Settlement Commission discretion on prima facie admission is limited to judicial review absent natural justice breach

After omission of section 245D(1A), admission of a settlement application depends on the Settlement Commission's prima facie assessment and discretion, not on automatic rejection merely because the Revenue objects. Judicial review over such orders is limited, and interference is not warranted absent exceptional grounds or a demonstrable breach of natural justice. Where the Revenue was given opportunities to place objections and was heard at both the admission stage and before the final order, the challenge to the admission order failed. The belated attempt to amend the writ petition to attack the final order was also declined, and the settlement proceedings were upheld.

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Issues: Whether the order admitting the settlement application under section 245D(1) of the Income-tax Act, 1961, and the refusal to interfere with the subsequent settlement proceedings were liable to be set aside on the grounds of non-consideration of the Revenue's objections, absence of full and true disclosure, and violation of natural justice.

Analysis: The scope of judicial review over orders of the Settlement Commission is narrow. After the omission of section 245D(1A), the Commission is not bound to reject an application merely because the Commissioner objects; it may decide admission on a prima facie view and the material before it. The record showed that the Revenue was given opportunities to place its objections and was heard at the admission stage as well as before the final order. In those circumstances, the Court found no basis to hold that the Commission acted in breach of natural justice or beyond its discretion in admitting the case for settlement. The Court also declined to permit the belated amendment sought to challenge the final order.

Conclusion: The challenge to the admission order and the request to amend the writ petition were rejected; the discretionary order of the Settlement Commission was not interfered with.

Final Conclusion: The writ petition failed, and the settlement proceedings were upheld as falling within the limited scope of judicial review.

Ratio Decidendi: After the omission of section 245D(1A), admission of a settlement application depends on the Settlement Commission's discretion on a prima facie assessment, and such an order will not be interfered with in judicial review absent exceptional grounds or demonstrable violation of natural justice.

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