LexCOMMISSIONER OF INCOME TAX, MUMBAI versus ANJUM M.H. GHASWALA AND ORS.
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COMMISSIONER OF INCOME TAX, MUMBAI
v.
ANJUM M.H. GHASWALA AND ORS.
OCTOBER 18, 2001
[DR. A.S. ANAND, C.J., K.T. THOMAS, R.C. LAHOTI,
N. SANTOSH HEGDE AND S.N. VARIAVA, JJ.]
lnocme Tax Act, 1961 :
Sections 245D(4) and (6)-AY 1989-90 onwards-Interest-Reduction
or waiver of-By Settlement Commission-Powers regarding-Held: The Com-
mission can only stipulate the conditions of payment like instalments, last date
for payment etc.-Hence, the Commission d_oes not have the power to reduce
or waive interest statutorily payable under Sections 234A, 234B and 234C
except to the extent of granting relief under the Circulars issued by the Board
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under s .. 119.
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Section 119-Central Board of Direct Taxes-Circulars issued b~Statu
tory force of-Held: Such Circulars have statutory force and are binding on
every income-tax authority-Clarificatory Notes or Press Release issued by the
Board do not have such statutory force.
E
Interpretation ,of Statutes :
Rule of construction-Statute-Vesting of pow{!r-ln an authority-Ex-
ercise of-Held: Has to be exercised only in the manner provided in the statute
itself.
F
Purposive Interpretation-Exercise of-By looking into object and scheme
of Act-Held: Would arise only if the language is either ambiguous or conflic:t-
ing or gives a meaning leading to absurdity.
External aids-Reliance on-Held: ls not pennissible if the language of G
a statute is clear and unambiguous . .
Practice and Procedure :
Inherent Power-Exercise of-Held: Cannot be exercised contrary to
express provisions of the Act.
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304
SUPREME COURT REPORTS
[2001) SUPP. 4 S.C.R.
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Words and Phrases :
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·D
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"Tenns" and:i'ihterest"-Meaning of-Iii the contextofS.245D(6) of the
Income Tax Act, 1961.
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"Settlement"-;Meariing of-:-:-In the context of S.245D(4J. of the Income
Tax Act, 196L1
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In this appeal the following question arose before the Court :-
Whether the Settlement Commission constituted under Section 245B •
of the Income Tax Act; 1961 has the Jurisdiction to ·reduce or ·waive the
interest chargeable urider Sections 234A, 234B and 234C of the Act, while
passing orders of settlement under Section 245D( 4) of the Act?
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Disposing of the appea:ls, the Court ,
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HELD: 1. The expression "terms" used in Section 245D(6).of the
Income Tax Act, 1961 does not refer to the power of the Settlement
Commission.to waive or reduce tax, penalty or interest because quantifi·
, cation of amount payable under each of those expressions are dealt with
· under. .separate provisions of the Act ·like the payment of the tax is
governed by various provisions of the Act as defined in Section 2(43);of.
the Act while penalty is covered by Section 245H and interest under
Sections 234A, 2340 and 234C of the Act. Therefore, all that the expres-
. sion "terms" in Section 2450(6) means. is that the Co,mmission can stipu-
late th~ conditions of payment like instalments, last date for payment etc.
Bey~nd that Section USD(6) does not authorise the waiver or reduction of
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tax, penalty or interest settled under Section 2450(4). (314-H; 315-A-B]
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CIT v. Express. Newspapers 4td., 206 (1?94) ITR 443 (SC), held inap·
pli~able.
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, (\.s!iwwii f<umar Aggarn:~l, In re 195 ITR ~61, referred, ,to.
2. Undoubtedly, the Central Board of Direc.t Taxes is an· e~ec~ti~e 'au-
thority being a part of the Ministry of Finance. Us actions are amenable to
scrutiny by the said Ministry as also by audit bodies and also the Parliament
whereas the Commission constituted under Section 2458 of the Act is a quasi-
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judicial body (Section 245L) and its orders are not amenable to either super-
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C.l.T. v. ANJUM M.H. GHASWALA
305
visory or appellate jurisdiction of the Ministry of Finance or any of the audit
bodies and for that matter even by the Parliament. Its orders under Section
245I are conclusive which cannot be reopened in any proceedings under the
Act or under any other law for the time being in force. Therefore, it cannot
be said that in the context in which the power under Section 119 could be
exercised by the Board, the Commission could either equate itself with the
Board or claim the right to exercise the power vested in the Board under
Section 119, which is an administrative power. [316-G~~]
3.1. It is no doubt true that the terminology 'settlement' has a verExcerpt shown. Read the full judgment & AI analysis in Lexace.