TMI Blog2004 (4) TMI 67X X X X Extracts X X X X X X X X Extracts X X X X ..... ned in any proceedings under the Act, or any other law for the time being in force. In all these cases, the applicants in the year 1994 (in January or February) moved an application individually under section 245C of the Act. In all these cases, the Settlement Commission made an order under section 245D(1) on or about April 21, 1995. We are not referring to the assessment years for which the orders were passed by the Settlement Commission, as the same is not relevant for deciding the present controversy. After making an order under section 245D(1) of the Act, the Settlement Commission, after examination of all the material placed on record and after giving an opportunity to the applicants as contemplated, in exercise of the power under sub-section (4) of section 245D of the Act, made an order on or about May 13, 1998. The terms of settlement are placed on record (in CWP No. 3322 of 2003 at page 73). It is a part of the order under section 245D(4). One of the terms of settlement, i.e., No. 23, refers to waiver of interest under sections 234A, 234B and 234c. The other terms of settlement being not relevant for deciding this petition, are not referred to. It appears that thereafte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er the Act or any other law for the time being in force. It was also pointed out that the Supreme Court in the case of Anjum M.H. Ghaswala [2001] 252 ITR 1 has specifically pointed out that the Settlement Commission has no power to reopen any proceedings under the Act, as its orders in view of section 245-I are conclusive. However, the Settlement Commission in view of the decision directed the Assessing Officer to charge interest. Being aggrieved by the aforesaid decision of the Settlement Commission, the petitioners have contended before us that after the orders made on May 13, 1998, the Settlement Commission has no power to recall the earlier order made by it. It was further submitted that the said order was passed after considering the provisions of law and various decisions of the Supreme Court. It was further contended that if in some subsequent decision the court has held that the Settlement Commission has no power to waive or reduce the interest, the finality of the order made by it in 1998 cannot be disturbed after a period of about four years. As against that, it was submitted by learned counsel for the Revenue that the powers can be exercised under the Act for rectifi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ttlement Commission to have a case settled and disposed of in the manner provided "hereinafter" meaning thereby that the case has to be disposed of in the manner prescribed in this Chapter only. Under sub-section (6) of section 245D of the Act, terms of settlement include any demand by way of tax, penalty or interest, the manner in which any sum due under the settlement shall be paid and also provides all other matters to make the settlement effective. Sub-section (6) also states that the settlement shall be void if it is obtained by fraud or misrepresentation of facts. On failure to pay the tax payable in pursuance of an order under sub-section (4) within 45 days of the receipt of a copy of the order or where the Commission has extended the time limit for payment of such tax or has allowed instalments for payment thereof, the assessee shall be liable to pay simple interest at 15 per cent. per annum on the amount remaining unpaid from the date of the expiry of the period. In case the settlement becomes void under the said sub-section (6), the matter shall be deemed to have been revived from the stage from which the application was allowed and the income-tax authority concerne ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 245D, the Settlement Commission will have exclusive jurisdiction to exercise the power and perform the functions of an income-tax authority under the Act in relation to the cases. This makes it clear that the powers which are vested in an income-tax authority under the Act are required to be exercised over the matter which is pending before a Settlement Commission and it is the Settlement Commission which will have exclusive jurisdiction to exercise the powers and perform the functions of an income-tax authority until an order is made under sub-section (4) of section 245D of the Act. After the order is made under sub-section (4) of section 245D of the Act, the Commission will have no jurisdiction to exercise the power and perform the function of an income-tax authority. On behalf of the Revenue, it was submitted that exactly in a similar situation an order was made under section 154 of the Act withdrawing the reduction or waiver of interest granted by a Settlement Commission under sections 234A, 234B and 234C of the Act while passing an order under section 245D(4) of the Act. The assessee moved the High Court under article 226 of the Constitution of India (AOP of Sanjaybhai R. P ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in conflict with it. The Supreme Court in Anjum M.H. Ghaswala [2001] 252 ITR 1 pointed out the mode adopted by the Commission by equating itself with the Board for the purpose of exercising the power under section 119(2) of the Act. The Board falls within the ambit of an income-tax authority. The court also examined the question whether the Commission could be construed as a Board for the purpose of section 119 or in the alternative by virtue of section 245F(1) read with section 245A(d) read with section 116 the Commission could exercise the power as the Board under section 119 of the Act. The court pointed out that power under section 119 is vested in the Board and the context in which the power is vested in the Commission under section 245C indicates that Parliament did not intend that power under section 119 could be exercised by the Commission for granting such relief and the Commission cannot be equated with the Board for exercise of power under section 119 of the Act. The Supreme Court also pointed out that "its orders (Settlement Commission's) under section 245-I are conclusive which cannot be reopened in any proceedings under the Act or any other law for the time being in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sion to rectify the order as it became functus officio. In view of the apex court decision in the case of Anjum M.H. Ghaswala [2001] 252 ITR 1 the order made by the Settlement Commission under section 245-I of the Act is conclusive and final, therefore, the same cannot be reopened in any proceedings under the Act or any other law. Section 154 could not have been invoked as the Settlement Commission ceases to be an authority under the Act after the order is made and can exercise such power only if authorised under the Act and under that Chapter only. It is clear that except in the manner provided in the Chapter, the case cannot be reopened for any purpose unless there is fraud or misrepresentation. After the order is made under sub-section (4) of section 245D it becomes final and conclusive and the same can be modified only in the manner specifically provided in the Chapter and not in view of the other provisions contained in the Act. Reading the provisions of section 245F(1) and (2), sections 245H and 245D(6) it is clear that the order which has become conclusive as to the matters stated therein, cannot be disturbed except as provided in this Chapter and it is not open to reope ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... her empowered to direct that the assessee whose case has been decided by it shall not be proceeded with or prosecuted under the Income-tax Act or under the Indian Penal Code or under any other Central Act for the time being in force with respect to the case covered by the settlement. The orders of the Commission are final, subject of course to constitutional remedies." The apex court also pointed out that Chapter XIX-A is a part of the Income-tax Act and must be construed consistent with the overall scheme and object. The decision has to be taken by the Settlement Commission having regard to all the facts and circumstances before it, in the light of the object, purpose and scheme of the enactment. The Settlement Commission has to provide for the terms of settlement including any demand by way of tax, penalty or interest, the manner in which any sum due under the settlement shall be paid, etc. When sub-section (6) of section 245D refers to terms of settlement, it should be construed in a grammatical sense to mean the terms of agreement, arrangement or undersigned. The Settlement Commission was approached by the assessee and in accordance with law, the order was made by the Set ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hallenged before the constitutional forum only. The decision rendered by a competent forum having jurisdiction to decide the disputes, its efficacy would not be impaired unless the same is challenged and the order is annulled, modified, reversed, etc. When the Act provides that the order shall be final and conclusive, the final judgment or the final decision of the Settlement Commission does not lose its force and as such because in a different case subsequently a view is taken indicating that the views expressed are wrong. A final decision, however wrong, is still final and its binding force does not depend upon its correctness. There must be an end of litigation. The Settlement Commission is provided under the Income-tax Act for the said purpose. Where the terms are settled and after having accepted the same merely because in some other decision it is pointed out as to what the law is, it is not open to move an application under section 154 of the Act. When the order made by the Settlement Commission is made final and conclusive and cannot be reopened under any provisions of this Act or under any other law, save as otherwise provided in Chapter XIX-A, the same is not subject ..... X X X X Extracts X X X X X X X X Extracts X X X X
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