High Court Of Kerala
Andrew Nettikkadan vs. Assistant Commissioner Of Income Tax & Ors.
Sections Art. 226, 116, 154, 245F
Asst. Year 1985-86, 1986-87, 1987-88, 1988-89, 1989-90, 1990-91, 1991-92, 1992-93, 1993-94, 1994-95
Jawahar Lal Gupta, C.J. & N.K. Sodhi, J.
Writ Appeal No. 1970 of 2003
28th November, 2003
Counsel Appeared
Dale P. Kurien, for the Appellant : P.K.R. Menon & George K. George, for the Respondents
JUDGMENT
Jawahar Lal Gupta, C.J. :
Does the Settlement Commission constituted under s. 245B of the IT Act have the power to rectify a mistake in the order passed by it? This is the short question that arises for consideration in this appeal. The relevant facts may be briefly noticed.
2. The appellant is engaged in the business of printing, etc. It had also started the work of construction of buildings. On 16th June, 1993 the appellant’s residential and business premises were searched under s. 132 of the IT Act. Cash amount of Rs. 5,90,000 and jewellery weighing 3839.100 gms, which was valued at Rs. 16,12,422 were seized. From the business premises a cash amount of Rs. 1,75,000, and 18 US dollars were taken into possession. While the proceedings were pending, the appellant filed an application dt. 27th Feb., 1996 before the Settlement Commission. This application was filed under s. 245C(1). On 21st June, 1999 the Commission passed an order under s. 245D(4). The cases for asst. yrs. 1985-86 to 1994-95 were settled. Part of the interest as leviable under ss. 234A, 234B and 234C was waived. The interest was levied only upto the date of the assessment order passed under s. 143(3) of the Act. The total taxable income was fixed at Rs. 66,33,910.
3. On 5th Feb.,2003 the Commission served a notice under s. 154 on the appellant. In this notice it is pointed out that according to the decision of their Lordships of the Supreme Court in CIT vs. Anjum M.H. Ghaswala & Ors. (2001) 171 CTR (SC) 1 : (2001) 252 ITR 1 (SC) the settlement commission had no power to waive the interest under ss. 234A, 234B and 234C, except to the extent permitted under the circulars of the Board dt. 2nd May, 1994 and 23rd May, 1996. Thus, the Department had filed an objection dt. 2nd April, 2002 for withdrawal of the waiver and recovery of interest. The request for rectification under s. 154 had to be considered. The appellant was also informed of the decision of the Supreme Court in CIT vs. Hindustan Bulk Carriers (2003) 179 CTR (SC) 362 : (2003) 259 ITR 449 (SC). In view of these decisions, the appellant was asked to file the objection or written statement for the consideration of the Commission. It appears that the appellant sought more than one adjournment. The case was fixed for 20th Aug., 2003. A request for further adjournment was made. It was posted for hearing on 20th Nov., 2003.
4. On 3rd Nov., 2003 the appellant approached this Court through a petition under Art. 226 of the Constitution to challenge the notice under s. 154. He claimed that the Commission had no jurisdiction. Thus, it prayed that the notice, a copy of which has been produced as Ex. P1, be quashed.
5. The matter was considered by the learned Single Judge. The copies of the interim orders passed in certain other cases by the Madras High Court and their Lordships of the Supreme Court were noticed. It was observed that the writ petitioner could bring the facts and the orders to the notice of the Commission. In case, the maintainability of the notice was questioned, the matter shall be examined by the competent authority. The writ petition was, accordingly, closed. Not satisfied with the judgment, the writ petitioner has filed the present appeal.
6. Mr. Kurian, learned counsel for the appellant, contends that the Commission is not competent to initiate proceedings for rectification of the order under s. 154.
7. Firstly, we find that the view taken by the learned Single Judge is absolutely correct. It is in conformity with the rule laid down by their Lordships of the Supreme Court in Union of India vs. Hindalco Industries 2003 AIR SCW 2062 that “it is inappropriate for the High Court to interfere in exercise of its jurisdiction under Art. 226 of the Constitution either in the stage of show cause or at the stage of assessment, where alternate remedy by way of filing a reply or appeal, as the case may be, is available….” Thus, we find no infirmity in the view taken by the learned Single Judge.
8. Mr. Kurian contends that the Settlement Commission is not an ‘authority’ as contemplated in Chapter XIII of the IT Act. In particular the counsel has made reference to s. 116.
9. It is undoubtedly correct that s. 116 of the Act enumerates the authorities. It is also true that s. 154 permits the ‘authorities’ specified under s. 116 to rectify the orders in case of an error apparent on the face of the record. However, a perusal of s. 245F of the Act clearly shows that the Settlement Commission has been conferred with “all powers which are vested in an IT authority under this Act.” Thus, it is clear that the Parliament has given all those powers to the Settlement Commission which are vested in the ‘authorities enumerated under s. 116. The power of rectification is one such power. Resultantly, the action of the commission in giving notice to the appellant suffers from no infirmity. There is no jurisdictional error which may vitiate the initiation of proceedings.
10. Mr. Kurian contends that in similar circumstances their Lordships of the Supreme Court had entertained a Special Leave Petition and stayed the proceedings before the Settlement Commission.
11. A copy of the order passed by their Lordships in Special Leave Petition (C) Nos. 11160-11171 of 2003 from the judgment of the Calcutta High Court has been produced as Ex. P3. This order reads as under: “Issue notice. Until further orders operation of the impugned order of the Settlement Commission dt. 7th March, 2003 shall remain stayed”.
12. A perusal of the above clearly shows that the Settlement Commission had passed some order on 7th March, 2003. Its operation was stayed. It does not appear that their Lordships of the Supreme Court had interfered with the issue of a notice. Even otherwise, nothing has been placed on record which may even remotely indicate the circumstance in which the order had been passed. The order has not been shown to the Court. No other material indicating the nature of the order and the grounds for challenge has been produced. In this situation, we find that there was no error on the part of the learned Single Judge in not staying the proceedings before the Commission.
13. Mr. Kurian submits that even the Madras High Court had issued an order of injunction and notice in W.P. Miscellaneous Petition No. 26367 of 2003 in WP No. 21216 of 2003. Even in this case, neither the writ petition nor the nature of the proceedings has been shown to us. Thus, the appellant can derive no advantage from both the orders, which are basically of an interim nature.
14. No other point has been raised.
In view of the above, we find no ground to interfere with the order of the learned Single Judge. The appeal is, accordingly, dismissed in limine.
[Citation : 266 ITR 708]
