The Commissioner Of Income Tax-Ivchennai-600 034 v. M/S.m.a.jacob & Company

IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED : 15.09.2020 CORAM: THE HON'BLE MR.JUSTICE N.KIRUBAKARANandTHE HON'BLE MR.JUSTICE P.VELMURUGAN W.A.No.456 of 2018 The Commissioner of Income Tax-IVChennai-600 034 ..Appellant/1[st] respondent -Vs- 1. M/s.M.A.Jacob & Company No.16, Evening Bazaar Chennai-600 003 2. M/s.Flooring & Furnishing Company No.18, Evening Bazaar Chennai-600 003 3. M/s.Jacob's Cleaning Products Company No.17, Evening Bazaar Chennai-600 003 4. M/s.M.A.Jacob's Furnishing Department No.22, Evening Bazaar Chennai-600 003 5. M/s.M.A.Jacob's Carpets & Furnishing Company No.10 & 11, Damodharan Street No.38-A, Cathedral Road Chennai-600 086..Respondents 1 to 5 Petitioners 1 to 5/assessee 6.The Income Tax Settlement Commission 640, Anna Salai, Nandanam Chenna-600 035..6[th] Respondent/2[nd] respondent/ITSC. Prayer: Writ Appeal filed under Clause 15 of Letters Patent,against the Final order dated 02.08.2017 in W.P.No.6566 of 2004. W.P.No.6566 of 2004 Prayer: Petition under Article 226 of theConstitution of India praying for issue of a Writ of Certiorari https://hcservices.ecourts.gov.in/hcservices/ to call for the records relating to the order dated 19.02.2004passed by the 2[nd] respondent and quash the same. For Appellant : Ms.Hema Muralikrishnan For Respondents : Mr.Thomas T.Jacob for R1 to R5. JUDGMENT P.VELMURUGAN,J. This Writ Appeal is filed against the Final order dated02.08.2017 passed in W.P.No.6566 of 2004. The respondents 1 to 5herein filed W.P.6566 of 2004 seeking to issue a Writ ofCertiorari calling for the records relating to the order dated19.02.2004 passed by the 2[nd] respondent/ Income Tax SettlementCommission and quash the same. 2. The learned Single Judge, after hearing the submissionsmade on both sides, set aside the order passed by the Income TaxSettlement Commission. The 1st respondent therein/Commissionerof Income Tax, aggrieved by the said order of the learned SingleJudge, filed the present intra court appeal. 3. The brief facts of the case is that respondents 1 to 5herein are the Partnership firm dealing in different types ofgoods like furnishing materials, mattresses, carpets, cleaningmaterials etc. There was a search under Section 132 of theIncome Tax Act (hereinafter called as “IT Act”) on 18.03.1993 atthe business premises of the firms and at the residences of thepartners. In the course of the search, Shri.M.A.Jacob made adeclaration u/s.132(4) offering additional income ofRs.75,00,000/- including the investment of Rs.45,00,000/- in theconstruction of M.A.Jacob Minar and Jacob Mansion, at No.12,Damodaran Street, Off Cathedral Road, Chennai, and on account ofthe undisclosed excess stock found at the business premises ofthe applicants at the time of search. Originally, all the fiveapplicants filed applications u/s.245C(1) on 04.07.1994 for theassessment year 1993-94 which covers the previous year relevantto the date of search. The Settlement Commission, disposed ofthe applications by a consolidated order in S.A.Nos.21/II/33/94-IT,21/11/35/94—IT,21/II/34/94-IT,21-II/32/94-IIand21/II/36/94 on 30.09.1996. The additional income offered by theapplicants for the said assessment year was stated to be inrelation with unrecorded sales, unconfirmed credit purchases,etc., (b) The Settlement Commission, instead of following themethod adopted by the Assessing Officer of estimating the https://hcservices.ecourts.gov.in/hcservices/ (b) The Settlement Commission, instead of following themethod adopted by the Assessing Officer of estimating the https://hcservices.ecourts.gov.in/hcservices/ turnover by multiplying the incentives paid to the employees ata particular multiplying factor, they found the investmentmethod preferable as a better index for computation of income.Accordingly, the investment in unrecorded stock, cost of air-conditioners, were taken into consideration and the income sodetermined was apportioned among the five different firms. Inthe application for 1993-94, the applicant was M/s.CarpetCentre. In the other application confined to the assessment year1995-96, the applicant was M/s.M.A.Jacob's Crapets & FurnishingCo. In the case of other firms, the application covers theassessment years 1988-89 to 1992-93. However, in the