The assessment order  was rectified under section 154 on July 27, 1992 revising the total income after allowance of set off of unabsorbed investment allowance brought forward from the assessment years 1986-87, 1987-88 and 1988-89. The assessee made an application under section 245C before the Settlement Commission which passed an order under section 245D(4). The Assessing Officer gave effect to the order under section 245D(4) and also calculated the interest payable under section 220(2). The quantum of interest was rectified and a revised order was passed. The assessee sought rectification of the order passed by the Settlement Commission on the ground that since the order under section 245D(4) was silent on the point of charging interest under section 220(2) it should be considered to have been waived. The Settlement Commission held that it did not consider it to be a good case for waiver of interest chargeable under section 220(2). However, regarding the method of charging of interest the Settlement Commission directed the Assessing Officer to take the income as determined by him in his order dated July 27, 1992, adjust it in accordance with its order under section 245D(4) but without withdrawing the benefit of set off of brought forward investment allowance under section 32A. The Department filed  petition  contending that the Settlement Commission could not have granted the assessee the benefit of set off of brought forward investment allowance. The Settlement Commission rejected the application filed by the Department. On a writ dismissing the petition, that according to the proviso to sub-section (2) of section 220, once the amount on which interest was charged got extinguished the liability of the assessee to pay interest on such amount would also be extinguished. The order of the Commissioner (Appeals) directing the Assessing Officer to withdraw the investment allowance granted under section 32A was set aside by the Tribunal. Therefore, interference with the orders passed by the Settlement Commission reducing the liability of the assessee to pay interest under section 220(2) would result in directing the assessee to pay interest on an amount which had been extinguished and consequently would result in miscarriage of justice. (AY.1989-90)