Back
SUPREME COURT OF INDIA
ABHAY MANOHAR SAPRE, DINESH MAHESHWARI, JJ.
Kakadia Builders Pvt. Ltd. & Anr. – Appellant(s)
VERSUS
Income Tax Officer Ward 1(3) & Anr. – Respondent(s)
CIVIL APPEAL Nos.2491-2492 OF 2019 (Arising out of S.L.P.(C) Nos.21139-21140 of 2017)
Decided On : 05-03-2019
(2002) 1 SCC 633; (2011) 1 SCC 1 – Relied upon
(b) Administration of justice – Judicial propriety – High Court setting aside order of Settlement Commission in first round of litigation – In subsequent round adopting the same order of Settlement Commission and making it a part of its judgment – Held, without jurisdiction. (Para 23)
(c) Income Tax Act, 1961 – Sections 234-A, 234-B and 234-C r/w Section 154 – Statutory interest chargeable u/s 234-A, 234-B and 234-C – Settlement Commission cannot waive it u/s 154. (Para 24)
Facts of the case:
On 19.01.1994, a search and seizure operation was carried out in the premises of the appellants (assessee) and assessment proceedings were initiated. During the pendency of the proceedings the appellants filed the settlement applications before the Settlement Commission and offered to settle their tax matter.
The Settlement Commission made certain additions and waived interest chargeable.
The High Court allowed the petitions (SCAs) filed by appellants and set aside the order passed by the Settlement Commission and granted liberty to the Revenue to follow the remedies as may be available to them against the order passed by the Settlement Commission.
The High Court though observed that the petitions are disposed of yet in substance allowed the petitions (SCAs) and modified the order of the Settlement Commission as regards waiver of interest.
Finding of the Court:
Impugned judgment is without jurisdiction.
Result: Appeals allowed.
JUDGMENT
Abhay Manohar Sapre, J.
1. Leave granted.
2. These appeals are directed against the final judgment and order dated 28.07.2016 passed by the High Court of Gujarat at Ahmedabad in SCA Nos.7814 & 7820 of 2014 whereby the High Court disposed of the petitions(SCAs) filed by the respondents.
3. In order to appreciate the issue involved in these appeals, it is necessary to set out a few relevant facts infra.
4. The appellants herein are the respondents (assessee) and the respondents (Revenue) herein are the petitioners in the petitions(SCAs) before the High Court out of which these appeals arise.
5. The appellant in S.L.P. No.21139/2017 is a Private Limited Company and the appellant in SLP No.21140/2017 is the promoter Director of the said Company. On 19.01.1994, a search and seizure operation was carried out in the premises of the appellants (assessee) under the Income Tax Act, 1961 (hereinafter referred to as “the Act” ).
6. During pendency of the assessment proceedings, which were initiated for determination of the tax liability as a result of search and seizure operation, the appellants on 12.03.1996 and 03.09.1996 filed the settlement applications before the Settlement Commission and offered to settle their tax matter in accordance with the procedure provided under Chapter XIXA of the Act.
7. On 11.08.2000, the Settlement Commission passed an order under Section 245D(4) of the Act. By the said order, the Settlement Commission made certain additions and waived interest chargeable under Sections 234A, 234 B and 234C of the Act.
8. The appellants (assessee) felt aggrieved and filed rectification applications before the Settlement Commission on 29.12.2000 for amending its order dated 11.08.2000. The Revenue (Commissioner of Income Tax) also felt aggrieved by the order dated 11.08.2000 and filed a rectification application under Section 154 of the Act before the Settlement Commission on 26.07.2002.
9. By order dated 11.10.2002, the Settlement Commission dismissed the applications filed by the appellants(assessee) and partly allowed the application filed by the respondents(Revenue) rectifying its order dated 11.08.2000 insofar as it pertained to waiver of interest, which was granted to the appellants (assessee). The appellants(assessee) felt aggrieved by the order dated 11.10.2002 passed by the Settlement Commission and filed two separate petitions (SCA Nos.15097 and 15101 of 2004) in the High Court of Gujarat.
10. The High Court, by order dated 03.03.2014 allowed the petitions(SCAs) and set aside the order dated 11.10.2002 passed by the Settlement Commission and granted liberty to the Revenue to follow the remedies as may be available to them against the order passed by the Settlement Commission dated 11.08.2000.
11. The Revenue, therefore, felt aggrieved and filed two petitions (SCA Nos.7814 of 2014 and 7820 of 2014) against the order dated 11.08.2000 questioning its legality. The High Court though in concluding paragraph observed that the petitions are disposed of yet in substance allowed the petitions(SCAs) and modified the order dated 11.08.2000 of the Settlement Commission by passing the following directions in paragraph 13 which reads as under:
“Under the circumstances, we direct modification of the order of Settlement Commission dated 11.08.2000 by reversing the waiver of interest in terms of Settlement Commission’s directions contained in its order dated 11.10.2002. In other words, we adopt the same directions for modification of the Settlement Commissioner’s original order dated 11.08.2000.”
12. It is against this order, the appellants(assessee) felt aggrieved and have filed the present appeals by way of special leave in this Court.
13. So, the short question which arises for consideration in these appeals, is whether the High Court was justified in allowing the petitions (SCAs) and thereby was justified in modifying the order dated 11.08.2000 passed by the Settlement Commission.
14. Heard Mr. R.P. Bhatt, learned seni
An indispensable Tool for Legal Professionals, Endorsed by Various High Court and Judicial Officers
Please visit our Training & Support
Center or Contact Us for assistance
Scan Me!
India’s Legal research and Law Firm App, Download now!
For Daily Legal Updates, Join us on :
Back to top
