Settlement Commission exceeded jurisdiction by reassessing income; petitioner can challenge despite acceptance. Court allows writ petition.

The Court held that the Settlement Commission exceeded its jurisdiction by reassessing income, and the petitioner's acceptance of the assessment did not prevent challenging the order. The Court allowed the writ petition, setting aside the Commission's order and rejecting the petitioner's application. The Assessing Authority was given liberty to proceed under sections 147 and 148 of the Income-tax Act, with costs not imposed.

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Issues involved:
The issues involved in this case include the reconstruction of missing records, disclosure of additional income by the petitioner, jurisdiction of the Settlement Commission under section 245C of the Income-tax Act, reassessment of income by the Commission, acceptance of assessment by the petitioner, and the validity of the order passed by the Commission.

Reconstruction of Records:
The writ petition was filed in 1998 but faced delays due to missing records. A Single Judge ordered the reconstruction of the bundle, leading to the presentation of reconstructed records for disposal.

Disclosure of Additional Income:
The petitioner, an income-tax assessee, disclosed additional income of Rs. 8,02,980 for various assessment years. The Settlement Commission, after an enquiry, assessed the total income at Rs. 46,07,000, granting waivers and instalment payment options.

Jurisdiction of Settlement Commission:
The petitioner challenged the Commission's order, arguing that it exceeded its jurisdiction under section 245C by reassessing income. The Commission's actions were compared to the powers of the Assessing Authority under section 147, leading to the petition to quash the order.

Acceptance of Assessment:
The petitioner accepted the Commission's assessment and agreed to pay in instalments. The Income-tax Department contended that the petitioner cannot now question the order after voluntarily submitting to the Commission's jurisdiction.

Validity of Commission's Order:
The Court held that the Commission acted beyond its jurisdiction by reassessing income, contrary to settled law. The agreement by the petitioner did not confer jurisdiction, and there was no estoppel to challenge the order's validity.

Reassessment Possibility:
The Court clarified that the Assessing Authority could reopen the assessment under section 147, provided the period of limitation under section 149 was available, excluding time spent before the Settlement Commission and during the writ petition.

Conclusion:
The writ petition was allowed, setting aside the Commission's order and rejecting the petitioner's application. The Assessing Authority was granted liberty to proceed under sections 147 and 148 of the Act, if necessary, with costs not imposed.

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