case ofM/s.M.A.Jacob & Company, there were no proceedings pending atthe time of filing of the application for the assessment years1988-89 and 1989-90. In the case of M.A.Jacob's furnishingDepartment, M/s.Flooring & Furnishing Co., and M/s.M.A.Jacob'sCleaning Products Co., there were no proceedings pending for theassessment year 1988-89. These applicants have pleaded that theassessments for those years in their cases may be reopenedu/s.245E, since according to the applicant group, variousinvestments include the introduction of capital in the new firmwhich has come out of the suppressed income of all the oldfirms. In this process, the accounting year 1987-88 has also tobe considered, since the investments had started during the saidyear. After careful consideration, the Settlement Commission wasof the opinion that for a comprehensive settlement of the casesof the entire group, it is necessary to reopen the abovementioned assessment years and the said firm cases u/s.245E.Accordingly, the Settlement Officer, opened the cases for theassessment years 1988-89 and 1989-90 u/s.245E of the Act. 4. In the said background, 6[th] respondent/Income TaxSettlement Commission passed the order dated 19.02.2004,rejecting the prayer for waiver of interest levied under Section234B of the Act and further ordered that the interest u/s.234Bshall be charged up to the date of order u/s.245D(4) of the Act. 5. The Settlement Commissioner, while considering theapplications filed by both sides ie., the Partnership firm aswell as the Commissioner of Income Tax and also the returnsfiled by the respondents 1 to 5 herein, given directions to theAssessing Officer to re-compute the interest u/s.234B of theI.T.Act in view of the directions given therein and amend theorder giving effect to the order of the Settlement Commissionu/s.245D(4) of the Income Tax Act. It is pointed out in theIncome Tax Settlement Commission (ITSC) order dated 07.01.2000that in respect of assessment year 1995-96 in the case ofM.A.Jacob's Carpets and Furnishing Co., reduced rate of 25% ofthe interest leviable, however, in all other cases, 50% ofinterest was levied for each of the assessment years. Interestu/s.234B was charged up to the date of completion of proceedings u/s.143(1)(a) or up to the date of regular assessment u/s.143(3)or up to the date of return as the case may be for all theassessment years. u/s.143(1)(a) or up to the date of regular assessment u/s.143(3)or up to the date of return as the case may be for all theassessment years. 6. While analysing the order passed by the ITSC dated19.02.2004, it is apparent that the appellant/revenue filed twoMiscellaneous Petitions, one dated 18.03.2002 on the basis ofthe subsequent development of law on the issue raising the pointthat the adhoc waiver granted by the ITSC in its order u/s.245D(4) dated 07.01.2000 suffers from mistake as the waiver grantedby the Settlement Commission appears to have been grantedwithout taking into consideration the Circulars issued by theCBDT on the subject and therefore, sought for rectification ofthe said order of ITSC. The second Miscellaneous Petition wasfiled on 24.07.2003 requesting for rectification on the basis ofthe decision of the Hon'ble Supreme Court in the case of CIT Vs.Hindustan Bulk Carriers (2003) 259 ITR 449 (SC) and CIT Vs.Demani Brothers (2003) 259 ITR 475 (SC). It is stated thatinterest under Section 234B is to be charged for the periodbeginning from the 1[st] day of April next following the relevantfinancial year up to the date of order of ITSC u/s.245D(4). 7. The 6[th] respondent/Income Tax Settlement Commission,considered all the submissions made by both parties and followedthe decisions rendered by the Honourable Apex Court and variousHighCourts,andpassedtheorderdated19.02.2004 and held that at the point of time when the orderu/s.245D(4) was passed by the ITSC, the judgments of Hon'bleSupreme Court in the case of CIT vs. Anjum M.H.Ghaswala andOthers (2001) 119 taxman 352/252 ITR 1 (SC) and CIT Vs.Hindustan Bulk Carriers (2003) 126 taxman 321/259 ITR 449 (SC)were not available; at that time, the ITSC had taken a decisionto waive/reduce the interest leviable u/s.234B of the Act, butthe ITSC had not taken into consideration the conditionsenumerated by Board's communication being order u/s.119(2)(a) ofthe