Alukkas Jewellery Vs Income Tax Settlement Commission (Madras High Court)
Madras High Court held that Settlement Commission not authorized to rectify the order under section 154 of the Income Tax Act as power of rectification vested to Settlement Commission only with effect from 01.06.2011.
Facts- The impugned order has been passed in terms of Section 245F(1) read with Section 154 of the Income-tax Act, 1961 (in short, ‘Act’) on 21.03.2003. The Settlement Commission has rectified the component of interest levied under Section 245F(1) vide order dated 10.04.1998 passed under Section 245D(4) of the Act. However, as the Settlement Commission has been vested with the power of rectification only with effect from 01.06.2011 by insertion of sub-section 6B in Section 245D of the Act, the impugned rectification could not have been effected on 21.03.2003 when such a power did not enure to the Settlement Commission.
Conclusion- Hon’ble Apex Court in Brij Lal and others v. Commissioner of Income tax has held that Under section 254(2), the ITAT is given the power to rectify but no such power is given to the Settlement Commission. Thus, we hold that Settlement Commission cannot reopen its concluded proceedings by invoking section 154 of the Act. Lastly, one must keep in mind the difference between review/ recall of the order and rectification under section 154. Thus, writ petition allowed.
