High Court Of Andhra Pradesh
Smt. U. Narayanamma vs. Government Of India And Others
Section 245D, 245B, 234A, 154
Asst. Year 1991-92 to 1993-94
Goda Raghuram & M. S. Ramachandra Rao, JJ.
Writ Petition Nos. 17213, 17207, 17217, 18661 and 18840 of 2004
1st March, 2013
Counsel appeared
M. V. Ramachandra Prasad for the Petitioner.: S. R. Ashok, Senior Standing for the Respondent
Goda Raghuram, J.
1. Heard Sri M.V. Ramachandra Prasad, learned counsel for the petitioner and Sri S.R. Ashok, learned Senior Counsel for the Income Tax for the respondents. In all these writ petitions, the several orders passed by the Income Tax Settlement Commission, Additional Bench, Chennai (for short ‘the Commission’) dated 26-02-2004 are challenged on the singular ground that the Commission has no power to rectify its earlier order passed under Section 245D(4) of the Income Tax Act, 1961 (for short ‘the Act’). Writ Petition No. 17213 of 2004 is illustrative of the factual matrix and the applicable legal principles common to all the writ petitions.
The impugned order of the Commission pertains to the Assessment Years 1991-92 to 1993-94. Earlier an order dated 22-09-1999 was passed by the Commission under Section 245D(4) of the Act granting waiver of interest under Section 234A of the Act for Assessment Years 1992-93 and 1993-04. Interest was charged without waiver for the Assessment Year 1991-92. Waiver of interest under Section 245B was granted at 80 percent, 75 percent and 80 percent for the Assessment Years 1991-92, 1992-93 and 1993-94, respectively and the balance of interest directed to be levied up to the date of proceedings under Section 143(3) of the Act. Assailing orders of the Commission dated 22-09-1999 as contrary to the guidance set out in the CBDT Circular Notification No. F.No. 400/234/95-IT(B) dated 23-05-1996, Revenue filed a miscellaneous application on 30-04-2002 and another on 14-02-2003, on the basis of the decision of the Supreme Court in CIT v. Anjum M.H. Ghaswala and others, (2001) 252 ITR 1 (SC) wherein the Apex Court clarified that while the Commission arrives at the chargeable income of the assessee on the basis of records available before it, it has to levy the mandatorily chargeable tax on such income and wherever interest is due under mandatory provisions like 234A, 234B and 234C that interest should also be included under the settlement; so however that the Commission in exercise of its power under Section 245D(4) and 245D(6) of the Act may reduce or waive interest statutorily payable under Section 234A, 234B and 234C of the Act, only to the extent of granting relief under Circulars of CBDT on the subject, issued under Section 119 of the Act.
On the miscellaneous applications preferred by Revenue, the Commission passed the impugned revised order dated 26-02-2004 concluding that there occurred a mistake in the earlier order as regards charging of interest up to the date of proceedings under Section 143(3) of the Act; that the error could be rectified in the light of the Supreme Court decision referred to above; that as regards interest under Section 234A there is no entitlement for waiver for Assessment Year 199394, consequently interest under the said provision for the said Assessment Year must be charged fully; and that interest under Section 234B is to be charged up to the date of the order of the Commission under Section 245D(4) of the Act. Thus, exercising rectification powers not available to the Commission, the impugned order dated 26-02-2004 was passed. The writ petitions are filed challenging them.
In Brij Lal v. Commissioner of Income Tax, (2010) 328 ITR 477, Supreme Court ruled that the Commission could not reopen its concluded proceedings by recourse to Section 154 of the Act so as to levy interest under Section 234B, if it was not done in the original proceedings by it.
In the light of the decision of the Supreme Court in Brij Lal (2 supra), the impugned order of the Settlement Commission cannot be sustained and must perish. Sri S.R. Ashok, learned Senior counsel for the Income Tax would however contend that the original order of the Commission dated 22-09-1999 is contrary to the Board Circular referred to and therefore contrary to the decision of the Supreme Court in CIT v. Anjum M.H. Ghaswala (1 supra). No Mandamus/Certiorari could therefore be issued invalidating the impugned order of Commission (dated 26-02-2004) which would revive the earlier order of the Commission dated 2209-1999 which was clearly contrary to the CBDT Circular No. F.No. 400/234/95-IT(B) dated 23-051996. Sri S.R. Ashok referred to the decision of the Supreme Court which enunciated the principle that issuance of the discretionary Writ of Mandamus must be withheld where invalidation of an order would be revive an earlier illegal order. In Gadde Venkateswara Rao v. Government of Andhra Pradesh, AIR 1966 SC 828 an earlier order passed by the Dharmajigudem Gram Panchayat was considered invalid on account of violation of principles of natural justice. Invalidation of the order in challenge would therefore result in revival of the earlier invalid order. In the circumstances relief was refused. In Gadde Venkateswara Rao ( 3 supra) relief was declined since it would have led to revival of a patently void order. Such is not the error in the present case. The earlier order of the Commission dated 22- 09-1999 though contrary to the Board Circular referred to and considered in the light of the judgment in CIT v. Anjum M.H. Ghaswala and others (1 supra) was an error within the jurisdiction of the Commission and not an error that goes to the root of its jurisdiction.
The appropriate course of action for Revenue ought to have been to challenge the order of the Commission perhaps by way of Certiorari. An application for rectification under Section 154 of the Act was however impermissible and beyond the jurisdiction of the Commission, as held in Brij Lal (2 supra).
On the aforesaid analysis, the order of the Settlement Commission dated 26-02-2004 cannot be sustained and is accordingly quashed.
In the facts and circumstances W.P.Nos. 17207; 17217; 18661 and 18840 of 2004 which involve identical facts and circumstances as in W.P.No. 17213 of 2004, are also allowed and the several orders of the Settlement Commission dated 26-02-2004 impugned in the above writ petitions are also quashed.
The writ petitions are allowed as above. But in the circumstances without costs.
[Citation : 352 ITR 598]
