1997 (5) TMI 394 - Commission - Income Tax

Summary

Issues Involved:
1. Jurisdiction under section 245E
2. Annulment of actions taken subsequent to the furnishing of the settlement application
3. Just and proper course of action regarding the request for invoking section 245E

Issue-wise Detailed Analysis:

I. Jurisdiction under section 245E:
The primary question was whether the conditions specified for invoking the jurisdiction under section 245E should be considered with reference to the factual position as on the date of the settlement application or at the time of deciding the appropriateness of invoking section 245E. The Commission concluded that the provisions of section 245E could be invoked at any time after an application under section 245C(1) is allowed to be proceeded with under section 245D(1). The status of completed assessments to be reopened must be seen at the time when the power under section 245E is sought to be exercised.

II. Annulment of actions taken subsequent to the furnishing of the settlement application:
The second issue addressed whether actions taken subsequent to the furnishing of the settlement application could be annulled, particularly in the context of the Supreme Court's observations in Express Newspapers' case. The Commission concluded that it is necessary to obtain the position of pendency of proceedings as at the time of filing the application under section 245C. Unless the Commission has reopened the proceedings under section 245E, the income-tax authorities are at liberty to reopen the assessments or make regular assessments. Since the assessments/reassessments in this case were made validly, even though subsequent to the furnishing of the settlement application, they cannot be annulled.

III. Just and proper course of action regarding the request for invoking section 245E:
The third issue considered the appropriate course of action regarding the request for invoking section 245E for the assessment years 1981-82, 1982-83, 1983-84, 1985-86, 1988-89, 1989-90, and 1990-91. The Commission found that the request for invoking section 245E could not be considered because for the assessment year 1990-91, the proceedings had not been completed as on the date of application, and for the other years, they were reopened under section 147 before the exercise of power under section 245E by the Commission. However, the Bench passing the order under section 245D(4) may make observations as they consider proper in light of the findings regarding the rival claims of the applicant and the Department.

Conclusion:
The application will now go back to the Additional Bench of the Settlement Commission, Mumbai, for suitable orders in accordance with the principles set out above, in the facts and circumstances of the case while making orders of settlement under sub-section (4) read with sub-section (6) of section 245D of the Act.