Act, this action of the ITSC stood mistaken in view of thesubsequent decisions of the Supreme Court in the case of CIT vs.Anjum M.H.Ghaswala and Others (2001) 252 ITR 1 (SC). It ispointed out that “the ITSC had also ordered charging of interestup to the date of order u/s.143(1)(a)/143/144 relying on thedecision of Gulraj Engineering Co.Ltd., (1995) 215 ITR 1 (AT).The order of the ITSC also becomes erroneous and hence mistakenin view of the subsequent decision of Hon'ble Supreme Court inthe case of CIT Vs. Hindustan Bulk Carriers (2003) 259 ITR 449(SC).” The Income Tax Settlement Commission/6[th]respondent,therefore, passed the order as under:- “ORDER11.1 In view of the above, it is hereby ordered -(i) that there is no case for waiver of interest leviable u/s.234B of the Act.(ii) that the interest u/s.234B shall be charged upto the date of order u/s.245D(4) of the Act. 11.2. The miscellaneous petitions filed by theDepartment are allowed.11.3. The Assessing Officer is authorised to re-computethe interest u/s.234B of the I.T.Act in view of thedirections given above and amend the order giving effectto the order of the Settlement Commission u/s.245D(4) ofthe Income Tax Act.” 8. Aggrieved by the said order dated 19.02.2004 passed byITSC, the respondents/Partnership Firm filed W.P.No.6566 of 2004before this court on the ground that the 2[nd] respondent/ITSC hasno power to reopen its earlier order passed on 07.01.2000 andsought to set aside the order passed by the ITSC dated19.02.2004. leviable u/s.234B of the Act.(ii) that the interest u/s.234B shall be charged upto the date of order u/s.245D(4) of the Act. 11.2. The miscellaneous petitions filed by theDepartment are allowed.11.3. The Assessing Officer is authorised to re-computethe interest u/s.234B of the I.T.Act in view of thedirections given above and amend the order giving effectto the order of the Settlement Commission u/s.245D(4) ofthe Income Tax Act.” 8. Aggrieved by the said order dated 19.02.2004 passed byITSC, the respondents/Partnership Firm filed W.P.No.6566 of 2004before this court on the ground that the 2[nd] respondent/ITSC hasno power to reopen its earlier order passed on 07.01.2000 andsought to set aside the order passed by the ITSC dated19.02.2004. 9. The learned counsel for the appellant/revenue wouldsubmit that on the date of the passing of the first order dated07.01.2000, the power of the court was not settled regardinggrant of the waiver of interest. Subsequently, variouspetitions were filed before the Supreme court and the same werepending, on the issue in question. In view of the unsettledproposition of law at that relevant point of time, the 6[th]respondent, passed the order dated 19.02.2004. However,subsequently, law has been settled by the Honourable SupremeCourt in the decisions CIT Vs. Hindustan Bulk Carriers (2003)259 ITR 449 (SC) and CIT Vs. Demani Brothers (2003) 259 ITR 475(SC). In such circumstances, the Commissioner of Income Tax-IV,filed two Miscellaneous Petitions before the 6[th] respondent/ITSC,seeking rectification. While considering the subsequentdevelopment of law as held by the Honourable Supreme Court inthe above referred to decisions, the Authority has changed theview that there is no case for waiver of interest leviableu/s.234B of the Act and that interest u/s.234B shall be chargedup to the date of order u/s.245D(4) of the Act. 10. The learned counsel for the appellant/revenue has alsoplaced reliance on the decision reported in CDJ 2010 SC 968[Brij Lal & others Vs. Commissioner of Income Tax, Jalandhar].She would further submit that the learned Single Judge failed toconsider the subsequent development of law on the issue inquestion in the case of Brij Lal & others Vs. Commissioner ofIncome Tax, Jalandhar , but followed theearlier order passed by this court reported in [2016] 73taxmann.com 367(Madras) [R.Vijayalakshmi Vs. Income TaxSettlement Commission], order dated 26.07.2016, wherein, thiscourt, allowed the writ petition in favour of the assessee andset aside the order passed by the Settlement Commission. Even after the said decision of the learned Single Judge, the FirstBench of this Court, in respect of the same issue, passed theorder dated 06.08.2018 in W.A.No.496 of 2018 [Union of India Vs.Dr.L.Subramanian] and answered the questions of law raised