TaxTMI 
TaxTMI 
2020 (9) TMI 540
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....as allowed by the impugned order and aggrieved by the same, the Revenue is on appeal before us. 2.We have elaborately heard Ms.Hema Muralikrishnan, learned Senior Standing Counsel, assisted by Mr.Prabhu Mukunth Arunkumar, learned counsel for the appellant-Revenue; and Mr.P.S.Raman, learned Senior Counsel, assisted by Mr.R.Sivaraman, learned counsel appearing for the 1st respondent/writ petitioner. 3.The 1st respondent/writ petitioner is a Company incorporated under the Laws of Germany engaged in the design and construction of fossil - fired power plant as also supplying key components such as utility steam generators, environmental engineering equipments, turbines etc. During June, 2010, the National Thermal Power Corporation Limited (NTPC) invited bids under International Competitive Bidding from eligible bidders for supply and installation of 11*660MW steam generators at five places in India. The 1st respondent/writ petitioner is stated to have worked as sub-contractor to BGR Energy Systems Limited (BGRE), who have been selected by NTPC as a contractor for execution of the projects. The other finer details pertaining to the scope of the project may not be very relevant for ....
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....ated as 'invalid' under Section 245D(2C) of the Act. Challenging the said order dated 09.01.2019, the 1st respondent/writ petitioner filed the writ petition, which has been allowed by the impugned order. 5.Ms.Hema Muralikrishnan, learned Senior Standing Counsel appearing for the appellant-Revenue strenuously contended that the learned Writ Court ought to have noticed the distinction between Section 245D as it stood prior to 2007 and as it stands as on date. In terms of the unamended provision, the Settlement Commission was required to issue notice to the Commissioner regarding the application made by an assessee and thereafter, within one year, pass an order either to reject or allow the application. If the application was admitted, the relevant facts will be called for and if necessary, investigation will be ordered and final orders will be passed under Section 245D(4) of the Act. However, under the amended Section 245D, the decision of the Settlement Commission to allow the application to be proceeded with or rejected under Section 245D(1) is an order that is passed after hearing the applicant alone. On being satisfied that the application can be allowed to be proceede....
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.... by the Settlement Commission was not sustainable in law, as the 1st respondent in their application before the Commission had clearly disclosed as to what are the aspects, which need to be settled, which were in the following terms:- "2. Particulars of issues to be settled:- 2.1. Whether the Applicant is taxable in India on account of income earned from offshore supply of goods? 2.2. Determination of the total income of the Applicant for each of the AYs, being AY 2015-16 to 2018-19 as per the provisions of the Act. 2.3. Determination of the total tax liability of the Applicant for each of the four assessment years under consideration. 2.4. Any other issue that may be considered fit by the Hon'ble Settlement Commission in the interest of justice or to make the settlement effective." 10.To take a decision on the above issues, an adjudication process is required to be adopted and the application field by the 1st respondent/writ petitioner could not have been thrown out at the stage of 245D(2C) of the Act. Further, by referring to the factual details, it is submitted that there were no failure on the part of the 1st respondent/writ p....
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.... has been given to the 1st respondent/writ petitioner to make their submissions before the Commission before an order was passed under sub-Section (2C) of Section 245D and therefore, the learned Writ Court ought not to have interfered with the order and the order attempts to re-write Section 245D of the Act. 15.We do not agree with the said submission, as it is important to take note of the legislative intent and scope of power vested with the Settlement Commission under sub-Section (2C) and sub-Section (4) of Section 245D. For better appreciation, these two sub-Sections are quoted hereinbelow:- "Section 245D(2C):- Where a report of the [Principal Commissioner or] Commissioner called for under sub-section (2B) has been furnished within the period specified therein, the Settlement Commission may, on the basis of the report and within a period of fifteen days of the receipt of the report, by an order in writing, declare the application in question as invalid, and shall send the copy of such order to the applicant and the [Principal Commissioner or] Commissioner: Provided that an application shall not be declared invalid unless an opportunity has been ....
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....ing heard. 17.The plain reading of sub-Section (2C) of Section 245D of the Act does not spell out an adjudicatory process. Therefore, if in the opinion of the Commission, based upon the report the issue needs to adjudicated, the application cannot be declared as invalid. Therefore, each case, which comes before the Commission has to be decided on its own facts. 18.In several cases, where search and seizure operations are conducted, where contraband is involved, where there is fraudulent practice adopted, the assessees approach the Commission. Even in those cases, if the Commission allows an application to be proceeded with under Section 245D(1), yet upon receipt of the report, the application can be declared invalid under sub-Section (2C) of Section 245D. In fact, the decision in Abdul Rahim (supra) is one such case. 19.We have referred to the four issues, which the applicant wanted to be settled by the Commission, which have been stated above and, the first among the four issues is with regard to the income earned from offshore supply of goods. The Commission was largely guided by the report of the CIT, who reported that the composite contract of offshore and onshore serv....
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....horized Representative and after hearing them and after examining such further evidence as may be placed before it or obtained by it, the Settlement Commission, may, in accordance with the provisions of the Act, pass such order as it deems fit. Therefore, the scope of enquiry is not confined to the statements made in the application, the response filed by the applicant to the report of the CIT, but also the submissions made during the personal hearing and any further evidence as may be placed before it by the applicant or obtained by the Settlement Commission in exercise of its power and then proceed to pass orders as it deems fit. Therefore, the procedure at the (2C) stage is undoubtedly summary in nature and the application filed by the 1st respondent/writ petitioner could not have been declared as invalid at the said stage, as the issue requires adjudication, which can be done only when the application is decided under Section 245D(4) of the Act. 22.The decision relied on by the Revenue in the case of Mr.Hassan Ali Khan (supra) would, in fact, support the conclusion, which we have arrived at in the preceding paragraph. It has been held that the Settlement Commission can treat....