By TIOL News Service

CHENNAI, SEPT 21, 2016: THE issue is - Whether when the issue has been remanded for limited purpose, the SETCOM has jurisdiction to shift the terminal date for calculation of interest u/s 234B. NO is the verdict.

Facts of the case

The assessee is an Individual. In all these appeals the revenue has questioned the authority of Settlement Commission to either waive the statutory interest or reduce the same. This Court in the case of Commissioner of Income Tax, Mumbai Vs. Anjum M.H. Ghaswala & Ors. Reported in 2002(1) SCC 633 has held that the Settlement Commission in exercise of its powers under Sections 245(D)(4)(6) does not have the power to reduce or waive the interest statutory payable u/s 234-A, 234-B, and 234-C except to the extent of granting relief under CBDT circulars. The counsel for the revenue points out that there are two circulars issued by the Board u/s 119, one dated 2nd May, 1994 F.No.212/495/92-IT(A-II) and the other dated 23rd May, 1996 F.No.400/234/95-IT(B), the benefit of which some of the respondents herein may be entitled to. In view of the above submission on behalf of the revenue, we allow these appeals and set aside the impugned order and remand the matter back to the Settlement Commission for the limited purpose of examining whether the two circular referred to hereinabove are applicable to the facts of these appeals, if so to what relief the respondents will be entitled to.

Held that,

++ in terms of the above direction of the SC, all that the Commission was required to see as to whether the two circulars referred therein issued by the Central Board dated 02.05.1994 and 23.05.1996 would be applicable. Thus, in other words, the remand was a limited remand with a specific direction and the Commission cannot proceed beyond the said direction. In terms of the direction, the Commission has considered the matter and passed the impugned orders thereby withdrawing the waiver of interest; thus, to the above extent, the order of the Commission stands confirmed;

++ the petitioners are aggrieved only by the penultimate portion of the order where the Commission shifted the terminal date for calculation of interest u/s 234B, based on the decisions in the case of Hindustan Bulk Carrier (259 ITR 449) and CIT V. Damani Bros. (259 ITR 475), the correctness of such order is being questioned in these writ petitions. The very issue was considered by this Court in the case R.Vijayalaksmi and it was held that the Commission had no jurisdiction to reopen the matter for the purpose of shifting the terminal date. Thus, by following the above decisions, the observation of the SETCOM by extending terminal date upto 25.02.2000, calls for interference. Accordingly, the Writ Petitions are allowed to that extent and the terminal date as fixed by the Commission in its original order dated 25.02.2000, is confirmed.

(See 2016-TIOL-2195-HC-MAD-IT)