infavour of the appellant/Revenue Department and allowed the WritAppeal. The First Bench of this Court, held as follows:-“19. Interest under Section 234B of the 1961 Act isto be charged up to the date of order under Section 245D(4) of the 1961 Act. The order of the SettlementCommission that the respondent assessee would be entitledto waiver of interest leviable under Section 234A of the1961 Act; that there is no case for waiver of interestleviable under Section 234B of the 1961 Act; and thatinterest under Section 234B shall be charged up to thedate of the order under Section 245D(4) of the 1961 Act,does not warrant interference, more so, in view of theremand by the Supreme Court in Civil Appeal Nos.8705-8706of 1996.” 11. The learned counsel for the appellant/Revenue furthersubmits that the Honourable Supreme Court, by its decision datedMarch 5, 2019 in the case of Kakadia Builders (P). Ltd., Vs.Income Tax Officer Ward 1(3) reported in [2019] 103 taxmann.com53 (SC), remanded the matter to the Settlement Commission todecide the issue relating to waiver of interest payable by theassessee, afresh keeping in view the law laid down by this courtin Ghaswala (supra) and Brij lal (supra) after affording anopportunity to the parties concerned. The learned counsel thussubmits that even after the decision of the learned Single Judgeof this court as well as the First Bench of this Court on thesame issue and further in the light of the recent decision ofthe Honourable Supreme Court reported in (2019) 103 taxmann.com53 (SC), wherein, the issues raised therein, had been held infavour of the Revenue, the order passed by the learned SingleJudge, dated 02.08.2017, challenged in this Writ Appeal,warrants interference and prayed for allowing the appeal. 12. The learned counsel for the assessee/respondents 1 to 5would submit that the Constitution Bench of Honourable SupremeCourt reported in Brij Lal & Others Vs. Commissioner of IncomeTax, Jalandhar , for the referred questionsviz., (i) Whether Sections 234A, 234B and 234C of the Income TaxAct, 1961 are all applicable to proceedings of the SettlementCommissioner under Chapter XIX-A of the Act, (ii) Whether inthe absence of period of limitation prescribed for making theorder of the Settlement, the relevant date for determining thequantum of interest could be the date of the said order? and(iii) Whether in the absence of period of limitation prescribedfor making the order of the Settlement, the relevant date fordetermining the quantum of interest could be the date of the said order?, has held as follows:-“ 16. (1) Sections 234A, 234B and 234C areapplicable to the proceedings of the SettlementCommission under Chapter XIX-A of the Act to theextent indicated hereinabove.(2) Consequent upon conclusion (1), the terminalpoint for the levy of interest under section 234Bwould be up to the date of the order under section245D(1) and not up to the date of the Order ofSettlement under section 245D(4). said order?, has held as follows:-“ 16. (1) Sections 234A, 234B and 234C areapplicable to the proceedings of the SettlementCommission under Chapter XIX-A of the Act to theextent indicated hereinabove.(2) Consequent upon conclusion (1), the terminalpoint for the levy of interest under section 234Bwould be up to the date of the order under section245D(1) and not up to the date of the Order ofSettlement under section 245D(4). (3) The Settlement Commission cannot re-open itsconcluded proceedings by invoking section 154 of theAct so as to levy interest under section 234B,particularly, in view of section 245I.”The learned Single Judge, while considering the challenge to theorder of the Settlement Commissioner dated 19.02.2004, referredto similar order passed by this Court in the case ofR.Vijayalakshmi Vs. Income Tax Settlement Commissioner, inW.P.Nos.5553 to 5558 of 2008, dated 26.07.2016 holding that, inthe instant case, the Revenue while rectification/recalling ofthe order passed by the Commission, referred to a decision ofthe Hon'ble Supreme Court in the case of Hindustan Bul Carriersand Damani Bros, with respect to the terminal date for chargingof interest under Section 234B. Thus, in the decision referredto by the learned Single Judge viz., in the case ofR.Vijayalakshmi Vs. ITSC, applying the decisions of theHonourable Supreme