TMI Blog1992 (3) TMI 60X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 sum chargeable or imposable under this Act, has been established or is likely to be established by any income-tax authority, in relation to the case : Provided that where the Settlement Commission is not satisfied with the correctness of the objection raised by the Commissioner, the Settlement Commission may, after giving the Commissioner an opportunity of being heard, by order, allow the application to be proceeded with under sub-section (1) and send a copy of its order to the Commissioner." By section 66(b) of the Finance (No. 2) Act, 1991, section 245D(1A) came to be omitted. This amendment became effective from September 27, 1991, the date on which the Finance Act received the assent of the President. In the two cases before us it is an admitted position that the same applicant had, at least for some of the years for which the present application has been made, made an application earlier and the same had been rejected by the Commission upholding the objection raised ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er which the parties might and ought to have litigated and have had decided as incidental to or essentially connected with the subject-matter of the litigation. It was his submission that when an application had earlier been rejected it could be taken as having been rejected not only because the Commissioner's objection under section 245D(1A) was acceptable to the Commission but also- because, in the view of the Commission, the nature and circumstances of the case warranted the rejection of the application. In this regard he also put forth a contention that it was not relevant whether the case was argued in regard to matters other than the objection of the Commissioner as it should only be taken that such matters were considered by the Commission when it took its decision. Shri A. C. Chandra, Commissioner of Income-tax (DR), in his arguments stated that if one went by the purpose behind the setting up of the Settlement Commission and the observations in this regard, made by the Supreme Court in CIT v. B. N. Bhattacharjee [1979] 118 ITR 461, the tax evader had to be kept out from seeking a settlement and the amendment made to the law would not in any way affect the role of the Set ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ld only apply to the cases referred to therein and could not, by any stretch of imagination, be taken to apply to any other case. Since there was no specific bar to an applicant's coming once again, before the Settlement Commission as long as the application was maintainable, it had to be considered by the Commission, if the earlier disability from which the applicant suffered could no more be held against him. Shri Varma also claimed that the matter in issue before the Commission in the fresh application was not the same as in the earlier application as, in fact, the matter in issue in the order relating to the earlier application, which was the correctness of the objection raised by the Commissioner under section 245D(1A), cannot come up for consideration at all while dealing with the present application. According to Shri G. C. Sharma, Senior Advocate, who appeared on behalf of Messrs Kanyaka Metal Mart, Guntur, the entire issue related to the matter of assumption of jurisdiction by the Commission. According to him, Chapter XIX-A is a self-contained code and unless there was specific provision in this chapter debarring a person from making an application once again in respect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sion of section 245D(1A) from the Act would be lost if a very narrow view was taken that an applicant in whose case an earlier application had been rejected upholding the objection under section 245D(1A), cannot come once again, after the removal of this provision, on the ground that there should be some finality to matters decided by the Settlement Commission. Shri Sharma maintained that it is well settled that the principle of res judicata does not apply to income-tax proceedings. This is, he said, on the ground that, even in so far as the Commission is concerned, there is no lis in the sense that there are no two contending parties. Even otherwise he said, the earlier finding would not act as res judicata because that finding, which was with reference to section 245D(1A), was no longer available. Restating the earlier claim that what was involved was only the question of jurisdiction, he said that nothing more was to be looked into in dealing with the application than whether the conditions specified in section 245C(1) were satisfied. He also referred in this connection to the observations of the Supreme Court in the case of S. S. Gadgil v. Lal and Co. [1964] 53 ITR 231, that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the same assessee's case but for different assessment years, that though the doctrine of res judicata is not applicable to the orders of the Tribunal, it is proper and desirable that when the Tribunal takes a particular view on the scope and effect of a statutory provision, it does not contradict itself and come to a diametrically opposite view later on as it would be embarrassing for the Revenue and assessees in- general. In any case, as a judicial Tribunal, we cannot overlook the wholesome rule of public policy that there should be a finality to a decided issue and, hence, the same issue cannot be required to be considered again. The observation of the Supreme Court in Parashuram Pottery Works Co. Ltd. v. ITO [1977] 106 ITR 1 at page 10 : "We have to bear in mind that the policy of law is that there must be a point of finality in all legal proceedings" is relevant in this regard. Thus, whether we proceed on the principle of res judicata or the rule of public policy, we have to consider whether in the present applications the same issue as was decided earlier has come up for consideration. The crux of the matter, therefore, is : what was the issue decided earlier ? The earli ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he substance of the order. For the reasons set out above, we answer the reference made to this Bench as follows : In a case where a settlement application made under section 245C has been rejected before September 27, 1991, upholding the objection raised by the Commissioner under section 245D(1A), an application by the same applicant for the very same years must be considered on or after September 27, 1991, as a valid application, if maintainable otherwise. The application in the case of Birumal Gaurishankar Jain and Co. (Application No. 9/28/91/10-I.T.) will now go back to the Principal Bench of the Settlement Commission, New Delhi, and the application in the case of Kanyaka Metal Mart (Application No. 2/G/21/91-I.T.) to the Additional Bench of the Settlement Commission, Madras, for appropriate orders to be passed by them under section 245D(1). D.C. SHUKLA (Chairman).-I agree. C. V. KOTHARI and S. C. BAHL (Members) and V. K. SHRIVASTAVA (Vice-Chairman).-We are unable to express any views with regard to the general proposition canvassed by Shri Sharma that an applicant can come any number of times for the very same years despite the rejection of his earlier applications. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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