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Section 158BFA of the Income-tax Act, 1961 - Block assessment in search cases - Levy of interest and penalty in certain cases [Block period 1988-89 to 1998-99] Dinesh Sharma v. Chief CIT [2010] 228 CTR 387 (Punj. & Har.) Where Settlement Commission had held that assessee would be liable to pay interest under section 158BF(1)(a), no other IT authority could waive same even by relying upon circular issued by CBDT, dated 6-1-2003. Ms. Radhika Suri for the Petitioner. ORDER This petition seeks quashing of order dt. 18th Dec, 2009, Annex. P1, passed by the Chief CIT, rejecting application for waiver of interest under s. 158BFAl(a) of the IT Act, 1961 (for short, "the Act") for the assessment years covering assessing years 1988-99. 2. After a search was carried out at the premises of the assessee on 20th Nov., 1997, notice under s. 158BC of the Act was issued, requiring the assessee to file return. Accordingly, return dt. 27th Aug., 1999 was filed after expiry of the statutory period. Block assessment was completed and undisclosed income was assessed. The assessee approached the Settlement Commission. The Commission disposed of the matter under s. 245D(4) of the Act on 12th Dec, 2003. As regards interest, it was held that the assessee will be liable to pay interest under s. 158BFA(1)(a) of the Act. The assessee filed an application for waiver of interest before the Chief CIT relying upon circular issued by the CBDT dt. 6th Jan., 2003. The Chief CIT dismissed the application by holding that in view of provisions of s. 245-I, the order of the Commission could not be amended and the Chief CIT could not waive interest contrary to the decision of the Commission that the assessee was liable to pay interest. 3. We have heard learned counsel for the petitioner. 4. Main contention put forward by learned counsel is that waiver of interest does not amount to modification of the decision of the Commission. Power of waiver is available only with the Chief CIT and is exercised after liability to pay interest has been crystallised. Reliance has been placed on of Gujarat High Court inSmt Kherunissa Allibhai v. CIT [1978] 113 ITR 443 (Guj) wherein dealing with provisions of s.…

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