Court in the case of Brij Lal & Others Vs.Commissioner of Income Tax, Jalandhar [2010] 328 ITR 477/198Taxman 566 and also the decision of the Division Bench of theAndhra Pradesh High Court in the case of U.Narayanamma Vs.Government of India [2013] 352 ITR 598/216 Taxman 201, rightlyset aside the order of the Settlement Commission, holding thatsubsequent development of law cannot be a ground to exercisereview jurisdiction and that cannot be taken into considerationas an error apparent on the face of the record. It is furtherheld that the Settlement Commission/6[th] respondent cannot re-openthe earlier order passed by the Settlement Commissioner(IT) andquashed the computation of terminal date for charging theinterest under Section 234B. The learned counsel submits thatthe order passed by the learned Single Judge is well founded andfollowed the sound proposition of law and the same does notwarrant interference. 13. Heard the learned counsel on either side and perusedthe entire materials. 14. It is not in dispute that the respondents 1 to 5herein/assessee filed settlement applications under Section245E of the I.T.Act, 1961 on 25.06.1997 for settlement of itscases relating to the assessment years 1988-1989 to 1992-93 and https://hcservices.ecourts.gov.in/hcservices/ 1995-96 and allowed to proceed by the Settlement Commissioner.The Settlement Commissioner passed the Combined final orderdated 07.01.2000, directing the Assessing Officer to compute thetax and interest payable on the basis of the total income asworked out in the Annexure to the order for the assessment yearsunder consideration. It is given that the total additionalincome of all the applicants would work out to Rs.39,45,943/-and Rs.9,30,000/- additional income offered in the case ofM/s.M.A.Jacob's Carpet & Furnishing Co., is accepted andtherefore, the same is not added. The order reads that in thecase of all the old firms, interest u/s.139(8) is waived for theassessment year 1988-89 since the assessment was reopenedu/s.245E; in the case of all the old firms, the interest iswaived since the assessments were reopened u/s.245E, and forthat reason, interest u/s.234B in the case of M.A.Jacob & Co.,is waived. The Settlement Commission further stated that in thecase of M.A.Jacob Furnishing Co. the only assessment yearinvolved is 1995-96 and the return has been filed within the duedate. 15. In this case, it is not as if, the respondents 1 to5/assessee have filed the returns showing their incomevoluntarily in the first instance itself. There was a searchunder Section 132 of the IT Act on 18.03.1993 on the businesspremises of the firms and at the instance of the partners,Shri.M.A.Jacob made a declaration u/s.132(4) offering additionalincome of Rs.75,00,000/- including the investment ofRs.45,00,000/- in the construction of M.A.Jacob Minar and JacobMansion at No.12, Damodaran Street, Off Cathedral Road, Chennai.Earlier, the respondents 1 to 5 also filed settlementapplication on 04.07.1994 for the assessment year 1993-94 whichcovers the previous year relevant to the date of search. Thesettlement commission has disposed of the applications by aconsolidated order in S.A.NOs.21/II/33/94-IT, 21/11/35-94—IT,21/IT/34/94-IT, 21/II/32/94-II and 21/II/36/94-II dated30.09.1996. The additional income offered by the applicants forthe said assessment year related to unrecorded sales,unconfirmed credit purchases etc. 16. Subsequently respondents 1 to 5/assessee filed fiveapplications dated 25.06.1997 in 21/I/14/97-IT, 21/I/10/97-IT,21/I/11/97-IT, 21/I/12/97-IT and 21/I/13/97-IT for theassessment years 1988-89 to 1992-93 and 1995-96. The SettlementCommission, after evaluating records, passed the order on07.01.2000, granting waiver of interest. It is stated thatreduction of 25% of the interest is leviable for the assessmentyear 1995-96 in the case of M.A.Jacob's Carpets and FurnishingCo; in all other cases, restricted the levy of interest to 50%for each of the assessment years. Further it is stated thatinterest u/s.234B will be charged up to the date of completion of proceedings u/s.143(1)(a) or up to the date of regularassessment u/s.143(3) or up to the date of return as the casemay be for all the assessment years under consideration. 