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2008 (9) TMI 646 - HC - Indian LawsWaiver of interest allowed by Settlement Commission - applications filed by the petitioner for rectification of certain mistakes by Settlement Commission - Held that - In this case the Settlement Commission has rejected Ext.P2 on the ground that the issue raised is a debatable issue. Inferior courts and Tribunals are bound to follow the decision of the Constitution Bench in view of the law relating to precedents and also article 141 of the Constitution of India. So the rejection of Ext.P2 application is unjustified. Accordingly Ext.P3 order to the extent it rejects Ext.P2 is set aside and the said application is remitted to the 1st respondent for disposal in accordance with law as expeditiously as possible. Ext.P2(A) application has been rejected on the ground of limitation. In limited circumstances to correct patent mistakes inherent jurisdiction is also conceded to Courts and Tribunals. But on the facts of the case the point involved is not one where this Court should compel the Settlement Commission to entertain a time barred petition. Normally a petition barred by time limit has to be rejected. Such an order cannot be described as an order which is ultravires or one passed without jurisdiction. In the result the challenge against the rejection of Ext.P2(A) is repelled.
Issues:
1. Challenge to Ext.P3 order of the 1st respondent, Settlement Commission, rejecting rectification applications. 2. Aggrieved by waiver of interest under Sections 234A and 234B of the Income Tax Act. 3. Correcting the error in Ext.P1(A) regarding the terminal date for charging interest under Section 234B. 4. Settlement Commission's inherent power to correct mistakes under Section 245F of the Act. Analysis: 1. The Commissioner of Income Tax challenged the Ext.P3 order of the Settlement Commission rejecting rectification applications. The petitioner was aggrieved by paragraphs 7.1 and 7.2 of Ext.P1(A) related to interest charges under Section 234A and 234B of the Income Tax Act. The petitioner contended that the waiver granted was against the law laid down by the Constitution Bench of the Apex Court. The Settlement Commission rejected the applications stating that the matter was debatable based on a decision of the Calcutta High Court. However, the High Court held that when there is a direct decision of the Apex Court, inferior courts and Tribunals cannot treat it as debatable. The rejection of the rectification application was deemed unjustified, and the matter was remitted for disposal. 2. The petitioner also challenged the rejection of Ext.P2(A) application to correct the error in Ext.P1(A) regarding the terminal date for charging interest under Section 234B. The Settlement Commission rejected the application on the ground of limitation. The High Court noted that the power to review or recall an order can only be exercised if expressly conferred by statute. While acknowledging the Settlement Commission's decision as plausible, the High Court held that interference was not justified under Article 226 of the Constitution of India. The High Court upheld the rejection of Ext.P2(A) application as it involved a time-barred petition. 3. The Settlement Commission's inherent power to correct mistakes under Section 245F of the Act was also raised. The petitioner argued that the Commission should have allowed the Ext.P2(A) application. However, the High Court upheld the Settlement Commission's decision, stating that on the facts of the case, compelling the Commission to entertain a time-barred petition was not warranted. The High Court emphasized that a petition barred by the time limit should be rejected, and such an order was not ultravires or passed without jurisdiction. Conclusion: The High Court set aside the Ext.P3 order rejecting the rectification application and remitted it for disposal. The challenge against the rejection of Ext.P2(A) application was repelled, and the writ petition was disposed of accordingly.
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