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TMI Blog2011 (8) TMI 467X X X X Extracts X X X X X X X X Extracts X X X X ..... pect of the matter not placed before the Commission by the assessee in terms of provision contained in section 245F(4) of the Income-tax Act, 1961. The Tribunal relying upon a recent Division Bench judgment of this Court reported in Smt. Neeru Agarwal v. Union of India [2011] 330 ITR 422 (All.) held that the dispute adjudicated by the settlement commission shall be conclusive and final in terms of provision contained in section 245-I of the Act, hence Assessing Officer had committed substantial illegality by reopening the issue on the alleged ground that certain facts is not disclosed. 3. Section 245C of the Act empowers the assessee to move an application at any stage of a case relating to him that full and true disclosure of income, which has not been disclosed before the Assessing Officer subject to rider contained in section 245C of the Act. The Settlement Commission may allow or reject the application, but in any case in view of provision contained in section 245C of the Act, the application moved under sub-section (1) of the said section, cannot be allowed to be withdrawn by the applicant. 4. The application so moved under section 245C of the Act should be processed by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed that where no order has been passed within the aforesaid period by the Settlement Commission, the application shall be deemed to have been allowed to be proceeded with. (1A) Omitted by the Finance (No. 2) Act, 1991 w.e.f. 27-9-1991 (2) A copy of every order under sub-section (1) shall be sent to the applicant and to the Commissioner: (2A) Where an application was made under section 245C before the 1st day of June, 2007, but an order under the provisions of sub-section (1) of this section, as they stood immediately before their amendment by the Finance Act, 2007, has not been made before the 1st day of June, 2007, such application shall be deemed to have been allowed to be proceeded with if the additional tax on the income disclosed in such application and the interest thereon is paid on or before the 31st day of July, 2007. Explanation-In respect of the applications referred to in this sub-section, the 31st day of July, 2007 shall be deemed to be the date of the order of rejection or allowing the application to be proceeded with under sub-section 91. (2B) The Settlement Commission shall- (i) in respect of an application which is allowed to be proceeded under s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... such records, if the Settlement Commission is of the opinion that any further enquiry or investigation in the matter is necessary it may direct the Commissioner to report on the matters covered by the application and any other matter relating to the case, and the Commissioner shall furnish the report within a period of ninety days of the receipt of communication from the Settlement Commission: Provided that where the Commissioner does not furnish the report within the aforesaid period, the Settlement Commission may proceed to pass an order under sub-section (4) without such report. (4) After examination of the records and the report of the Commissioner, if any, received under- (i) sub-section (2B) or sub-section (3) or (ii) the provisions of sub-section (1) as they stood immediately before their amendment by the Finance Act, 2007, and after giving an opportunity to the applicant and to the Commissioner to be heard, either in person or through a representative duly authorised in this behalf, and after examining such further evidence as may be placed before it or obtained by it, the Settlement Commission may, in accordance with the provisions of this Ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ll not be made under this sub-section unless the Settlement Commission has given notice to the applicant and the Commissioner of its intention to do so and has allowed the applicant and the Commissioner an opportunity of being heard (7) Where a settlement becomes void as provided under sub-section (6), the proceedings with respect to the matters covered by the settlement shall be deemed to have been revived from the stage at which the application was allowed to be proceeded with by the Settlement Commission and the income-tax authority concerned, may, notwithstanding anything contained in any other provisions of this Act, completes such proceedings at any time before the expiry of two years from the end of the financial year in which the settlement became void. (8) For the removal of doubts, it is hereby declared that nothing contained in section 153 shall apply to any order passed under sub-section (4) or to any order of assessment, reassessment or recomputation required to be made by the Assessing Officer in pursuance of any directions contained in such order passed by the Settlement Commission and nothing contained in the provision to sub-section (1) of section 186 shall apply ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ared invalid, or, not allowed to be further proceeded with, as the case may be. Sub-section (4) of section 245F empowers the authorities under the Act, to discharge their statutory obligation, not contrary to finding, observation and direction of the Settlement Commissioner. However, overall reading of section 245F, read with sections 245D and 245-I makes it clear that the matter adjudicated with regard to particular financial year shall not be reopen by any other authority under the Act except by the Settlement Commissioner himself under the provision contained in Chapter XIX-A of the Act. 7. The Settlement Commission has got ample power under section 245H to grant immunity from prosecution and penalty in case the assessee cooperated with the Settlement Commission in the proceedings before it and has made a full and true disclosure of his income and the manner in which such income has been derived. 