TMI Blog2014 (2) TMI 520X X X X Extracts X X X X X X X X Extracts X X X X ..... o settlement order u/s 245D(4). Such a situation could not have been intended by the statute. Though now the situation has been taken care of by the insertion of the first proviso to Section 245F(2) by the Finance Act, 2007 w. e. f. 01.06.2007, but that cannot prejudice the rights of the revenue prior to that date as it seems to us that it was inserted only “ex abundant cautela". In Calcutta Jute Manufacturing Co. vs. CTO, (1997 (7) TMI 118 - SUPREME COURT OF INDIA), the Supreme Court held that a machinery provision must be so interpreted as to effectuate its purpose, and the distinction between a charging section and a machinery provision whose function is to effectuate the charge, was pointed out in the context of the rule of interpretation to be adopted. The details of the application, probe, consideration, hearing and disposal, found in the report, had been incorporated in the statutory provisions in Chapter XIX-A - it was only in the nature of machinery provisions for the purpose of settlement of tax disputes between the assessee and the Revenue - The provisions do not compel any assessee to resort to section 245C, but that can be availed of, if the assessee so chooses - ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pass any orders. Consequently, the Commission itself did not possess jurisdiction. The petitioner relied upon the decisions reiterated in CIT v. Hindustan Bulk Carrier, (2003) 259 ITR 449 (SC) and CIT v. Damini Brothers, (2003) 259 ITR 475 (SC). 2. After hearing counsel for the parties, the Settlement Commission rejected the petitioner s argument. Learned counsel relied upon the ruling of the Supreme Court reported as Brij Lal Others v. Commissioner of Income Tax, (2011) 1 SCC 1, for the following observations : 41. Further, as stated above, the jurisdiction of AO is not fettered merely because the applicant has filed the settlement application. The Act does not contemplate stay of the proceedings during that period i.e. when the Settlement Commission is deciding whether to proceed or reject the settlement application. The jurisdiction of the Settlement Commission to proceed commences only after an order is passed under Section 245-D(1). That, after making an application for settlement the applicant is not allowed to withdraw it [see Section 245-C(3)]. Once the case stands admitted, the Settlement Commission shall have exclusive jurisdiction to exercise the powers of the In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion was admitted on 10.08.2000, the petitioner was represented and heard. At this stage, no objection as to the jurisdiction of the Settlement Commission was made, the observations in the impugned order of the Commission that to re-visit the order of 10.08.2000 would in effect amount to impermissible review is, in the opinion of this Court, sound reasoning. The conclusiveness attached to the order made by the Commission has been emphasized time and again. Section 245 (1) reiterated this in no uncertain terms. The Supreme Court has also underlined this in CIT, Mumbai v. Anjum M.H. Ghaswala Ors., 2001 252 ITR (1). 6. The decision in Deen Dayal v. Union of India, (1986) 160 ITR 12, in our opinion, concludes the issue sought to be urged against the petitioner. In fact the Court visualized the very situation which we are called upon to examine and held that even while upholding the authority of the Assessing Officer to complete assessment, clarify that there will be no impediment to the Settlement Commission in exercise its powers if it decides to exercise them. On the other hand this Settlement Commission decides not to proceed with application, there is no distinct possibility of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... specially a complex provision therein, so that a balance may be struck between purpose and result without doing violence to statutory language and social values. The chapter is fresh and the issue is virgin; and that makes the judicial adventure hazardous, compounded by the involved and obscure drafting of the bunch of provisions in Chap. XIXA. 9. In our view, this rule should govern our approach to the situation arising in the case in hand. 10. It is a settled rule of construction that tax laws, like all other laws, shall be interpreted reasonably and in consonance with justice so as to avoid an absurd consequence that may lead to mischief or abuse: (Hegde, J., in Jodha Mal Kuthiala vs. CIT, (1971) 82 ITR 570 (SC). A machinery provision in the Income Tax Act cannot be subjected to the literal or strict rule of construction that is adopted to interpret a charging section. In Calcutta Jute Manufacturing Co. vs. CTO, (AIR 1997 SC 2920), the Supreme Court held that a machinery provision must be so interpreted as to effectuate its purpose, and the distinction between a charging section and a machinery provision whose function is to effectuate the charge, was pointed out in the con ..... X X X X Extracts X X X X X X X X Extracts X X X X
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