17. Thereafter, the appellant/revenue filed twoMiscellaneous petitions dated 18.03.2002 and 24.07.2003 statingthat the Settlement Commissioner has no power to reduce or waiveinterest statutorily payable u/s.234A, 234B and 234C, but onlyto the extent of granting relief under Circulars of CBDT on thesubject issued u/s.119 of the Income Tax Act. The Departmentalso stated that adhoc waiver granted by the ITSC in its orderu/s.245D(4) dated 07.01.2000 suffers from mistake as to thewaiver, which appears to have been granted without taking intoconsideration the Circulars issued by the CBDT on the subjectand thus sought for rectification and referred to decisions ofHon'ble Supreme Court in the case of CIT Vs. Hindustan BulkCarriers (2003) 259 ITR 449 (SC) and CIT Vs. Demani Brothers(2003) 259 ITR 475 (SC). 18. Subsequent to the order passed by the SettlementCommission on 07.01.2000, considering the MiscellaneousPetitions filed by the Department, the ITSC/SettlementCommission (IT & WT) Additional Bench, reversed the order ofwaiver of interest and held that the interest u/s.234B shall becharged up to the date of order u/s.245D(4) of the Act.Further, directed the Assessing Officer to re-compute theinterest u/s.234B of the IT Act in view of the directions statedin the order and amend the order giving effect to the order ofthe Settlement Commission u/s.245D(4) of the Income Tax Act. 19. Challenging the said order of Settlement Commissiondated 19.02.2004, the assessee filed W.P.No.6566 of 2004 beforethis court. The learned Single Judge, following the decisionreported in [2016] 73 taxmann.com 367 (Madras) [R.VijayalakshmiVs. Income Tax Settlement Commission] wherein, the decision ofthe Constitution Bench of the Honourable Supreme Court reportedin CDJ 2010 SC 968 [Brij Lal & Others Vs. Commissioner of IncomeTax, Jalandhar], was followed, allowed the writ petition and setaside the impugned order dated 19.02.2004 passed by the 6[th]respondent/ITSC. 19. Challenging the said order of Settlement Commissiondated 19.02.2004, the assessee filed W.P.No.6566 of 2004 beforethis court. The learned Single Judge, following the decisionreported in [2016] 73 taxmann.com 367 (Madras) [R.VijayalakshmiVs. Income Tax Settlement Commission] wherein, the decision ofthe Constitution Bench of the Honourable Supreme Court reportedin CDJ 2010 SC 968 [Brij Lal & Others Vs. Commissioner of IncomeTax, Jalandhar], was followed, allowed the writ petition and setaside the impugned order dated 19.02.2004 passed by the 6[th]respondent/ITSC. 20. On a careful perusal of the entire records and alsoconsidering the points raised by both counsel, at the risk ofrepetition, it is to be stated that, the respondents 1 to5/assessee have not offered the income returns at the firstinstance but only after search u/s.132 of the I.T.Act, theyoffered additional income. Subsequently the assessee filedSettlement Applications on 25.06.1997. Though the 6[th] respondentherein/ITSC passed the order on the said applications grantingwaiver of interest on 07.01.2000, according to the learned counsel for the appellant/revenue, law was not settled at thatrelevant period. But subsequently, after passing the order on07.01.2000, the issue has been decided by the Honourable SupremeCourt and this Court and those decisions are stated as infra:-(1) CIT Vs. Vijaya Productions (P) Ltd., (2000) 245 ITR 236 (Mad) (2) Wilson Industries V. CIT (2003) 259 ITR 318 (Mad). Therefore, in view of the subsequent decisions, the Departmentfiled the Miscellaneous Petitions before the 6[th] respondent/ITSCto consider the decisions held by the Honourable Supreme Courtand subsequent development of law and sought to reconsider theirdecision already taken in the order passed on 07.01.2000 on theapplication filed by the respondents 1 to 5/assessee dated25.06.1997. The 6[th]respondent/ITSC also considered thedecisions cited by the Department, which were decided subsequentto the order passed on 07.01.2000 and rectified the orderrejecting the waiver of interest and the interest u/s.234B shallbe charged up to the date of order u/s.245D(4) of the Act. 21. According to the learned counsel for theappellant/revenue, by its earlier order dated 07.01.2000, the 6[th]respondent/ITSC disposed of all the settlement applications madeby the respondents 1 to 5/assessee. But the law on the issue wasnot settled at that point of time and the issues