TaxTMI 
TaxTMI 
2016 (1) TMI 137
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....ssment Year 2013-14, the Settlement Commission passed its first order dated 28.01.2015 under Section 245D(1) of the Act and allowed the application to proceed further with. 1.1 The Settlement Commission thereafter passed another order dated 23.03.2015 under Section 245D(2C) of the Act and allowed the said application to proceed further from that stage. These orders the Income Tax Department has challenged on various grounds. 2. The case of the Department is that both the orders of the Settlement Commission suffer from material irregularities. Application for settlement was irregular and that therefore, ought not to have been proceeded further beyond the stage of Section 245D(1) of the Act. In any case, assessee had not made true discl....
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....ttlement Commission under Section 245D(2C) of the Act, it was observed that such order is not final and is subject to the final orders that may be passed by the Settlement Commission under Section 245D(4) of the Act. 4. Insofar as the order of the Settlement Commission under Section 245D(1) of the Act on 28.01.2015 is concerned, the same poses no serious consideration. Under sub-section (1) of Section 245C of the Act, an assessee is allowed to make an application for settlement in prescribed formate which would contain full and true disclosure of his income which has not been disclosed before the Assessing Officer and the manner in which such income has been derived. Sub-section (1) of Section 245D of the Act provides that on receipt of ....
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.... open for the Settlement Commission to examine the fulfillment thereof at several stages of the settlement proceedings. If therefore, while at the threshold, considering the question whether such application should be allowed to be proceeded with or be rejected, the Commission examined such questions on the basis of disclosure made by the applicants and the supporting material produced along with the applications, we do not see that the Commission committed any legal error. As already noted, it was well within the jurisdiction of the Commission at the stage of sub-section(1) of section 245D of the Act to examine whether application for settlement fulfills the statutory requirements contained in subsection( 1) of section 245C of the Act. At ....
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....before the final order providing for the terms of settlement is passed by the Settlement Commission. The first stage is under Section 245D(1). This is followed by the next step under Section 245D(2C) and finally by the order passed under Section 245D(4). In the present case, the final order under Section 245D(4) is yet to be passed. The orders under Section 245D(1) and 245D(2C) are not final orders and they are subject to the final orders that may be passed under Section 245D(4). It is, therefore, clear that the issue of full and true disclosure on the part of the applicants and the manner in which the undisclosed income was derived is still open for discussion and debate and the Settlement Commission would have to give its final decision o....
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.... the situation in the present case. We record the contention of the Counsel for the assessee that despite the orders being passed by the Settlement Commission under sub-section (1) of Section 245D and Section 245D(2C) of the Act, the question of fulfillment of all material requirements of a valid application for settlement would be still open for the Commission to examine before further inquiry under sub-section (3) of Section 245D and passing final order under sub-section (4) of Section 245D In fact, the Commission also in the order dated 23.03.2015 made following observations:- "We appreciate that some of the issues raised by the department in the report u/s 245D(2B) may call for necessary enquiry and investigation u/s 245D(3) of....