TMI Blog2023 (4) TMI 537X X X X Extracts X X X X X X X X Extracts X X X X ..... well as under the Rules. Principles of natural justice were duly complied with. There is no allegation of any fraud or misrepresentation. In the absence thereof, we are afraid we cannot reopen a concluded settlement in a proceeding under Article 226 of the Constitution of India like an appellate authority. No merit in the writ petition. - THE HON BLE THE CHIEF JUSTICE UJJAL BHUYAN AND THE HON BLE SRI JUSTICE N. TUKARAMJI For the Petitioner : Mr. J.V.Prasad, learned Standing Counsel, Income Tax Department For the Respondents No.2: Mr. M.Naga Deepak ORDER ( Per the Hon ble the Chief Justice Ujjal Bhuyan ) Heard Mr. J.V.Prasad, learned Standing Counsel, Income Tax Department appearing for the petitioner and Mr. M.Naga Deepak, learned counsel for respondent No.2 assessee. 2. This writ petition has been filed by the Commissioner of Income Tax (Central), Basheerbagh, Hyderabad, assailing the legality and validity of the order dated 18.03.2008 passed by the Income Tax Settlement Commission, Additional Bench, Chennai (briefly, the Settlement Commission hereafter), in Settlement Application No.AP/HD51/06-07/18/IT. 3. Respondent No.2 is an assessee un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o.2 for settlement was not maintainable and should be rejected. However, Settlement Commission admitted the application of respondent No.2, whereafter petitioner had to submit a report under Rule 9 of the Rules disclosing therein as to how concealment of taxable income was detected by the revenue. It was mentioned therein that no new facts were disclosed by respondent No.2 in the application. In all, contention of the petitioner was that conditions for settlement in terms of Section 245C of the Act were absent and therefore, the application of respondent No.2 should be rejected. However, by the impugned order dated 18.03.2008, respondent No.1 i.e., Settlement Commission accepted the additional income offered by respondent No.2 at Rs.44,96,300.00. Consequently, petitioner was directed to issue demand notice to respondent No.2 to pay the income tax as per the order dated 18.03.2008 passed under Section 245D(4) of the Act. As a consequence of the settlement, Settlement Commission granted immunity to respondent No.2 from prosecution as well as from imposition of penalty under the Act. 7. Assailing the aforesaid order dated 18.03.2008, the present writ petition has been filed. By ord ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction 245B of the Act, the Central Government shall constitute a Commission to be called the Income Tax Settlement Commission for settlement of cases under Chapter XIX-A. We may mention that as per the proviso, Income Tax Settlement Commission so constituted had ceased to operate with effect from 01.02.2021. However, we have been informed at the Bar that an Interim Settlement Board is now in operation to ensure that there is no vacuum in the interregnum. Composition of the Settlement Commission is dealt with in sub-sections (2) and (3) of Section 245B of the Act. 12.3. Jurisdictional powers of Settlement Commission are delineated in Section 245BA of the Act. 12.4. Section 245C of the Act provides for filing of application for settlement of cases. As per sub-section (1), an assessee may, at any stage of a case relating to him, make an application in such form and in such manner as may be prescribed and containing a full and true disclosure of his income which has not been disclosed before the assessing officer, the manner in which such income has been derived, the additional amount of income tax payable on such income and such other particulars as may be prescribed, to the Set ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... says that every order passed under sub-section (4) shall provide for the terms of settlement including any demand by way of tax, penalty or interest, the manner in which any sum due under the settlement shall be paid and all other matters to make the settlement effective. It clarifies that if it is subsequently found by the Settlement Commission that the settlement was obtained by fraud or misrepresentation of facts, the settlement would be deemed to be void. Power of rectification of any mistake apparent from the record is available to the Settlement Commission in terms of subsection (6B). That apart, Settlement Commission has the power to reopen concluded proceedings. 12.7. Finally, as per Section 245H of the Act, Settlement Commission has the power to grant immunity from prosecution and penalty in the event of allowing an application for settlement filed under Section 245C of the Act. 12.8. Section 245-I of the Act says that every order of settlement passed under sub-section (4) of Section 245D of the Act shall be conclusive as to the matters stated therein and no matter covered by such order shall save as otherwise provided in Chapter XIX-A be reopened in any proceeding u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r Sub-section (4) of Section 245(D) shall be conclusive as to the matters stated therein and no matter covered by such order shall, save as otherwise provided in Chapter XIX-A, be re-opened in any proceeding under the Act or under any other law for the time being in force. Section 245-L declares that any proceedings under chapter XIXA before the settlement commission shall be deemed to be a judicial proceeding within the meaning of Sections 193 and 228 and for the purposes of Section 196 of the Indian Penal Code. 14. Thereafter, Supreme Court held that despite the finality clause contained in Section 245-I of the Act, the same would not bar and cannot bar jurisdiction of the High Court under Article 226 of the Constitution of India or the jurisdiction of the Supreme Court under Article 32 or Article 136 of the Constitution of India. However, having regard to the nature of settlement contemplated under Chapter XIX-A, Supreme Court held that the scope of enquiry under Article 226 of the Constitution of India would be very limited confined to procedural irregularity or violation of the principles of natural justice (audi alteram partem), challenge on the ground of bias, fraud a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e provisions of the Act. In this context, it is relevant to note that the principle of natural justice (audi alterant portent) has been incorporated in Section 245-D itself. The sole overall limitation upon the Commission thus appears to be that it should act in accordance with the provisions of the Act. The scope of enquiry, whether by High Court under Article 226 or by this Court under Article 136 is also the same - whether the order of the Commission is contrary to any of the provisions of the Act and if so, has it prejudiced the petitioner/appellant apart from ground of bias, fraud malice which, of course, constitute a separate and independent category. Reference in this behalf may be had to the decision of this Court in Sri Rant Durga Prasad v. Settlement Commission (MANU/SC/0429/1989 : [1989]176ITR169(SC)), which too was an appeal against the orders of the Settlement Commission. Sabyasachi Mukharji, J., speaking for the Bench comprising himself and S.R. Pandian, J. observed that in such a case this Court is concerned with the legality of procedure followed and not with the validity of the order. The learned Judge added judicial review is concerned not with the decision b ..... X X X X Extracts X X X X X X X X Extracts X X X X
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