2005 (8) TMI 55 - HC - Income Tax

Settlement of Cases - writ petition is directed against the order passed by the Settlement Commission functioning under Chapter XIX-A - impugned order is according to the petitioner not proper or one which virtually seeks to assume jurisdiction by the Commission when it could not have done so under the statutory provisions particularly under section 245C(1) of the Act and therefore the need for the petitioner to test the correctness or otherwise of such an order as an order involving interpretation of the provisions of section 245C(1) - writ petition is disposed of observing that notwithstanding the impugned order it is open to the parties to urge all their contentions before the Commission at the stage of disposal of the application itself

Summary

Issues:
Challenge to order of Settlement Commission under Chapter XIX-A of the Income-tax Act, 1961 regarding jurisdiction and interpretation of section 245C(1).

Analysis:
The writ petition challenges an order passed by the Settlement Commission under Chapter XIX-A of the Income-tax Act, 1961, at an intermediate stage. The petitioner contests the order, claiming it overstepped jurisdiction by interpreting section 245C(1) of the Act. The dispute arises from a scheduled bank's application for settlement of assessment years 1994-95 to 1999-2000 before the Commission. The Revenue objected to the bank's eligibility under section 245C, leading to the current writ petition.

The petitioner argues that the Commission wrongly entertained the application despite the bank's alleged disqualification. Legislative history shows that objections like these were previously allowed but are now omitted, allowing the Commission to proceed with the application for a merit-based decision. The petitioner seeks to challenge the Commission's decision, leading to the current legal proceedings.

The court clarifies that the Commissioner can still present all aspects of the case before the Commission for a comprehensive review, even if preliminary objections are rejected. The objective of Chapter XIX-A is to expedite settlements and reduce litigation duration. The court refrains from interpreting section 245C at this stage, emphasizing the need to let the Commission independently assess and settle the matter without being hindered by court interpretations. The writ petition is disposed of, allowing both parties to present their arguments before the Commission for a fair and thorough consideration in accordance with the Act.