8. Under section 245-I of the Act, it has been provided that every order of Settlement Commission passed under sub-section (4) of section 245D shall be conclusive as to the matters stated therein and no matter covered by such order shall, save as otherwise provided in this Chapter, b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ding of jurisdiction shall be nullity in law and being beneficial provision, the benefit shall go to the assessee. 11. Article 265 of the Constitution of India provides that no tax shall be levied or collected except by the authority of law. In view of constitutional mandate once the matter falls within the jurisdiction of Settlement Commission, then with regard to such matter only Settlement Commission will have got jurisdiction to impose tax and not the assessing authority. 12. Any compulsory exaction of money by the Government amounts to imposition of tax which is not permissible except by or under the authority of a statutory provision vide CCE v. Kisan Sahkari Chinni Mills AIR 2001 SC 3379, p. 3380, Hindustan Times v. State of U.P. [2003] 1 SCC 591, p. 601, Shri Digvijay Cement Co. Ltd. v. Union of India AIR 2003 SC 767. 13. It is also settled law that the taxing statute should be construed strictly vide State of West Bengal v. Kesoram Industries Ltd. [2004] 1 SCC 201. Ordinarily, Causus Omisus should not be supplied by judicial interpretative process. 14. In Mahim Patram (P.) Ltd. v. Union of India, [2007] 3 SCC 668, the Hon'ble Supreme Court has reiterated the earlier se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in certain circumstances and to deal with the situation in the event of commission of fraud. Once power has been conferred on the Settlement Commission itself to deal with contingency, then such power cannot be delegated directly or indirectly to any authority of the Income-tax Department. 19. Under section 245L of the Act, the proceedings before the Settlement Commission is judicial proceeding. The jurisdiction conferred to exercise judicial or quasi-judicial power of a statute cannot be delegated except if specifically permitted, is the settled proposition of law vide Pradyat Kumar v. Chief Justice of Calcutta High Court AIR 1956 SC 285, Bombay Municipal Corpn. v. Dhondu AIR 1965 SC 1486, Sahani Silk Mills (P.) Ltd. v. Employees State Insurance Corpn. [1994] 5 SCC 346 and Skypak Couriers Ltd. v. Tata Chemicals Ltd. AIR 2000 SC 2008. 20. Even the discretionary administrative power entrusted by the statute to a particular authority, cannot be further delegated except as otherwise provided in the statute. The principle against sub-delegation is reasoned from the maxim 'delegatus non potest delegate' means a discretion conferred by statute is prima facie intended to be exercised by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ief facts of the case are that a search and seizure operation under section 132 of the Income-tax Act was carried out at the premises of the assessees on 15-12-2005. Notices were issued under sections 153A and 153C respectively. In response to the notices, the assessees have filed returns of income for the respective assessment years. Thereafter, the assessees moved an application before the Settlement Commission on 31-5-2007 for settlement of the cases. The Settlement Commission has passed an order under section 245D(4) on 31-5-2008 whereby the undisclosed income of the assessees was settled at Rs. 43 lakhs for the assessment years under consideration. While passing the order, the Settlement Commission observed in para 7 as follows, "The CIT/AO may take such action as appropriate in respect of the matter not placed before the Commission by the applicant, as per provision of section 245F(4) of the Income-tax Act, 1961." Thereafter, the A.O. has issued notice and finally estimated the income at Rs. 75,84,900, in addition to the agricultural income of Rs. 1,75,000 and made the additions accordingly, but the same were deleted by the CIT(A) by holding that the A.O. after the order of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee for relevant period, one by the Settlement Commission and another by the Assessing Officer, otherwise the very purpose of filing application before the Settlement Commission would be frustrated. There is no statutory provision which may empower the Settlement Commission to restore back the matter in respect of certain items to the Assessing Officer and also finally settle income of the assessee. In the case of Kuldeep Industrial Corpn. v. ITO [1997] 223 ITR 840 (SC), the hon'ble Apex Court observed that the Income-tax Officer can continue the proceedings till the date of submission of report by Commissioner and the Commissioner can refer in his report to material collected after date of application. As soon as the application is filed before the Settlement Commission, the A.O. ceased its jurisdiction. Section 245 of the Income-tax Act provides that the order of Settlement Commission is to be conclusive. The said section runs as under, "245-I. Order of Settlement to be conclusive - Every order of settlement passed under sub-section (4) of section 245D shall be conclusive as to the matter stated therein and no matter covered by such order shall, save as otherwise provided in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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