Brij Lal & Ors Vs. CIT (Supreme Court) – A five-judge Constitution bench of the Supreme Court last week ruled that the settlement commission under the Income Tax Act cannot reopen concluded proceedings under Section 154 (‘rectification of mistakes’) so as to levy interest on default in payment of advance tax. Assessment in law is different from assessment by way of settlement. “Every order of settlement passed under Section 245D(4) shall be final as to the matters contained therein and the same shall not be re-opened except in case of fraud and misrepresentation,” the bench headed by Chief Justice S H Kapadia stated in a unanimous decision. The Constitution bench was answering three questions referred to it by other benches in a large number of cases, the leading case being Brij Lal vs Commissioner of Income Tax.
(1) Sections 234A, 234B and 234C are applicable to the proceedings of the Settlement Commission under Chapter XIX-A of the Act to the extent indicated herein above.
(2) Consequent upon conclusion (1), the terminal point for the levy of interest under section 234B would be up to the date of the order under section 245D(1) and not up to the date of the Order of Settlement under section 245D(4).
(3) The Settlement Commission cannot re-open its concluded proceedings by invoking section 154 of the Act so as to levy interest under section 234B, particularly, in view of section 245I.
Court :A five-judge Constitution bench of the Supreme Court
Citation :CIVIL APPEAL Nos. 516-527 OF 2004
Brij Lal & Ors versus Commissioner of Income Tax, Jalandhar
with Civil Appeal Nos. 280-286/2005, Civil Appeal No. 8324/2004, Civil Appeal Nos. 8325-8328/2004, Civil Appeal No. 603/2005, Civil Appeal No. 990/2005, Civil Appeal No. 925/2005,Civil Appeal No. 924/2005, Writ Petition (C) No. 556/2004, Writ Petition(C)No. 555/2004, Civil Appeal Nos. 2247-2250/2005, Civil Appeal No. 923/2005, Civil Appeal No. 995/2005, Civil Appeal No. 994/2005, Writ Petition (C) No. 63/2005, Writ Petition (C) No. 61/2005, Writ Petition (C) No. 62/2005, Writ Petition (C) No. 60/2005, Civil Appeal No. 2246/2005, Civil Appeal Nos. 3231- 3232/2005, Civil Appeal No. 3091/2004, Civil Appeal No. 3087/2004, Civil Appeal No. 3092/2004, Civil Appeal Nos.4599- 4601/2004, Civil Appeal Nos. 528-531/2004, Writ Petition (C) No. 325/2004, Writ Petition (C) No. 324/2004, Writ Petition (C) No. 326/2004, Civil Appeal No. 992/2007, Civil Appeal No.9174/2010 @ SLP (C) No. 20373/2009, Civil Appeal No. 532/2004, and Civil Appeal No. 604/2005.
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