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SECTION:245A-SETTLEMENT COMMISSION-CASES” WHICH CAN BE REFERRED TO SETTLEMENT COMMISSION - Income Tax - Ready Reckoner - Income TaxExtract CASES WHICH CAN BE REFERRED TO SETTLEMENT COMMISSION SECTION: 245A CASE means any proceedings for assessment or reassessment of any previous year which is pending before an Assessing Officer on the date on which an application is made to settlement Commission u/s 245C(1) In assessment proceedings under section 143(3)/144. Case becomes pending under section 143(3)/144 on the date on which notice under section 143(2)/ show cause notice under section 144 is issued. In assessment or reassessment proceedings under section 147. Case become pending under section 147 on the date on which notice under section 148 is issued. In fresh assessment proceedings where fresh assessment is made in pursuance of an order passed under section 254/263/264 cancelling the assessment and directing a fresh assessment. Such fresh assessment proceedings shall be deemed to have been commenced on the date I n assessment or reassessment proceedings under section 153A for the 6 Assessment Years immediately preceding the Assessment Year relevant to the previous year in which search is conducted. These proceedings shall be deemed to have commenced on the date on which notice under section 153A is issued. I n assessment proceedings under section 143(3)/ 144 of the Assessment Year relevant to the previous year in which search is conducted. These proceedings shall be deemed to have commenced on the first day of the Assessment Year. Any assessment year would entitle the assessee to make an application to settlement commission for other assessment year also even no notice issued under section 148 for such assessment year (clause (i) of explanation to clause (b) of section 245A has been substituted with effect from 1.6.2015). As per the existing provision of section 245A clause (i) of the explanation to clause (b) of section 245A (as mention in the income tax Act, 1961) provides that proceeding for assessment or reassessment under section 147 of the Act is deemed to commence from the date of issue of notice under section 148 of the Act. Generally, it has been observed that the issue relating to escapement of income often involved is more than one assessment year. In such type of cases, the assessee becomes eligible to apply to settlement commission only for the assessment year for which notice u/s 148 has been issued. Therefore, to take the proceeding for all other assessment years where there is a escapement. The assessee becomes eligible only after notice u/s 148 has been issued for all such assessment years. In order to obviate the need for issue of notice in all such assessment years for commencement of pendency, clause (i) of the said Explanation has been amended to provide that where a notice under section 148 is issued for any assessment year, the assessee can approach Settlement Commission for other assessment years as well even if notice under section 148 for such other assessment years has not been issued. However, a return of income for such other assessment years should have been furnished under section 139 of the Act or in response to notice under section 142 of the Act. DEEMED DATE OF COMMENCEMENT OF PROCEEDINGS AND DEEMED DATE OF CONCLUSION OF PROCEEDINGS [Section- 245A] Amendments Clause (iv) of the Explanation has been amended to provide that a proceeding for any assessment year, other than the proceedings of assessment or reassessment referred to in clause (i) or clause (iii) or clause (iiia), shall be: Deemed to have commenced from the date on which a return of income is furnished under section 139 or in response to notice under section 142 and Deemed to have concluded on the date on which the assessment is made or or on the expiry of the time specified for making assessment under sub-section (1) of section 153 [substituted by FA 2017, w.e.f. 1-4-2017] in a case where no assessment is made. KEY NOTE: Application for settlement cannot be made for an assessment year which is not pending under section 143(3)/144/147/153A. Assessee shall make an application to ITSC in prescribed form making a true and full disclosure of his income which has not been disclosed before Assessing Officer. The application to ITSC can be made if: Additional amount of income tax on the income disclosed in application exceeds ₹ 50 lakhs for 6 Previous Years preceding the Previous Year preceding the Previous Year in which search is conducted and for the Previous Year in which search is conducted. If the person on whom search is conducted is a person related to the person referred to in (i) above and person referred in (i) above has filed settlement application. Additional amount to income tax on the income disclosed in application exceeds ₹ 10 lakhs for 6 previous Years preceding the Previous Year in which search is conducted and for the Previous Year in which search is conducted. Related person means as defined in section 40A(2). A person shall be deemed to have a substantial interest in a business or profession, if- In a case where the business or profession is carried on by a company, such person is, on the date of search, the beneficial owner of shares (not being shares entitled to a fixed rate of dividend, whether with or without a right to participate in profits) carrying not less than twenty percent of the voting power; and In any other case such person is, on the date of search, beneficially entitled not less than 20% of the profits of such business or profession.
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