Law:

Section:

Section 234B, read with section 245D, of the Income-tax Act, 1961 - Interest, chargeable as - Assessment year 2002-03 to 2006-07 - Whether words 'amount on which interest was payable' as occurring in section 234B(4) have been used in a descriptive sense to identify amount specified in sub-section (1), or as the case may be, in sub-section (3); these words do not impose a condition that for interest to be attracted under section 234B(4), interest should actually have been levied under original order of assessment under sub-section (1) - Held, yes - Whether, therefore, Settlement Commission, when it passes an order under section 245D, can award interest under section 234B, even though no interest was chargeable under original order of assessment - Held, yes Section 254 of the Income-tax Act, 1961 - Appellate Tribunal - Powers of - While passing original order, Settlement Commission failed to follow earlier decision of Special Bench of Settlement Commission on exactly same issue - Further, said decision of Special Bench was confirmed by High Court, also prior to impugned original order - Whether an apparent error occurred in original order and Settlement Commission was justified in allowing application for rectification - Held, yes Words and Phrases : 'Amount on which interest was payable under sub-section (1) or sub-section (3)' as occurring in section 234B(4) of the Income-tax Act, 1961 FACTS The assessee was an IATA approved travel agent and was engaged in the business of domestic and international air ticketing. For the assessment years 2002-03 to 2006-07, it filed its returns of income. In each of the years, the tax deducted at source was more than the tax payable on the income declared. The returns of income were accepted and an intimation was issued under section 143(1). A search was conducted under section 132 on 9-11-2005. Pursuant thereto, notices were issued to the assessee under section 153A, in response to which, the assessee filed its returns of income. Thereafter, notices were issued to the assessee under section 142(1). The assessee filed an application to the Settlement Commission under section 245C. The Settlement Commission passed an order under…

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