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2016 (8) TMI 657 - MADRAS HIGH COURT

2016 (8) TMI 657 - MADRAS HIGH COURT - TMI - Power of the Commission to reopen its proceedings - Rectification application - whether the Settlement Commission could have entertained a miscellaneous petition at the behest of the Department for rectifying its orders dated 16.7.1998, 15.10.1998 and 16.7.1998, under Section 245D(4) of the Act - Held that:- When the statute does not provide power of review with the authority and if it is done, it has to be termed as wholly without jurisdiction. Sub s .....

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n the said provision is not a power of review. - But the phraseology used by the legislation is “rectification” and such rectification can be done on any mistake apparent from the record. Therefore, such power exercisable under sub Section 6D of Section 245D can be exercised only to rectify a mistake and such mistake should be apparent from the record. - Thus, even as per the amendment made by Finance Act, 2011, power of review is not conferred on the Settlement Commission. - Rudime .....

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s it relates to the computation of terminal date for charging the interest under Section 234B alone and the order passed by the Settlement Commission dated 8.8.2007 are quashed. - After the above order was dictated, the learned Standing Counsel for the respondent Department submitted that if the order passed by the third respondent is quashed, then it would amount to setting aside the rate of interest as ordered by the Commission. The Revenue need not have any apprehension in this regard and .....

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.R.Kumar For the respondent : Mr.T.Pramod Kumar Chopda, Senior Standing Counsel COMMON ORDER Heard Mr. T.N. Seetharaman, learned Senior counsel appearing for the petitioner, assisted by Mr. R. Kumar and Mr. Pramod Kumar Chopda, learned Senior Standing Counsel, appearing for the respondent. 2. All the Writ Petitions arise out of the common issue with regard to the scope and power of Settlement Commissioner under the Income Tax Act to rectify its orders. Though there are six Writ Petitions, the Wr .....

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immediately rush to this Court but filed a miscellaneous petition before the Commission stating that the order passed by the commission on an miscellaneous petition filed by the Department is time barred. In the meantime, the third respondent viz., the Assessing Officer gave effect to the order passed by the Settlement Commission dated 19.1.2005, 13.12.2004 and 19.1.2005, and after about two years, the miscellaneous petitions filed by the petitioners were dismissed by order dated 8.8.2007. These .....

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7.1998, under Section 245D(4) of the Act. The applications filed by the petitioners for settlement of their case under Section 245D was admitted by orders dated 28.2.1996, 18.1.1996, 29.2.1996 respectively. Thereafter, the Commission allowed the case to be proceeded with, and an order under sub Section 4 of Section 245D being the final order of the Commission settling the case of the petitioners was passed on 16.7.1998, 15.10.1998 and 16.7.1998 respectively. The Department did not question the o .....

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cial year upto the date of Commission's order or under Section 245D (4). It is further stated that in the case of assessee, the Commission had ordered to charge interest under Section 234B for the respective assessment year, up to either date of order under Section 143(1)/143(1)(a) or under Section 143(3)/144 of the I.T. Act whichever is later. Therefore, by referring to the judgment of the Hon'ble Supreme Court, the Department contended that mistake has crept in the order, with regard t .....

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r of Income Tax (2010) 328 ITR 447, (SC), the Hon'ble Supreme Court has categorically held that under Section 245-I of the Act, the order of the Settlement Commission is final and conclusive except in cases of fraud and misrepresentation. In which case, the matter could be reopened by way of review or recall. Therefore, it is submitted that except under those two circumstances mentioned by the Hon'ble Supreme Court, the case which has been settled by the Commission cannot be reopened. Th .....

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he order passed by the Commission on 19.1.2005, 13.12.2004 and 19.1.2005, being well before the said date, the commission had no jurisdiction to entertain the miscellaneous petition. 5. The learned counsel referred to a decision of the Hon'ble Division Bench of the Andhra Pradesh High Court in the case of U.Narayanamma vs. Government of India, (2013) 352 ITR 598 (AP) wherein the Hon'ble Andhra Pradesh High Court held that the earlier order of the Settlement Commission though contrary to .....

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the commission could not be sustained. 6. The learned Standing counsel appearing for the Revenue contended that the power of the Settlement commission under Section 245F confers all powers which are vested in an Income Tax Authority under the Act and therefore, the authority was well within the jurisdiction to apply before the commission for rectification of the mistake which was apparent from the face of the order. Further, by virtue of the said provision, since the settlement Commission can ex .....

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245D (4) of the Act. Therefore, it is submitted that the order passed by the commission on 19.1.2005, 13.12.2004 and 19.1.2005, was perfect and the consequential order which came to be passed on 8.8.2007 on an miscellaneous petition filed by the petitioners/assessees is also perfectly legal. 7. After hearing the learned counsel for the parties and perusing the materials placed on record, the first issue to be answered is with regard to the power of the Commission to reopen its proceedings. Sect .....

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e statute and power of review is not inherent with the authority. However, when the statute does not provide power of review with the authority and if it is done, it has to be termed as wholly without jurisdiction. Sub section (1) of Section 245(F) which states that Settlement Commission shall have all powers which are vested in Income Tax Authority under the Act cannot be read in isolation but it should be read in tandem with Section 245(I) and if it is done, then it is to be held that there is .....

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rectify a mistake and such mistake should be apparent from the record. Thus, even as per the amendment made by Finance Act, 2011, power of review is not conferred on the Settlement Commission. 8. In the case of Smt.U.Narayanamma, Writ Petitions were filed challenging the orders passed by the Settlement Commission on the ground that the Commission has no power to rectify its earlier order even under Section 245D of the Income Tax Act, 1961. The Hon'ble Division Bench of the Andhra Pradesh Hig .....

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hich went to the root of its jurisdiction and held that if at all revenue had to question the same, it should be by a writ of certiorari. The said decision squarely applies to the facts of the present case. 9. One more observation that is required to be made in the instant case is that the Revenue while rectification/recalling of the order passed by the Commission, referred to a decision of the Hon'ble Supreme Court in the case of Hindustan Bulk Carriers and Damani Bros, with respect to the .....

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