- (1.)THIS petition has been preferred by as many as 11 petitioners challenging orders dated 28. 03. 1995 and 11. 09. 1995 made by the Settlement Commission (hereinafter referred to as 'the Commission' ). The following reliefs have been prayed for:
"22. The petitioners therefore, pray :-that this Hon'ble Court be pleased to issue an appropriate writ, direction or order under Article 226 and 227 of the Constitution of India quashing and setting aside the order of the Special Bench of the Settlement Commission dated 20-3-1995 to the extent it holds that the petitioners are liable for interest u/s. 234b (1) read with sub-section (4) of the Income-tax Act for asst. years 1989-90 and 1990-91 in cases where no interest was as such leviable u/s. 234b (1) and quashing the consequential directions for levy of such interest given by Additional Bench Bombay of the Settlement Commission by its order dated 11-9-1995. that this Hon'ble Court be pleased to issue an appropriate writ, direction or order under Article 226 and 227 of the Constitution of India quashing the order of the Additional Bench Bombay of the Settlement Commission to the extent it holds that the 2nd and 3rd respondents are not bound to adjust Rs. 11 lakhs being the seized amount in March, 1990 against the advance-tax dues of petitioners Nos. 1, 2, 6 and 9 for asst. year 1990-91 and that they were entitled to levy interest against the said petitioners for the said assessment year u/s. 234a and 234b of the Income-tax Act. that this Hon'ble Court be pleased to issue an appropriate writ, direction or order under Article 226 and 227 of the Constitution of India quashing the order of the Additional Bench Bombay of the Settlement Commission dated 11-9-1995 to the extent it directs the 2nd and 3rd respondents to levy interest on the petitioners in respect of reopened assessments for asst. years 1985-86 to 1988-89 u/s. 139 (8), 215 and 217 of the Income-tax Act. that this Hon'ble Court be pleased to issue an appropriate writ, direction or order under Article 226 and 227 of the Constitution of India quashing the notices of demand issued by the 2nd and 3rd respondents to the aforesaid extent and permanently restraining from issuing any such notices of demand on the petitioners as regards the levy of interest as indicated above. that pending the hearing and final disposal of this petition, this Hon'ble Court be pleased to restrain 2nd and 3rd respondents from enforcing any notices of demand against the petitioners or issuing fresh notices of demand against the petitioners and from recovering any amount from the petitioners on such terms as this Hon'ble Court thinks fit and proper. that this Hon'ble Court be pleased to grant any other relief as the nature and circumstances of the case may require. "

(2.)BROADLY the reliefs prayed for can be divided into two issues: whether the petitioners are liable to be charged interest for Assessment Years 1989-1990 and 1990-1991 under Section 234b of the Income-tax Act, 1961 (the Act) in cases where under Section 234b (1) of the Act, no interest was leviable? AND whether the petitioners, whose assessment have been re-opened in exercise of powers under Section 245e of the Act by the Commission, are liable to pay interest for Assessment Years 1985-1986 to 1988-1989 under Sections 139 (8), 215 and 217 of the Act ?
(3.)UNDISPUTED facts are that the petitioners preferred settlement applications on 01. 02. 1991 under Section 245c of the Act. On 18. 10. 1991 the Commission permitted the applications moved by the petitioners to be proceeded with in exercise of powers under Section 245d (1) of the Act. On 26. 02. 1993 the Commission passed final order under Section 245d (4) read with Section 245e of the Act. Vide orders made between 26th to 28th July, 1993, the Assessing Officer (AO) raised various demands giving effect to the consolidated order of the Commission dated 26. 02. 1993. On 14. 09. 1993 the petitioners moved the Commission seeking rectification / modification / clarification of the order dated 26. 02. 1993 in relation to the aforesaid two issues alongwith other issues.