TaxTMI 
TaxTMI 
2011 (5) TMI 116
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....Act, 1961 (hereinafter referred to as 'the Act'). The revenue assailed the orders mainly on the ground that opportunity of hearing was not afforded as provided under section 245D(4) of the Act. It was also submitted that the Settlement Commission became functus officio and the proceedings stood abated in terms of the provisions of section 245HA of the Act. Assessee also raised the question during proceedings which were held before the Settlement Commission before the orders were passed. It was submitted that procedure adopted by the Settlement Commission while passing the orders is in flagrant violation of the provisions of section 245D(4) of the Act. The orders were passed without application of mind and appreciation of material on record. 2. The Single Bench has held that the Settlement Commission did not become functus officio. Cases have been remitted according to the procedure as provided under section 245D(4). The Single Bench has remitted the matter to the Settlement Commission to examine the same afresh, after affording opportunity of hearing to the parties and whatever amount has been deposited by the respective assessee under the orders impugned would be subject to fin....
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....he applicant and the department, as laid down in section 245D(4) of the Act was not practicable However, to comply with the directions of the High Court, the orders were passed. The cyclostyle mentioning of the aforesaid facts is not going to cause dent in the reasoning given in Paras 4 and 6 of the orders. Consequently, remission of the case to the Settlement Commission was not called for in the cases of these 25 assessees who have preferred the intra-court appeals against the decision rendered by the Single Bench. 5. Mr. Ranka, Senior Advocate appearing on behalf of assessee has submitted that the Settlement Commission does not become functus officio and the case can be remitted for which he has placed reliance upon the decision of the Apex Court in Guduthur Bros. v. ITO [1960] 40 ITR 298 and decision of Delhi High Court in Vatika Farms (P.) Ltd. v. Union of India [2008] 302 ITR 98/169 Taxman 366 and decision in Star Television News Ltd.'s case (supra). It was also submitted that the revenue has preferred writ applications before the Single Bench as afterthought. It was submitted by some of the learned counsel that after the tax was demanded by revenue as determined by the Set....
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....) or sub-section (3) or under the provisions of sub-section (1) as it stood immediately before their amendment by the Finance Act, 2007 with effect from 1-6-2007 and giving of opportunity of hearing is necessary that may be either in person or through a representative duly authorized in this behalf and after examining such further evidence as may be placed before it or obtained by it, the Settlement Commission may pass order in accordance with the provisions of the Act. Thus, it is necessary to examine the record, hear the parties and record the evidence as may be adduced. The Settlement Commission has observed that it was not practicable to hear the parties, examine the record and investigate the case for proper settlement. Even adequate opportunity of hearing as laid down under section 245D was not practicable and the orders were passed to meet directions issued by the High Court as an eye wash. It was incumbent upon the Settlement Commission to examine the record, investigate the case and record the evidence, as may be addued, for proper settlement and thereafter, pass appropriate order in accordance with the provisions of the Act, after giving opportunity of hearing to the asse....
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.... Vishram & Co. [2010] 321 ITR (St.) 167 whereby the Bombay High Court issued rule in the writ petitions pending further orders, directed the Settlement Commission not to dismiss the applications. In the instant cases there is no question of abatement, as orders were passed before the said date, even if, applications had not been decided. In these cases, there was decision which was not in accordance with law and was nullity being in flagrant violation of the principle of audi alteram partem and due opportunity envisaged under section 245D(4) of the Act. In Star Television News Ltd.'s case (supra) the High Court of Bombay has opined with respect to cut off date for Settlement Commission to complete the proceedings as arbitrary require to be read down so that proceedings treated as abated only where failure to decide in time limit owing to reasons attributable to applicant and if the reasons are not attributable to the assessee there was no abatement. 11. Mr. Ranka, Senior Advocate has also relied upon the decision in CIT v. National Taj Traders [1980] 121 ITR 535/[1979] 2 Taxman 546 in which the Apex Court has laid down that limitation of two years for passing of the orders does ....
