[ Filing Applications l Settlement of Cases l Scrutiny of Case Papers ]
 

Re-opening of completed assessments (section 245E)

In view of section 245A(b), an application for settlement can be made only in respect of the assessment years for which proceedings are pending. However, if the Settlement Commission is of the opinion (reasons for such opinion to be recorded by it in writing) that, for proper disposal of the case pending before it, it is necessary or expedient to reopen any proceeding connected with the case but which had been completed by an Income-tax authority before the application under section 245C was made, it may with the concurrence of the applicant, reopen such proceedings and pass such order thereon as it thinks fit, as if the case covered such years also. No proceedings, however, shall be re-opened by the Commission if the period between the end of assessment year to which such a proceeding relates and the date of application for settlement under section 245C exceeds nine years. No proceedings are to be reopened if it only serves the interest of the applicant (CIT vs. Paharpur Cooling Towers Pvt. Ltd. 219 ITR 618 SC).
 

Exclusive jurisdiction of the commission (u/s 245F)

Under section 245F, the Commission has exclusive jurisdiction over the matters contained in the settlement application from the date an order is passed by it under section 245D(1) to the date an order under section 245D(4) is passed. However, there is no bar on the power of the ITO to make an order of assessment during the period of making an application and passing of the order under section 245D(1) by the Commission allowing the application to be proceeded with. This order will, however, be rendered infructuous, once the application is allowed to be proceeded with in respect of the assessment year in question and the settlement made thereafter u/s 245D(4) will be final.

Immunity from prosecution and imposition of penalty (u/s 245H).

Under section 245H(1) the Commission, may if it is satisfied that the applicant has cooperated with it in the proceedings before it and has made a full and true disclosure of his income and the manner in which such income has been derived, grant to such person, subject to such conditions as it may think fit to impose, immunity from prosecution for any offence under the Income-tax Act or under the Indian Penal Code or under any other Central Acts and also either wholly or in part, from the imposition of penalty under the Income-tax Act, 1961 with respect to the case covered by the settlement. However, w.e.f. 01.06.1987 no such immunity can be granted by the Commission in cases where the proceedings for prosecution for any such offence have been instituted before the date of receipt of the application under section 245C.

Settlement applications invariably contain a prayer for waiver of penalty and interest and for granting immunity from prosecution. Request of the applicant in this regard is examined by the Commission on the facts and circumstances of each case and a specific finding is given on these points.
 

1.4

Power of the commission to send a case back to the income-tax officer (u/s245HA)

If the Commission is of the opinion that the applicant has not cooperated with the Commission it may send the case back to the ITO who shall there upon dispose of the case in accordance with the provisions of the Income-tax Act as if no application u/s 245C was made. In such a situation the A.O. shall also be entitled to use all the materials and other information produced by the applicant before the Commission or the results of the enquiry or the evidence recorded by it in course of its proceedings. For the purpose of time limits prescribed under various sections mentioned in section 245HA(3), the period commencing with the date of application u/s 245C to the date of sending the case back to the ITO shall be excluded.

Order of settlement to be conclusive (u/s245.1)

Every order of the settlement passed by the Commission u/s 245D(4) shall be conclusive as to the matters stated therein unless such an order becomes void on the ground of fraud or misrepresentation of facts. However, since the Commission is a Tribunal its order is amenable to appeals to the Supreme Court under Article 136 of the Constitution by special leave. [CIT vs. B.N.Bhattacharjee, (118 ITR 4611)].

Bar on subsequent application for settlement in certain cases (u/s245K)

Where an order passed by the Commission u/s 245D(4) provides for the imposition of penalty for concealment of income or the applicant is convicted of any offence under Chapter XXII of the Income-tax Act in relation to that case or the case is sent back to the A.O. by the Commission u/s 245HA, the applicant shall not be entitled to apply for settlement under section 245C in relation to any other matter.

Power to rectify a mistake

Under section 245F(1) the Commission, in addition to the powers conferred on it under Chapter XIXA also has all the powers which are vested in an Income-tax Authority under this Act. Therefore, the Commission has the power to rectify a mistake in its order which is apparent from record in view of provisions of section 154 of Income-tax Act .

[Top]