- (1.) SEARCH & seizure operations under Section 132 of the Income Tax Act, 1961 (hereinafter referred to as the Act) was carried out on 04.04.1995 by the income tax authorities. During the course of search & seizure operations Fixed Deposit Receipts worth about Rs. 14.00 lakhs, cash amounting to to Rs. 11.00 lakhs and stocks of sugar were seized apart from incriminating documents. Notice under Section 148 of the Act was issued to the petitioners for the assessment years 1991 -92, 1992 -93, 1993 -94 and 1994 -95 and, during its pendency, the petitioners approached the Settlement Commission by filing a settlement application under Section 245C (1) of the Act on 23.03.1998.
(2.) IT transpires that the Settlement Commission passed an order under Section 245D (1) of the Act on 24.03.1999. Since this order contained certain errors, the same was recalled which led to various litigations. Through various orders passed by the writ Court, the proceedings before the Settlement Commission was stayed and eventually, the Settlement Commission passed a fresh order under Section 245D (4) of the Act on 27.03.2012. Based on the said order, a demand notice under Section 156 of the Act dated 23.11.2012 was issued. The petitioner, being aggrieved by the issuance of the demand notice, has filed the present writ petition.
(3.) WE have heard Sri Kaushalendra Nath Singh and Sri Kartikeya Saran, the learned counsels for the petitioners and Sri R.K.Upadhyaya, the learned counsel for the Income Tax Department. The learned counsel for the petitioners contended that the Settlement Commission committed an error in not considering the circular issued by the Central Board of Direct Taxes (CBDT) with regard to waiving of the interest and, consequently, a writ of mandamus should be issued directing the respondents to reassess the interest chargeable after considering the circulars issued by the department. The learned counsel further contended that no detail of the rate of interest charged nor the period was specified in the notice of demand and consequently the notice of demand should be quashed. The learned counsel further submitted that since the notice for demand contained apparent errors, a rectification application was filed under Section 154 of the Act, which was pending. The learned counsel contended that insistence by the respondents to pay the amount pursuant to the demand notice pending disposal of the rectification application was wholly arbitrary.;