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TMI Blog2014 (5) TMI 9X X X X Extracts X X X X X X X X Extracts X X X X ..... tification – the assessee cannot be precluded from questioning the AO’s interpretation and implementation of the Commission's order. The Commission never required the AO to charge interest de-horse the statutory scheme - the assessee had no choice but to question the very base order of the AO misapplying the directions of the Settlement Commission - the assessee all along kept his challenge alive - He cannot be penalised for his application before the Settlement Commission remaining pending nearly for a decade – thus, the order of the AO dated 4.2.2003 giving effect to the orders passed by the Settlement Commission are set aside to the extent order provides for charging interest from the respective petitioners u/s 234B and 234C of the Ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed. In view of the Special Bench decision in case of Damani bros., In re [1999] 238 ITR 36 (ITSC), the assessment completed would have to be considered as non-est. In the circumstances, the interest chargeable in respect of assessment year 1993-94 in the case of M/s. T.M. Smith and sons would have to be restricted upto the date of the order under section 143(1) (a). It is not in dispute that the petitioner paid up the remaining tax as per the order of the Settlement Commission within the time permitted. 3. Based on such order of the Commission, the Assessing Officer passed a consequential order dated 4.2.2003. In the said order, he calculated the interest under section 234B and 234C of the Act upto the stage of the Settlement Commiss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... served that in such order, necessary directions were given for charging interest under different sections as applicable in accordance with the provisions of the Act. The contention of the petitioner that newly introduced sub-section (6B) of section 245D permitting the Commission to rectify its own order in the present case was also rejected on the ground that such provision was prospective and that in any case in view of time limitation provided in the said provisions, the proceedings would be time barred. This order of the Commission was challenged by the petitioner in the present writ petition. 6. During the pendency of the petition, the petitioner also amended the petition to include the challenge to the order dated 4.2.2003 passed by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the stage of section 245D(1) under section 234B and 234C, cannot be charged. In the same judgement, the Supreme Court also laid down that the Settlement Commission has no power of rectification. 8. Sum total of the above sequence of events is that the petitioner had all along kept its application to the interest being charged under section 245D(1) alive. It may be that under mistaken bona fide belief that Settlement Commission has power of rectification, he filed such application before the Commission and such application came to be dismissed. We have noticed that application remained pending before the Commission for long number of years. Had such an application been terminated shortly after being filed, either on merits or on the groun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the very base order of the Assessing Officer misapplying the directions of the Settlement Commission. When such challenge comes before us, we must apply the law as presently prevailing. 9. Had the petitioner abandoned his cause and accepted the directions of the Settlement Commission, as understood and implemented by the Assessing Officer of charging interest even beyond the stage of section 245D(1) and thereafter, many years later relied on the decision of the Supreme Court in case of Brij Lal (supra), we would have certainly considered the Revenue's objection to such a challenge on the ground that only on delay and latches such challenge should be terminated. In the present case, the petitioner all along kept his challenge alive. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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