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of <h1>Court dismisses petitions challenging Settlement Commission proceedings for lack of procedural fairness</h1> <h3>AMRAPALI FINCAP LIMITED Versus VICE CHAIRMAN / MEMBERS / SECRETARY</h3> The court dismissed the petitions seeking writs of certiorari and mandamus against the Settlement Commission for alleged violations of natural justice ... Proceeding conducted by Settlement Commission - breach of the principles of natural justice - Held that:- The petitioners are aggrieved by the manner in which the proceedings are being conducted by the Settlement Commission on the applications made by them under section 245C(1) of the Income-tax Act, 1961. Thus, in effect and substance the petitioners seek a direction to the Settlement Commission to comply with the principles of natural justice and afford an opportunity to cross examine certain persons and to provide documents or other material relied upon by the Principal Commissioner of Income-tax in his report under rule 9 of the rules. In the opinion of this court, any direction issued by it to the Settlement Commission during the pendency of the proceedings before it would amount to dictating the manner in which the Settlement Commission should conduct the proceedings before it. In the opinion of this court, while exercising powers under Articles 226 and 227 of the Constitution of India, it is not permissible for this court to dictate the manner in which the Settlement Commission should conduct the proceedings pending before it. If the procedure followed by the Settlement Commission is contrary to the principles of natural justice or contrary to law, it is always open for the petitioner to challenge the ultimate order passed by the Settlement Commission. However, at this stage, merely on an apprehension that there is likely to be a breach of the principles of natural justice, this court would not interfere with the conduct of the proceedings before the Settlement Commission. Under the circumstances, this court is not inclined to entertain these petitions at this stage as they are premature. For the foregoing reasons, without entering into the merits of the submissions advanced by the learned counsel for the petitioners, the petitions being premature are dismissed at this stage. However, all contentions raised in these petitions are kept open to be agitated in an appropriate petition at any appropriate stage. Issues:Petitioners seeking writs of certiorari and mandamus for Settlement Commission not to pass final order without natural justice principles and cross-examination opportunity. Allegation of violation of natural justice principles, lack of opportunity for cross-examination, and verification of material evidence. Challenge regarding finalization order under Income-tax Act without proper opportunity for petitioners to present their cases.Analysis:Issue 1: Violation of Natural Justice PrinciplesThe petitioners filed applications under section 245C(1) of the Income-tax Act, 1961, before the Settlement Commission. The Settlement Commission admitted the applications and subsequently passed an order under section 245D(2C) after considering objections raised by the Principal Commissioner of Income-tax. The petitioners contended that they were not provided with evidences and statements relied upon by the Department, nor were they granted an opportunity for examination or cross-examination. The Settlement Commission acknowledged the need for petitioners to verify and examine adverse materials against them. The petitioners argued that the proceedings lacked natural justice principles, particularly the opportunity for cross-examination and verification of material evidence.Issue 2: Premature PetitionsThe petitioners raised concerns that the proceedings before the Settlement Commission were approaching a time bar, and final orders under section 245D(4) of the Income-tax Act might be passed without affording proper opportunities for cross-examination. The petitioners contended that without adequate chances to cross-examine individuals and verify material evidence, the finalization order would determine their total income. However, the court held that intervening in the ongoing proceedings of the Settlement Commission would amount to dictating its conduct. The court emphasized that challenging the ultimate order post-proceedings would be the appropriate course of action if there were breaches of natural justice or legal procedures. Therefore, the court dismissed the petitions as premature, keeping all contentions open for future challenges at the appropriate stage.In conclusion, the judgment revolves around the petitioners' plea for writs to ensure natural justice principles and cross-examination opportunities in the Settlement Commission proceedings under the Income-tax Act. The court's decision to dismiss the petitions as premature highlights the importance of challenging final orders post-proceedings if there are concerns regarding procedural fairness and natural justice.
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