Law:

Section:

Section 245D of the Income-tax Act, 1961 - Settlement Commission - Procedure on application under section 245C - Assessment years 1991-92 to 1994-95 - On search and seizure operation at premises of assessee, department found undisclosed income - Assessee filed an application for settlement before Settlement Commission - Settlement Commission ordered for payment of tax and interest, but left actual calculation to be done by Assessing Officer - That order was served upon assessee on 23-3-1999 - Demand notices were issued on 10-11-1999 in terms of order of Settlement Commission - Whether on facts assessee was liable to pay interest under section 245D(6A) for period May 1999 to October 1999 - Held, no - Whether period of thirty five days had to be counted from date of actual calculation and service of demand notices on assessee and not from date of order of Settlement Commission - Held, yes FACTS The department conducted a search and seizure operation on the premises of the petitioner-assessee and found undisclosed income. The assessee filed an application on 2-2-1995 for settlement of cases before the Settlement Commission for the assessment years 1991-92 to 1994-95. The Settlement Commission by order dated 29-1-1999, disposed of matter and ordered for payment of tax and interest thereon, with a further direction to the Assessing Officer to calculate tax on the total income as detailed in the order and charge interest as per direction contained in the order. The said order was served upon the assessee on 23-3-1999. Then the assessee filed a petition requesting the Assessing Officer to give effect to the order of the Settlement Commission. The demand notices in terms of the order of the Settlement Commission were issued on 10-11-1999 and the assessee paid the entire tax on 10-3-2000. The department issued a demand notice to pay tax and charged interest under section 245D(6A) for the period May 1999 to October 1999. On writ : HELD Section 245D contains a provision with regard to the disposal of the application filed for settlement of cases before the Settlement Commission under section 245C. Final order by the Settlement Commission is passed under sub-section (4) of…

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