THE INCOME-TAX SETTLEMENT COMMISSION
(PROCEDURE) RULES, 1997
(Notification
No. GSR 361(E), dated 4th July, 1997)
In exercise of the powers conferred by sub-section (7) of section 245F of
the Income-tax Act, 1961 (43 of 1961), and in supersession of the Income-tax
Settlement Commission (Procedure) Rules, 1987, except as respects things done
or omitted to be done before such supersession, the Income-tax Settlement
Commission hereby makes the following rules, namely:—
1. Short
title and commencement:-
(1) These rules
may be called the Income-tax Settlement Commission (Procedure) Rules, 1997.
(2) These shall
come into force on the date of their publication in the Official Gazette.
2. Definitions:-
In these rules, unless the
context otherwise requires,:-
(i) "Act" means the Income-tax Act,
1961 (43 of 1961);
(ii) "Annexure"
means the annexure to the application in Form No. 34B, set out in Appendix II
to the Income-tax Rules, 1962;
(iii) "Applicant"
means a person who makes an application to the Commission under sub-section (1)
of section 245C to have a case relating to him settled;
(iv) "Authorized
representative" means,—
(a) in
relation to an applicant, except where such applicant is required under any of
the provisions of Chapter XIX-A of the Act to attend in person, a person who
would be entitled to represent him before any income-tax authority or the
Appellate Tribunal under
(b) in
relation to a Commissioner, a person,—
(i) Authorized
in writing by the Commissioner or the Chief Commissioner, or
(ii) duly appointed by the Central Government as
authorized representative or duly authorized by the Central Board of Direct
Taxes to appear, plead and act for the Commissioner in any proceeding before
the Commission;
(v) "Commission" means the Income-tax
Settlement Commission constituted under sub-section (1) of section 245B and
includes, where the context so requires, any Bench exercising or discharging
the powers or functions of the Commission;
(vi) "officer of the Commission" means
Secretary, Director of Income-tax (Investigation), Additional Director of
Income-tax (Investigation)ss and Deputy Director of
Income-tax (Investigation);
(vii) "Secretary" means the Secretary of
the Commission and includes an Administrative Officer;
(viii) "section" means a section of the
Act;
(ix) "settlement application" means an
application made by a person to the Commission under sub-section (1) of section
245C to have a case relating to him settled;
(x) all other words and expressions used in
these rules and not defined but defined in the Act, shall have the same meaning
respectively assigned to them in the Act.
3. Language of the Commission:-
(1) All
pleadings before the Commission may, at the option of the applicant, be in
Hindi or in English.
(2) All orders
and other proceedings of the Commission may, at the option of the Commission,
be in Hindi or in English.
(1) Any
requisition, direction, letter, authorization, order or written notice to be
issued by the Commission shall be signed by the Chairman or a Vice-Chairman or
any other Member of the Commission or by the Secretary (or by any other officer
of the Commission).
(2) Nothing in
sub-rule (1) shall apply to any requisition or direction which the Commission
may, in the course of the hearing, issue to an applicant or a Commissioner or
an authorized representative personally.
5. Procedure for filing settlement
application:-
(1) A
settlement application shall be presented in Form No. 34B set out in Appendix
II to the Income-tax Rules, 1962, by the applicant in person or by his agent,
to the Secretary at the headquarters of the Commission at New Delhi or of the
Bench within whose jurisdiction his case falls or to any officer authorized in
this behalf by the Secretary, or shall be sent by registered post addressed to
the Secretary, or to such officer.
(2) A settlement application sent by post under
sub-rule (1) shall be deemed to have been presented to the Secretary or the
officer authorized by the Secretary on the day on which it is received in the
office of the Commission.
6. Commissioner's report, etc., under section 245D(1):-
On receipt of a settlement application, a copy of the said application
(excluding the Annexure) shall be forwarded by the Commission to the
Commissioner with the direction to furnish his report under sub-section (1) of
section 245D within 45 days of the receipt of the said copy of the application
by him.
7. Preparation of paper books, etc:-
(1) If the
applicant or the Commissioner, as the case may be, proposes to refer or rely
upon any documents or statements or other papers, he may submit six copies of a
paper book containing such papers duly indexed and paged at least two weeks
before the date of hearing under sub-section (1) of section 245D of the Act:
Provided,
however, that the Commission may in an appropriate case condone the delay and
admit the paper book.
(2) If the
applicant proposes to refer to or rely upon any documents or statements or
other papers, during The course of hearing under sub-section (4) of section
245D of the Act, he may submit six copies of a paper book containing such
papers duly indexed and paged, within thirty days or within such extended
period as may be allowed by the Commission, of the receipt of an order under
sub-section (1) of section 245D.
(3) If the
Commissioner proposes to refer to or rely upon any documents or statements or
other papers during the course of hearing under sub-section (4) of section 245D
of the Act, he may submit six copies of a paper book containing such papers
duly indexed and paged along with his report referred to in rule 9.
(4) The
Commission may, suo motu,
direct the preparation of six copies of a paper book by and at the cost of the
applicant or the Commissioner, as the case may be, containing copies of such
statements, documents and papers, etc., as it may consider necessary for the
proper disposal of the settlement application or matters arising there from.
(5) The papers
referred to in sub-rules (1), (2), (3) and (4) must be legibly written or typewritten
in double space or printed. If a xerox copy of the
document is filed, then the same should be legible. Each paper in such a manner as to give a brief
description of the documents, with page numbers and the authority before whom
it was filed.
Where a fact, which is not borne out by or is contrary to the record
relating to the case, is alleged in the settlement application (including the
Annexure and the statement or other documents accompanying such Annexure), it
shall be stated clearly and concisely and supported by a duly sworn affidavit.
