Income Tax Settlement Commission has No Jurisdiction to Extend the Terminal Date: Madras HC [Read Order]

Madras High Court

The High Court of Madras, in a recent decision held that the Settlement Commission has no jurisdiction to extend the terminal date. The Court, while deciding so, relied upon its own decision in R.Vijayalakshmi V. Income Tax Settlement Commission.

Coming to the facts of the case, the Settlement Commission was directed by the Supreme Court to verify whether the two circulars referred therein issued by the Central Board dated 02.05.1994 and 23.05.1996 would be applicable in the case of the petitioner. In pursuance of the above order, the Commission has considered the matter and passed the impugned orders thereby withdrawing the waiver of interest. Further, the Commission shifted the terminal date for calculation of interest under Section 234B of the Income Tax Act by relying upon the decisions in cases of Hindustan Bulk Carrier and CIT V. Damani Bros.Aggrieved with the said order the petitioner approached the High Court contending that the above action of the Commission cannot be justified since the matter was remitted by the Supreme Court to the Commission with specific direction and the Commission cannot go beyond that direction.

The Single bench of Justice T S Sivagnanam noticed that in the case of R.Vijayalakshmi V. Income Tax Settlement Commission, the Court observed that “It is settled legal position that power of review is to be specifically conferred on the authority by the statute and power of review is not inherent with the authority.” Further, the Court held that the Commission had no jurisdiction to reopen the matter for the purpose of shifting the terminal date.In the light of the above decision, the Court set aside the order of the settlement Commission extending the terminal date.

Read the full text of the order below.