TMI Blog1989 (1) TMI 4X X X X Extracts X X X X X X X X Extracts X X X X ..... ecial leave granted. This is an appeal against the judgment and order of the Settlement Commission dated August 7, 1987. The fact that an appeal under article 136 of the Constitution lies against the order of the Settlement Commission is now beyond the pale of controversy in view of the decision of this court in CIT v. B. N. Bhattachargee [1979] 118 ITR 461. The appellant had applied to the Settlement Commission for settlement of its assessment for the assessment years 1948-49 to 1975-76 under the Income-tax Act, 1961 (hereinafter referred to as "the Act"). That application had to be proceeded with in accordance with section 245C of the Act which is as follows : "245C. (1) An assessee may, at any stage of a case relating to him, make an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tlement for the years 1948-49 to 1959-60, but agreed to the settlement for later years. The Commission, it appears, accordingly made an order on August 24, 1977, rejecting the application for settlement for the years 1948-49 to 1959-60. The appellant, on September 20, 1977, applied to the Commission to recall its earlier order dated August 24, 1977, since the same had been made without furnishing any opportunity of hearing to the appellant. Section 245D(1) provides as follows : "245D. Procedure on receipt of an application under section 245C.-(1) On receipt of an application under section 245C, the Settlement Commission shall call for a report from the Commissioner and on the basis of the materials contained in such report and having rega ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of this court in M. S. Gill v. Chief Election Commissioner [1978] 1 SCC 405 and Maneka Gandhi v. Union of India [1978] 1 SCC 248. The Finance Act, 1979, however, amended section 245D with effect from 1st April, 1979, and sub-section (1A) was inserted in section 245D which empowered the Settlement Commission to overrule the objection of the Commissioner. Sub-section (1A) of section 245D reads as follows : "Notwithstanding anything contained in sub-section (1), an application shall not be proceeded with under that sub-section if the Commissioner objects to the application being proceeded with on the ground that concealment of particulars of income on the part of the applicant or perpetration of fraud by him for evading any tax or other su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1977, the appellant applied to the Commission to recall its order dated August 24, 1977, since it had been passed without giving an opportunity of hearing to the appellant. That application was pending. In the meantime, as mentioned hereinbefore, on April 1, 1979, the Finance Act, 1979, inserted sub-section (1A) to section 245D which empowered the Settlement Commission to overrule the objections of the Commissioner. On May 29, 1979, the appellant applied to the Settlement Commission to permit him to contest the objections of the Commissioner under the said proviso now inserted. The matter was taken up after a long gap in June, 1987, and it was heard on June 18, 1987, and July 1, 1987. The appellant contended that the order of August 24, 197 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , in violation of the principles of natural justice or a quasi-judicial act in violation of the principles of natural justice, is void or of no value. In Ridge v. Baldwin [1964] AC 40 and Anisminic Ltd. v. Foreign Compensation Commission [1969] 2 AC 147, the House of Lords in England has made it clear that breach of natural justice nullifies the order made in breach. If that is so, then the order made in violation of the principles of natural justice was of no value. If that is so, then the application made for the settlement under section 245C was still pending before the Commission when the amendment made to the Finance Act of 1979 came into effect and the said amendment being procedural, it would govern the pending proceedings and the Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... monstrating that the Commissioner was not justified in making the objections and, secondly, that the Commission should not accept or accede to the objections in the facts and circumstances of the present case. We are of the opinion that in view of the facts and circumstances of the case and in the context in which these objections had been made, it is necessary, as a concomitant of the fulfilment of natural justice, that the appellant should be heard on the objections made by the Commissioner. It is true that in the relevant orders for the years for which the Commissioner had objected, concealment had been upheld in the appeal before the appropriate authorities. But it may be that in spite of this concealment, it may be possible for the app ..... X X X X Extracts X X X X X X X X Extracts X X X X
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