[9. Commissioner's
further report:-
Where an order is passed by the Commission under sub-section (1) of section
245D allowing the settlement application to be proceeded with, a copy of the
annexure to the said application together with a copy of each of the statements
and other documents accompanying such annexure, shall be forwarded to the
Commissioner along with a copy of the said order with the direction that the
Commissioner shall furnish a further report within ninety days of the receipt
of the said annexure (including the statements and other documents accompanying
it) or within such further period as the Commission may specify.
If the Commissioner fails to furnish his report on or before the expiry of
the specified period of 90 days or such extended period, the Commission may
pass the appropriate order without such report.]
10. Date and place of hearing of application
to be notified:-
On receipt of the Commissioner's further report, if any, referred to in
rule 9, the Commission shall notify to the applicant and the Commissioner the
date and place of hearing of the application.
A Bench shall hold its sittings at its headquarters. The Bench may,
however, at the discretion of the Presiding Officer, hold its sittings at ny place in its jurisdiction notified by the Commission.
A Bench shall dispose of such settlement applications or matters arising therefrom as the Chairman may by general or special order
direct.
13. Constitution of Special Bench:-
(1) The
Chairman may, for the disposal of any particular case, constitute a Special
Bench consisting of at least five Members drawn from all the Benches of the
Commission.
(2) The Special
Bench shall be presided over by the Chairman or a Vice-Chairman.
(3) If the
Members of the Special Bench are equally divided, they shall state the point or
points on which they differ and make a reference to the Chairman who shall
refer the case for hearing on such point or points by one or more of other
Members of the Settlement Commission and such point or points shall be decided
according to the opinion of the majority of the Members of the Settlement
Commission who have heard the case.
(4) Notwithstanding
anything contained in the foregoing provisions of this rule, if one or more
persons constituting the Special Bench (whether such person is the Presiding
Officer or any other Member of the Special Bench) are unable to function in the
Special Bench owing to illness or any other cause or in the event of occurrence
of a vacancy either in the office of the Presiding Officer or in the office of
one or other Members of the Special Bench, the remaining Members, if more than
three, may function as the Special Bench, and the senior most of the remaining
Members shall act as the Presiding Officer of the Special Bench.
An authorized representative appearing for the applicant at the hearing of
an application shall file before the commencement of the hearing a document
authorizing him to appear for the applicant and if he is a relative of the
applicant, the document shall state the nature of his relationship with the
applicant, or if he is a person regularly employed by the applicant, the capacity
in which he is at the time employed.
15. Verification
of additional facts:-
Where in the course of any proceedings before the Commission any facts not
contained in the settlement application (including the Annexure and the
statements and other documents accompanying such Annexure) are sought to be
relied upon, they shall be submitted to the Commission in writing and shall be
verified in the same manner as provided for in the settlement application.
16. Proceedings not open to the public:-
The proceedings before the Commission shall not be open to the public and
no person (other than the applicant, his employee, the concerned officers of
the Commission or the Income-tax Department or the authorized representatives)
shall, without the permission of the Commission, remain present during such
proceedings.
17. Publication of orders of the Special
Bench:-
The Chairman may, at his discretion, direct the publication of orders or
portions containing the rulings of the Special Bench with such modifications as
to names and other particulars therein, as he may deem fit.
The Commission may, on such terms as it thinks fit and at any stage of the
proceedings, adjourn the hearing of the application on any matters arising
there from.
19. Special provisions in respect of settlement
applications made before 1st day of October, 1984:-
(1) Where, in
respect of a settlement application made before the 1st day of October, 1984,
an order is passed by the Commission under sub-section (1) of section 245D of
the Act allowing the application to be proceeded with, a notice shall be issued
by the Commission to the applicant requiring him to furnish in quintuplicate:—
(a) a
full and true statement of facts regarding the matters to be settled (including
the manner in which any income disclosed or proposed to be disclosed by the
applicant has been derived); and where the settlement involves determination of
income, accompanied with Annexure containing:—
(i) computation of total income of the
applicant for the assessment year or years to which the settlement application
relates, in accordance with the provisions of the Act;
(ii) copies of manufacturing account or trading
account or both, as the case may be, profit and loss account or income and
expenditure account or any other similar account, as the case may be, and
balance sheet; and
(iii) in the case of:—
(a) a proprietary business or profession, copy
of the personal account of the proprietor;
(b) a firm or association of persons or body
of individuals, copies of the personal accounts of the partners or members
thereof, as the case may be; and
(c) a partner of a firm or a member of an
association of persons or body of individuals, copies of the personal account
of such partner or member in the firm or association of persons or body of
individuals, as the case may be;
(b) the terms of
settlement sought for by the applicant.
(2) The
statement of facts, the Annexure thereto and the terms of settlement shall each
be signed separately by the applicant and the statement of facts shall be
verified in the following manner, namely:—
I
............................................................................,
son/daughter/wife of
(Name in full and in block letters)
............................................................................
solemnly declare that to the best of my knowledge and belief, the information
given in this statement of facts and the Annexures
accompanying it is correct and complete and other particulars shown therein are
truly stated. I further declare that I am making this statement in my capacity
as ..........................
(designation)
and that I am
competent to make this statement of facts and to verify it.
Place:
..........................
Date:
..........................
..........................
Signature
(3) Where a
fact which cannot be borne out by or is contrary to the record relating to the
case is alleged in the statement of
facts furnished under sub-rule (1), it shall be stated clearly and concisely
and supported by a duly sworn affidavit.
(4) On receipt
of the statement of facts and the terms of settlement under sub-rule (1), the
Commission shall forward a copy thereof to the Commissioner calling for his
further report.