Provisions u/s 245B of Income - Tax Act, 1961. - Income Tax - 1077/CBDT

INSTRUCTION NO. 1077 / CBDT Dated : July 16, 1977 Section(s) Referred: 245B Statute: Income - Tax Act, 1961 Sub-section (1) of section 245D of the Income-tax, Act, 1961 provides that on receipt of an application under section 245C, the Settlement Commission shall call for a report from the Commissioner, and on the basis of the materials contained in the Commissioner's report, and having regard to the nature and circumstances of the case, or the complexity of the investigation involved therein, the Commission may allow the application to be proceeded with or reject it. The second proviso to that sub-section provides further that the commission shall not proceed with the application if the commissioner objects to it on the ground that concealment of particulars of income on the part of the applicant or perpetration of fraud by him for evading any tax or other sum chargeable or imposable under the Act, has been established or is likely to be established by any income-tax authority in relation to the case. The question for consideration is whether the commissioner should give the applicant an opportunity of being heard in a case in which he proposes to object to the Settlement Commission's proceeding with an application. 2. Though the Act does not specifically require a hearing, the Board would advise the commissioners to offer such an opportunity to the applicant in every case in which they are inclined to object to the admission of the application by the Settlement Commission. If after the hearing, the commissioner is of the view that the admission of the application should be objected to, he should record his reasons for his objection, which need not, however, be communicated to the applicant. While intimating his objection to the settlement commission, the commissioner may mention that he has heard the applicant in this connection, but is not satisfied that the application is one with which the commission should proceed. 3. The same procedure may be followed on receipt of an application under section 22C of the Wealth-tax Act, 1957, if the application is to be objected to in terms of the second proviso to sub-section (1) of section 22D.