were takenbefore the Honourable Supreme Court. Therefore, the 6[th]respondent/ITSC could not pass the subsequent order on the sameissue, as the issue in that regard was pending before theSupreme Court. After the order dated 07.01.2000, the issue hasbeen decided in some cases. Therefore, the appellant hereinpointed out that based on those decisions, the Department filedMiscellaneous Applications praying rectification. She furtherstated that the 6[th] respondent's order passed on 07.01.2000, wasbased on the unsettled legal position. Since subsequently, legalproposition on the issue has been settled in the above saiddecisions, they filed the Miscellaneous Petitions before the 6[th]respondent, who after considering all the relevant factualmatrix of the case and the legal proposition, rectified theorder passed on 07.01.2000, by its subsequent order dated19.02.2004. 22. It has to be noted that the learned Single Judge hasfollowed the decisions of the Honourable Supreme Court reportedin CDJ 2010 SC 968 [Brij Lal & others Vs. CIT, Jalandhar] andalso earlier decisions of this court viz., [2016] 73 taxmann.com367 (Madras) [R.Vijayalakshmi Vs. Income Tax SettlementCommission], and set aside the order passed by the 6[th]respondent/ITSC by his order dated 02.08.2017. But Subsequently,the First Division Bench of this Court had an occasion to dealwith the same issue in question in the case of Union of 22. It has to be noted that the learned Single Judge hasfollowed the decisions of the Honourable Supreme Court reportedin CDJ 2010 SC 968 [Brij Lal & others Vs. CIT, Jalandhar] andalso earlier decisions of this court viz., [2016] 73 taxmann.com367 (Madras) [R.Vijayalakshmi Vs. Income Tax SettlementCommission], and set aside the order passed by the 6[th]respondent/ITSC by his order dated 02.08.2017. But Subsequently,the First Division Bench of this Court had an occasion to dealwith the same issue in question in the case of Union of India and others Vs. Dr.L.Subramanian [W.A.No.496 of 2018] dated06.08.2018, and held at paragraph 19 as under:- “19. Interest under Section 234B of the 1961 Act is tobe charged up to the date of order under Section 245D(4) ofthe 1961 Act. The order of the Settlement Commission thatthe respondent assessee would be entitled to waiver ofinterest leviable under Section 234A of the 1961 Act; thatthere is no case for waiver of interest leviable underSection 234B of the 1961 Act; and that interest underSection 234B shall be charged up to the date of the orderunder Section 245D(4) of the 1961 Act, does not warrantinterference, more so, in view of the remand by the SupremeCourt in Civil Appeal Nos.8705-8706 of 1996. “ 23. That being the position, relating to the issue inquestion, the Honourable Supreme Court, by decision dated March5, 2019 reported in [2019] 103 taxmann.com 53(SC) in the case ofKakadia Builders (P) Ltd., Vs. Income Tax Officer Ward 1(3),while appreciating the facts of the case laid before it,examined the questions rendered in the subject in Brij lal(supra) and has clearly observed that the issue with regard tothe powers of the Settlement Commission was not settled by anydecision of this Court and the decisions in CIT Vs. AnjumM.H.Ghaswala [(2001)119 Taxman 352/252 ITR 1 and Brij Lal Vs.CIT [2010] Taxman 566/328 ITR 477 (SC) were rendered after theSettlement Commission passed the order in the said case andtherefore, the Settlement Commission had no occasion to examinethe issue in question in the context of decision rendered bythis Court in the above two decisions. The conclusion of theSupreme Court, in the said decision, in paragraph 26, is asunder:- “ 26. In the light of what we have held above, weconsider it apposite to set aside the impugned orderand the order dated 11.08.2000 passed by SettlementCommission to the extent it decided the issue inrelation to waiver of interest and remand the case tothe Settlement Commission to decide the issue relatingto waiver of interest payable by the assessee(appellants herein) afresh keeping in view the law laiddown by this Court in Ghaswala (supra) and Brij lal(supra) after affording an opportunity to the partiesconcerned.” 