2017 (3) TMI 1918 - HC - Income Tax

Validity of Settlement Commission orders u/s 245 D (4) - as admitted by Settlement Commission that it is not in a position to pass any appropriate order for proper settlement - HELD THAT - Since Settlement Commission has passed order u/s 245 (D) (4A) without any proper settlement observing that it is not practicably possible to examine records and investigate the case, it cannot be said that there is a valid order passed by Settlement Commission and, therefore, matter could have been sent to Commission to pass fresh order in accordance with law, but since order itself is not under challenge, reliefs prayed in this petition, which relates only to assessment, cannot be granted.

Summary

Issues:
1. Validity of notice issued by Opp. Party no. 3 based on seized material during search.
2. Settlement Commission's authority to direct Assessing Authority for fresh assessment/re-assessment.
3. Challenge to Settlement Commission's order under Section 245(D)(4A) for lack of proper settlement.

Analysis:
1. The petitioners sought writs to quash a notice dated 16.5.2008 and prevent any further action by Opp. Party no. 3, citing settlement by Settlement Commission under Section 245D(4) of the Act. The Settlement Commission's order did not provide a specific settlement and admitted practical difficulties in examining records for proper settlement.

2. The Settlement Commission's order mentioned the impracticability of examining records for proper settlement due to the volume and complexity of cases. Despite the Commission's direction for assessment or re-assessment by Assessing Authorities, the lack of a proper settlement rendered the order legally unsustainable. The petitioners' reliance on a previous judgment was deemed inapplicable due to the unique circumstances of the present case.

3. The court noted that the Settlement Commission's order under Section 245(D)(4A) lacked a proper settlement and practical feasibility for examination, making it invalid. While the court acknowledged the option to send the matter back to the Commission for a fresh order, the absence of a challenge against the Commission's order precluded granting the relief sought in the petition related to assessment matters.

In conclusion, the court dismissed the petition due to the lack of a valid order from the Settlement Commission and the absence of a challenge against the Commission's decision. The judgment highlighted the importance of a proper settlement by the Commission for legal validity and the limitations when faced with practical difficulties in examining records.