2016 (8) TMI 564 - HC - Income Tax

Reopening of assessment - Power of settlement commission - Held that - The Settlement Commission passed final orders as early as 19.06.1998 and thus, by applying the decision of the Hon ble Supreme Court in Brij Lal 2010 (10) TMI 8 - SUPREME COURT , the order of Settlement Commission has to be taken as final and conclusive and when there is no allegation of fraud or misrepresentation, the question of reopening or revising the order, that too in the manner done in the impugned orders cannot be sustained.

Summary

Issues:
Challenge to the Settlement Commission's order revising previous final orders based on jurisdiction and authority.

Analysis:
In this case, the petitioner sought to quash the Settlement Commission's order revising its final order and a subsequent order, arguing lack of jurisdiction for such revision. The court considered the power of the Settlement Commission to rectify its order, citing a previous case where the court allowed a writ petition challenging a similar action by the Commission. The court highlighted that the statute did not provide for a power of review for the Commission, and any rectification could only be done for a mistake apparent from the record. The court emphasized that subsequent legal developments could not be a ground for review, especially when there was no allegation of fraud or misrepresentation. Consequently, the court allowed the writ petition, setting aside the impugned orders but clarified that the original order of the Settlement Commission would stand final, and the department could demand interest as per that order.

The court also referred to a case where the Andhra Pradesh High Court held that the Commission could not rectify its earlier order under Section 245D of the Income Tax Act. The court emphasized that rectification could not be based on subsequent legal decisions and that errors not affecting the Commission's jurisdiction should be challenged through a writ of certiorari. The court made it clear that subsequent legal developments could not be a ground for exercising review jurisdiction and that the Department should not be non-suited based on such grounds. The court ultimately quashed the impugned orders and reaffirmed the finality of the original order of the Settlement Commission.