D (1). However, if the demand stands reduced under order of Settlement Commission, interest would undergo revision correspondingly, Accordingly under its order dated 26th March, 2009 the Tribunal purported to correct the order of the Commissioner of Income Tax (Appeals) and considered that it would not be proper to say that order of the Ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cides to admit the case under section 245D (1) the proceedings under the normal provisions remain open. But, once the Commission admits the case after being satisfied that the disclosure is full and true then the proceedings commence with the Settlement Commission. In the meantime, the applicant has to pay the additional amount of tax with interest without which the application for settlement would not be maintainable. Thus, interest under section 234B would be payable up to the stage of section 245D (1)". 9) The position that interest can be charged pursuant to proceedings in normal course up to the date of decision under Section 245 D (I) of the Income Tax Act to proceed with the application appears to be prevailing. 10) In view of the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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