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....s case, we do not think an order made in pursuance of such a direction would be subject to the limitations prescribed under section 132(5). Once the order has been made within ninety days the aggrieved person has got the right to approach the notified authority under section 132(11) within thirty days and that authority can direct the Income-tax Officer to pass a fresh order. We cannot accept the contention on behalf of the respondents that even such a fresh order should be passed within ninety days. It would make the sub- sections (11) and (12) of section 132 ridiculous and useless.' It may be pointed out that in section 132 there is no provision removing or relaxing the bar of limitation contained in section 132(5) enabling the Income-tax Officer to pass an order afresh pursuant to any direction issued to him by a higher authority under section 132(12) and even then this Court took the view that the limitation prescribed under section 132(5) will be applicable only to the initial order to be made by the Income-tax Officer and not to an order that would be made by him pursuant to a direction from the Board or notified authority. The concerned provisions were read together and s....
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....view. But the question is as to at what stage an authority becomes functus officio in regard to an order made by him. P. Ramanatha Aiyar's Advanced Law Lexicon gives following illustrative definition of the term functus officio : "Thus a Judge, when he has decided a question brought before him, is functus officio, and cannot review his own decision." In instant matters, question is totally different. Question is not that of the review. It is settled proposition of law that unless the relevant statute or rules permit such review, it cannot be made. It is not the review, which has been done in these cases. Case has been remitted by the Single Bench. Thus, the cases relate back to the stage when there was violation of provisions of section 245D(4) of the Act. The decision relied upon in State Bank of India's case (supra) has no application. Reliance upon the decision in Rajasthan State Road Transport Corpn.'s case (supra) is equally futile in which question was of jurisdiction of the Civil Court and Labour Court and what relief could be given by the Civil Court with respect to dispute under Industrial Disputes Act. Decision has no application at all. The decision has altogether ....
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....pecial leave. The Apex Court has laid down that the appellant was not precluded from continuing the appeal. Thus, decision otherwise also is against the submission raised by learned counsel and is of no help to the assessee. 15. Coming to the submission raised by Mr. J.K. Singhi, Sr. Standing Counsel for Income-tax Department with respect to direction to the Single Bench to make refund along with interest at the rate of 15 per cent, in case, it becomes necessary. Refund has not been ordered, at this stage and liability is to be determined afresh after hearing learned counsel for the parties. Thus, it cannot be said, at this stage, whether refund would be necessary at all or some more amount of tax liability is to be fastened, in our considered opinion, at this stage, it was not appropriate for the Single Bench to quantify the rate of interest a refund has to carry, in case so ordered in future. How much interest tax refund has to carry would arise only when it is necessitated on determination. At that time, question has to be considered whether the rate of interest applicable on refund as per section 245D(6A) at the rate of 15 per cent which the assessees are required to pay, in....
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....here is statement that additional amount has been paid. However, it is apparent from Para 5 of the order that Settlement Commission has observed that it was not practicable to examine the records which was mandatory to investigate the case meaning thereby, to record the evidence necessary for proper settlement. At the same time, it has also been observed that giving opportunity of hearing to the applicant, assessees and the revenue as envisaged under section 245D(4) was not practicable for the Settlement Commission. In fact, no due opportunity was given, hence reasoning, if any, mentioned would not make order legal and valid. Question is that of legality of the action taken in flagrant violation of the provisions under section 245D(4) of the Act as it is not disputed that opportunity of hearing was not afforded. There was no time to give serious look to the record and much less to record the evidence. No enquiry was made. Thus, in our considered opinion, there is flagrant violation of the provisions of section 245D(4) of the Act. The orders so passed are rendered nullity and liable to be set aside. Merely by mentioning of certain material without actively assessing what were the st....
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....t with the mandatory provisions of the Act like the quantum and payment of tax and interest. The object of the Legislature in introducing section 254C is to see that protracted proceedings before the authorities or in courts are avoided by resorting to settlement of cases. In this process an assessee cannot expect any reduction in amounts statutorily payable under the Act. Reliance has also been placed upon the decision of the High Court of Bombay in Star Television News Ltd.'s case (supra) in which Wanchoo Committee's recommendations have been quoted in Para 2.33 in which it has been observed that settlement is fair, prompt and independent. Suggestion was made that there should be a high level machinery in administrating the provisions. In our opinion, there is no doubt about it that the Settlement Commission has been established with the aforesaid objectives. At the same time as observed by the Apex Court in Om Prakash Mittal's case (supra) the Commission was bound to comply with the provisions of statute. No doubt about it that there should not be protraction of the settlement proceedings but at the same time the mandatory provisions are also required to be complied with. Merely....