2023 (7) TMI 568 - HC - Income Tax

Income Tax Settlement Commission rejecting petitioner s application for rectification u/s 245D(6B) - Period of limitation - petitioner s case that the settlement recorded by the Commission on the consent of the parties is to be ignored because that did not reflect the correct position - case of Revenue that it had consistently opposed the application of respondent no. 1 for settlement in view of the alleged failure to make full and true disclosure of income - HELD THAT - Commission came to the conclusion that even if it excluded the time spent pursuing the writ petition from 10th February 2017 to 21st June 2018, still the rectification application had been filed beyond the six months period stipulated in Section 245D(6B) and was thus barred by limitation. We find no error in finding of the Commission. Thus whether the grievance raised by petitioner before the Commission and in the said Writ Petition that the consent as recorded was not given would qualify to be a mistake apparent from the record which is the only thing the Commission may rectify. Petition dismissed.

Summary

Issues involved:
The judgment involves the rejection of a rectification application under Section 245D(6B) of the Income Tax Act 1961 by the Income Tax Settlement Commission. The main issue revolves around the correctness of the consent recorded in the settlement order and the timeliness of the rectification application.

Issue 1: Consent in Settlement Order
The respondent's application before the Commission was allowed based on consent between the parties, leading to the settlement of the case. The Revenue challenged this settlement, alleging a failure to make full and true disclosure of income. The court relied on the principle that statements of fact recorded in a judgment are conclusive and cannot be contradicted, unless there is a clear error or injustice. The court held that the Revenue's remedy was to seek correction from the Commission if there was an incorrect recording of consent in the order.

Issue 2: Timeliness of Rectification Application
Following the court's decision, the petitioner filed a rectification application under Section 245D(6B) to correct the alleged incorrect recording of consent. However, the Commission dismissed the application as being filed beyond the six-month period stipulated in the Act. The Commission excluded the time spent pursuing a writ petition from the calculation of the limitation period, following the principles laid down by the Supreme Court in a similar context. The Commission found the rectification application to be time-barred and rejected it.

Conclusion:
The court upheld the Commission's decision, stating that the rectification application was indeed filed beyond the statutory limitation period. The court also expressed reservations about whether the petitioner's grievance regarding the consent recorded could be considered a "mistake apparent from the record" that the Commission could rectify. Ultimately, the petition was dismissed.