Provisions of Chapter XIX-A of the Income-tax Act/Chapter V-A of the Wealth Tax Act. - Income Tax - 1281/CBDT

INSTRUCTION NO. 1281/CBDT Dated : September 27, 1979 Section(s) Referred: 245D of Income Tax Act , 22D of Wealth Tax Act Statute: Wealth Tax Act, 1957 The Board's views on some of the points referred to them regarding the provisions of Chapter XIX-A of the Income-tax Act/Chapter V-A of the Wealth Tax Act which are of general interest are as follows:- (i) Whether having regard to the provisions of sub-sections (4) and (6) of Section 245D/22D, a stipulation regarding the securities that assessee should furnish for payment of its dues as determined by the Settlement Commission can be incorporated in the order passed by the Commission ? Section 245-D (6)/22-D(6) provides inter-alia, that every order passed by the Settlement Commission shall provide for the terms of the settlement including any demand by way of tax, penalty or interest, the manner in which any sum due under the settlement shall be paid and all other matters to make the settlement effective. It is, therefore, open to the Settlement Commission to provide for the securities that the assessee should furnish for the payment of its dues as it only indicates the manner in which the sum shall be paid and the safeguards to be taken there for. Provision in the order regarding furnishing of security could be treated as the manner in which the sum should be paid so as to make the Settlement Commission's order effective. (ii) Whether following the Settlement Commission's order under Section 245-D (4)/22D(4) determining the assessee's income/wealth and the taxes payable thereon, it is incumbent on the part of the ITO/WTO to issue a formal notice of demand under Section 156/30 ? The answer is in the affirmative. A notice of demand under Section 156/30 has to be issued by the I.T.O./WTO as Section 220/31 of the Act (which lays down when an assessee is deemed to be in default), refers to the notice of demand issued under Section 156/30 and the non-payment of the amount within the time limits specified in sub-section (1) thereof. If the amount is not paid in terms of the notice of demand, the assessee is deemed to be in default and the I.T.O./W.T.O. would be justified in issuing a certificate to the Tax Recovery Officer under Section 222 of the Income-tax Act,. In this connection,. reference may be had to Section 245I/221 of the Act which provides for the finality of an order of Settlement passed by the Commission. When an order made by the Settlement Commission is received by the I.T.O./W.T.O. he has to issue a demand notice under Section 156/30 in terms of the said order and if the sum due is not paid, then to enforce recovery proceedings. (iii) Whether having regard to the definition of the term "case"., an application under Section 245C/22C can be made covering pending assessment proceedings for more than one assessment year and whether under the Second proviso to Section 245D(1)/22D(1) it is open to the Commissioner to object to the application being proceeded with for all or some of the assessment years depending upon for what assessment years the concealment of particulars of income or perpetration of fraud etc., can be said to have been established or likely to be established by an income-tax/wealth tax authority in relation to the case ? If an application covering a number of assessment years is filed with the Settlement Commission and the Commissioner objects only in respect of some of the assessment years, then it would be open to the Commission to proceed with reference to the application for the other assessment years. It is so because the assessee could have filed separate applications in respect of separate assessment years and the fact that he has chosen to file one application covering number of assessment years would not make any difference in so far as the applications for the other assessment years are concerned, the proceedings of which is not objected to by the Commissioner. (iv) Whether having regard to the provisions of Section 138 of the Income-tax Act, 1961/Section 42B of the Wealth Tax Act, 1957 information regarding proceedings before the Settlement Commission in individual cases and the orders passed by the Commission in respect thereof can be disclosed ? Section 138(1)(b)/42B empowers the Commissioner to furnish or cause to be furnished the information asked for in respect of any assessment in public interest. If by the term 'assessment' it is understood as the computation of income/net wealth and tax payable thereon under the Act, the Settlement Commission's order in the finality computes the income net wealth and tax payable thereon by the assessee who made the application to the Commission. If so, there seems to be no objection for the Commissioner furnishing information in respect of the said computation of income/net wealth and tax payable thereon to any applicant if he is satisfied that it is in the public interest to do so.