TaxTMI 
TaxTMI 
1989 (1) TMI 4
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....ment Commission is now beyond the pale of controversy in view of the decision of this court in CIT v. B. N. Bhattachargee [1979] 118 ITR 461. The appellant had applied to the Settlement Commission for settlement of its assessment for the assessment years 1948-49 to 1975-76 under the Income-tax Act, 1961 (hereinafter referred to as "the Act"). That application had to be proceeded with in accordance with section 245C of the Act which is as follows : "245C. (1) An assessee may, at any stage of a case relating to him, make an application in such form and in such manner and containing such particulars as may be prescribed to the Settlement Commission to have the case settled and any such application shall be disposed of in the manner hereinaf....
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....1948-49 to 1959-60. The appellant, on September 20, 1977, applied to the Commission to recall its earlier order dated August 24, 1977, since the same had been made without furnishing any opportunity of hearing to the appellant. Section 245D(1) provides as follows : "245D. Procedure on receipt of an application under section 245C.-(1) On receipt of an application under section 245C, the Settlement Commission shall call for a report from the Commissioner and on the basis of the materials contained in such report and having regard to the nature and circumstances of the case or the complexity of the investigation involved therein, the Settlement Commission may, by order, allow the application to be proceeded with or reject the application : ....
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.... 1979, and sub-section (1A) was inserted in section 245D which empowered the Settlement Commission to overrule the objection of the Commissioner. Sub-section (1A) of section 245D reads as follows : "Notwithstanding anything contained in sub-section (1), an application shall not be proceeded with under that sub-section if the Commissioner objects to the application being proceeded with on the ground that concealment of particulars of income on the part of the applicant or perpetration of fraud by him for evading any tax or other sum chargeable or imposable under the Indian Income-tax Act, 1922 (11 of 1922), or under this Act, has been established or is likely to be established by any income tax authority, in relation to the case : Prov....
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.... meantime, as mentioned hereinbefore, on April 1, 1979, the Finance Act, 1979, inserted sub-section (1A) to section 245D which empowered the Settlement Commission to overrule the objections of the Commissioner. On May 29, 1979, the appellant applied to the Settlement Commission to permit him to contest the objections of the Commissioner under the said proviso now inserted. The matter was taken up after a long gap in June, 1987, and it was heard on June 18, 1987, and July 1, 1987. The appellant contended that the order of August 24, 1977, should be recalled and the objections of the Commissioner dealt with in accordance with the amended provisions of section 245D(1A) and it also contended that if the Commissioner's objections were not to be ....
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....reign Compensation Commission [1969] 2 AC 147, the House of Lords in England has made it clear that breach of natural justice nullifies the order made in breach. If that is so, then the order made in violation of the principles of natural justice was of no value. If that is so, then the application made for the settlement under section 245C was still pending before the Commission when the amendment made to the Finance Act of 1979 came into effect and the said amendment being procedural, it would govern the pending proceedings and the Commission would have the power to overrule the objections of the Commissioner. Dr. V. Gauri Shankar, appearing for the Revenue, did not seriously contest that position. He accepted the position that the law, a....
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..... We are of the opinion that in view of the facts and circumstances of the case and in the context in which these objections had been made, it is necessary, as a concomitant of the fulfilment of natural justice, that the appellant should be heard on the objections made by the Commissioner. It is true that in the relevant orders for the years for which the Commissioner had objected, concealment had been upheld in the appeal before the appropriate authorities. But it may be that in spite of this concealment, it may be possible for the appellant to demonstrate or to submit that in disclosure of concealed income for a spread-over period, settlement of the entire period should be allowed and not bifurcated in the manner sought to be suggested by....