Exclusive jurisdiction of Settlement Commission bars appellate authorities from revisiting assessments during settlement proceedings

Once an application under the settlement provisions is admitted to be proceeded with, exclusive jurisdiction shifts to the Settlement Commission and the income-tax authorities lose power over the case until the Commission passes its final order. In that situation, the Commissioner (Appeals) cannot set aside the assessment orders or direct fresh assessments to give effect to the settlement process, because no appellate power remains to deal with those assessments. The settlement mechanism itself is intended to resolve the matter within the Commission, including any consequences of fraud or misrepresentation, without reviving ordinary appellate jurisdiction in the income-tax hierarchy.

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Issues: Whether, after an application under the settlement provisions had been admitted for being proceeded with, the income-tax authorities and the Commissioner (Appeals) retained jurisdiction to set aside the assessment orders and direct fresh assessments in conformity with the Settlement Commission's final order.

Analysis: On admission of the settlement application, the statutory scheme vested exclusive jurisdiction in the Settlement Commission and withdrew the powers of the income-tax authorities in relation to the case until the Commission passed its final order. The assessment orders could not thereafter be dealt with by the Commissioner (Appeals), and no provision authorised the appellate authority to set aside the assessments or require the Assessing Officer to pass fresh orders to give effect to the settlement proceedings. The settlement mechanism itself contemplated that the Commission would settle the matter and make the settlement effective, including dealing with the consequences of fraud or misrepresentation, without reviving appellate jurisdiction in the income-tax hierarchy.

Conclusion: The Commissioner (Appeals) had no jurisdiction to proceed with the appeals or to set aside the assessments, and the impugned order was unauthorised; the Revenue's appeals succeeded.

Ratio Decidendi: Once the Settlement Commission admits an application to be proceeded with, exclusive jurisdiction shifts to the Commission and the income-tax appellate authorities cease to have power to adjudicate or modify the assessment orders in the case.

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