2012 (3) TMI 446 - HC - Income Tax

Summary

Issues involved: Whether the Settlement Commission could reopen its concluded proceedings by invoking section 154 of the Income Tax Act, 1961 to levy interest under Section 234 B if not done initially.

Summary:
The High Court of Punjab and Haryana heard a bunch of 11 petitions where the issue was whether the Settlement Commission could reopen concluded proceedings to levy interest under Section 234 B of the Income Tax Act, 1961. The Settlement Commission had completed proceedings without imposing interest initially. The Court referred to a case where the petitioner's premises were searched, and a Settlement Application was filed. The Settlement Commission determined income and decided on interest under Sections 234 A, 234 B, and 234 C based on previous decisions. The Income Tax Department filed for rectification claiming interest should be charged until the Settlement Commission's order date. The petitioners argued against reopening settled cases citing a Supreme Court decision. The Court noted that the Settlement Commission's proceedings are akin to arbitration, distinct from regular assessments. It highlighted the different chapters of the Act governing assessment and settlement procedures. The Court held that the Settlement Commission cannot reopen concluded proceedings to levy interest under Section 234 B, emphasizing the finality of settlement assessments. The Court allowed all petitions and set aside the Settlement Commission's orders.

This judgment clarifies the scope of the Settlement Commission's authority to reopen concluded proceedings for interest under Section 234 B, emphasizing the finality of settlement assessments and distinguishing them from regular assessments under the Income Tax Act, 1961.