24. In our considered view, in the case on hand, the 6[th]respondent /Settlement Commission passed the order on 07.01.2000on the settlement applications filed by respondents 1 to5/assessee, at which point of time, law was not settled on theissue in question. Therefore, the situation in the case on handis similar to that of the decision reported in [2019] 103taxmann.com 53(SC) [(Kakadia Builders (P.) Ltd., Vs Income Tax https://hcservices.ecourts.gov.in/hcservices/ Officer Ward 1(3)]. Since on the date of the order passed by theSettlement Commission i.e., on 07.01.2000, law was not settledregarding the power of the Settlement Commission in relation towaiver of interest and the interest up to what date, andtherefore, it cannot be said that there are divergent views ofthe courts on the issue. We consider that the decision reportedin [2019] 102 taxmann.com 53 (SC) is squarely applicable to thefacts of this case. https://hcservices.ecourts.gov.in/hcservices/ Officer Ward 1(3)]. Since on the date of the order passed by theSettlement Commission i.e., on 07.01.2000, law was not settledregarding the power of the Settlement Commission in relation towaiver of interest and the interest up to what date, andtherefore, it cannot be said that there are divergent views ofthe courts on the issue. We consider that the decision reportedin [2019] 102 taxmann.com 53 (SC) is squarely applicable to thefacts of this case. 25. The order passed on the Settlement Applications filedby the assessee is dated 07.01.2000. The second order of ITSCwas passed on 19.02.2004. After those orders passed by ITSC onthe issue in question, concerning the assessee, in the year2010, the Honourable Supreme Court had an occasion to deal withthe said issue in the case of Brij Lal & Others Vs. CIT,Jalandhar . Another Constitution Bench alsodealt with the issue and rendered its decision on 18.10.2011 inthe case of CIT Vs. Anjum M.H.Ghaswala [2001] 119 Taxmann352/252 ITR 1 . In the said decisions, the Honourable SupremeCourt held that the Settlement Commission cannot re-open itsconcluded proceedings by invoking Section 154 of the Act so asto levy interest under Section 234B in view of Section 245I. Theterminal point for the levy of interest under Section 234B wouldbe up to the date of the order under section 245 D (1) and notup to the date of the Order of Settlement under Section 245D(4).Sections 234A, 234B and 234C are applicable to the proceedingsof the Settlement Commission under Chapter XIX-A of the Act to acertain extent. 26. Therefore, even after the above said decision of theConstitution Bench of the Honourable Supreme Court in the caseof Brij Lal & Other VS CIT, Jalandhar, the Supreme Court, in thecase of Kakadia Builders (P.) Ltd., Vs Income Tax Officer Ward 1(3) ([2019] 102 taxmann.com 53 (SC)), by decision dated March 5,2019, had an occasion to deal with the issue which is similar tothe case on hand, wherein, the Supreme Court held that theSettlement Commission's order was already held bad in law on theground that it was passed under Section 154 of the Act, the samewas neither in existence for any purpose nor it could be reliedupon by the High Court much less for making it a part of theirorder for issuing a writ. In such circumstances, following thesaid decision, the subsequent order passed by the SettlementCommissioner rectifying its order insofar as it pertained towaiver of interest, based on the subsequent legal position onthe issue, was remanded back to the Settlement Commission. 27. Therefore, following the decision rendered by theHonourable Supreme Court in Kakadia Builders (P.) Ltd., Vs.Income Tax Officer Ward 1(3) [[2019] 103 taxmann.com 53 (SC)],the Writ Appeal is liable to be allowed. The Writ Appeal is accordingly allowed. The order of learned Single Judge dated02.08.2017 passed in W.P.No.6566 of 2004 is set aside. Thematter is remitted back to the 6[th] respondent/ITSC, to decide theissue relating to waiver of interest payable by the assessee,afresh keeping in view the law laid down by the HonourableSupreme Court in CIT Vs. Anjum M.H.Ghaswala (supra) and Brij LalVs. CIT (supra) after affording an opportunity to the partiesconcerned. No costs. //True Copy// Sd/- Assistant Registrar Sub Assistant Registrar To 1. The Commissioner of Income Tax-IV Chennai-600 034. 2. The Income Tax Settlement Commission 640, Anna Salai, Nandanam Chenna-600 035. +1cc to Hema Muralikrishnan, Advocate, Sr.No.30213 W.A.No.456 of 2018 mg (co)rr ii (01/10/2020)