Law:

Section:

Section 234B, read with sections 245D and 245F, of the Income-tax Act, 1961 - Interest, chargeable as - Assessment years 1989-90 and 1990-91 - Whether while passing an order under section 245D(4), Settlement Commission exercises powers of an income-tax authority as provided under section 245F and it can fasten liability to pay interest for that portion of income which is forming part of total income as determined by Commission and which had not been disclosed earlier before Assessing Officer, even if no interest could have become leviable if originally disclosed income would have been considered in isolation by operation of section 234B(1) - Held, yes CASE REVIEW CIT v. Hindustan Bulk Carriers [2003] 259 ITR 449/ 126 Taxman 321 followed. [Para 8] CASES REFERRED TO CIT v. Haripada Khatua [1998] 230 ITR 560 (Cal.) [Para 5], Modi Industries Ltd. v. CIT [1995] 216 ITR 759/ 82 Taxman 377 (SC) [Para 5], CIT v. Anjum M.H. Ghaswala [2001] 252 ITR 1/ 119 Taxman 352(SC) [Para 5] and CIT v. Hindustan Bulk Carriers [2003] 259 ITR 449/ 126 Taxman 321 (SC) [Para 6]. K.H. Kaji for the Petitioner. B.B. Naik for the Respondent. JUDGMENT D.A. Mehta, J. - This petition has been preferred by as many as 11 petitioners challenging orders dated 28-3-1995 and 11-9-1995 made by the Settlement Commission (hereinafter referred to as 'the Commission'). 2. The following reliefs have been prayed for : "The petitioners therefore, pray : A. that this Hon'ble Court be pleased to issue an appropriate writ, direction or order under Articles 226 and 227 of the Constitution of India quashing and setting aside the order of the Special Bench of the Settlement Commission, dated 20-3-1995 to the extent it holds that the petitioners are liable for interest under section 234B(1) read with sub-section (4) of the Income-tax Act for assessment years 1989-90 and 1990-91 in cases where no interest was as such leviable under section 234B(1) and quashing the consequential directions for levy of such interest given by Additional Bench Bombay of the Settlement Commission by its order dated 11-9-1995. B. that this Hon'ble Court be pleased to issue an appropriate writ, direction or order under Articles 226 and 227…

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