The Settlement Commission cannot waive or reduce mandatory interest obligations under the Income Tax Act, with interest on undisclosed income calculated from the due tax payment date until the Commission's order date.

1A question of seminal importance relating to the period for which interest in terms of S.234B of the Income Tax, Act, 1961 (in short 'the Act') can be levied when the Settlement Commission (in short 'the Commission') passes an order under S.245D of the Act, is the subject matter of adjudication in these appeals. These appeals are directed against the common judgment of the Special Bench of the Commission (in Gulraj Engineering Construction Co. In Re and Others (1995 (215) ITR ATS1) which dealt with five situations where such questions may arise. The situations according to the Special Bench are as follows:
"(i) The income is determined under S.143(1) but no regular assessment under S.143(3) or 144 is made with or without there being a notice under S.143(2) and / or S.142(1).
(ii) A regular assessment is made under S.143(3) or S.144 in addition to the determination of the income under S.143(1) and an appeal is pending before the first appellate authority.
(iii) Only a return of income is furnished without or in pursuance of a notice under S.142(1) or S.148 and the income is neither determined under S.143(1) nor under S.143(3) or S.144.
(iv) The assessment made under S.143(3) or S.144 is reopened under S.147 and neither any return of income is furnished in response to the notice under S.148 nor is the order of re - assessment made by the Assessing Officer.
(v) A reassessment is made under S.147 read with S.143(3) or S.144 and appeal is pending before the first appellate authority".
Per majority the Special Bench decided as follows:
"Interest under S.234B will be chargeable:
In cases I and III up to the date of the order passed by the Settlement Commission under S.245D(4).
In case II up to the date of regular assessment made under S.143(3) or S.144 of the Act by the Assessing Officer.
In case IV from the date of regular assessment made by the Assessing Officer under S.143(3) or S.144, to the date of the order made by the Settlement Commission under S.245D(4).
In case V to the date of the re - assessment made by the Assessing Officer from the date of regular assessment under S.143(3) / 144".

2 In support of the appeals, learned counsel for the revenue submitted that the view expressed by the Special Bench is clearly unsustainable. Chapter XIX - A which was introduced in the Act makes a distinction between income disclosed by the assessee before the Assessing Officer and undisclosed income disclosed in an application filed before the Commission. In the latter situation, the Commission gets jurisdiction if prescribed conditions are fulfilled. When an assessee files a petition under S.245C, there is a liability to pay the additional tax in respect of the undisclosed income. An exclusive jurisdiction is conferred on the Commission and its order is conclusive. The expressions 'regular assessment' or 're - assessment' as appearing in S.234A, 234B and 234C relate to income which was earlier disclosed before the income tax authorities. For all practical purposes, the Commission exercises original jurisdiction and the orders passed under S.245D(4) and consequentially under sub-section (6) are in the nature of original orders determining liability of tax, penalty and interest and quantification thereof. It has to be borne in mind that provisions relating to settlement as appearing in Chapter XIX - A constitute a complete code. Therefore, the view of the Special Bench with reference to regular assessment as defined under S.2(40), or re - assessment under S.147 has no relevance. The liability to pay interest under S.234A, 234B and 234C, as the case may be, is of mandatory nature as was observed by a Constitution Bench of this Court in Commissioner of Income Tax v. Anjum M.H. Ghaswala and Others ( 2001 (252) ITR 1 ). The starting point of the terminus for payment of interest is not in dispute. It is only the end point. The same has to be the date on which the order is passed by the Commission under S.245D and not an earlier point of time.

3 Per contra,