Settlement of cases
245A. In this
Chapter, unless the context otherwise requires,—
(a) “Bench” means a Bench of the Settlement
Commission;
(b) “case” means any
proceeding under this Act for the assessment or reassessment of any person in
respect of any year or years, or by way of appeal or revision in connection
with such assessment or reassessment, which may be pending before an income-tax
authority on the date on which an application under sub-section (1) of section
245C is made :
Provided
that where any appeal or application for revision has been preferred after the
expiry of the period specified for the filing of such appeal or application for
revision under this Act and which has not been admitted, such appeal or
revision shall not be deemed to be a proceeding pending within the meaning of
this clause;
(c) “Chairman” means the Chairman of the
Settlement Commission;
(d) “income-tax authority” means an
income-tax authority specified in section 116;
(e) “Member” means a Member of the
Settlement Commission, and includes the Chairman and a Vice-Chairman;
(f) “Settlement Commission” means the
Income-tax Settlement Commission constituted under section 245B;
(g) “Vice-Chairman” means a Vice-Chairman of
the Settlement Commission.]
Income-tax
Settlement Commission.
245B. (1) The
Central Government shall constitute a Commission to be called the Income-tax
Settlement Commission 8[R3] [* * *]
for the settlement of cases under this Chapter.
(2) The Settlement Commission shall consist of a Chairman 9[R4] [and as many Vice-Chairmen and other members
as the Central Government thinks fit] and shall function within the Department of
the Central Government dealing with direct taxes.
(3) The Chairman 11[R6] [, Vice-Chairman] and other members of the
Settlement Commission shall be appointed by the Central Government from
amongst persons of integrity and outstanding ability, having special knowledge
of, and, experience in, problems relating to direct taxes and business
accounts:
Provided that, where a member of the Board is appointed as the Chairman 11[R7] [, Vice-Chairman] or as a member of the
Settlement Commission, he shall cease to be a member of the Board.
13[R9] [Jurisdiction and powers of Settlement Commission.
245BA. (1) Subject to the other provisions of this
Chapter, the jurisdiction, powers and authority of the Settlement Commission
may be exercised by Benches thereof.
(2) Subject to the other provisions of this section, a Bench
shall be presided over by the Chairman or a Vice-Chairman and shall consist of
two other Members.
(3) The Bench for which the Chairman is the Presiding Officer
shall be the principal Bench and the other Benches shall be known as additional
Benches.
(4) Notwithstanding anything contained in sub-sections (1) and
(2), the Chairman may authorise the Vice-Chairman or other Member appointed to
one Bench to discharge also the functions of the Vice-Chairman or, as the case
may be, other Member of another Bench.
(5) Notwithstanding anything contained in the foregoing provisions
of this section, and subject to any rules that may be made in this behalf, when
one of the persons constituting a Bench (whether such person be the Presiding
Officer or other Member of the Bench) is unable to discharge his functions
owing to absence, illness or any other cause or in the event of the occurrence
of any vacancy either in the office of the Presiding Officer or in the office
of one or the other Members of the Bench, the remaining two persons may
function as the Bench and if the Presiding Officer of the Bench is not one of
the remaining two persons, the senior among the remaining persons shall act as
the Presiding Officer of the Bench :
Provided that if at any stage of the hearing of any such case or matter, it
appears to the Presiding Officer that the case or matter is of such a nature
that it ought to be heard of by a Bench consisting of three Members, the case
or matter may be referred by the Presiding Officer of such Bench to the
Chairman for transfer to such Bench as the Chairman may deem fit.
14[R10] [(5A) Notwithstanding
anything contained in the foregoing provisions of this section, the Chairman
may, for the disposal of any particular case, constitute a Special Bench
consisting of more than three Members.]
(6) Subject to the other provisions of this Chapter, the places
at which the principal Bench and the additional Benches shall ordinarily sit
shall be such as the Central Government may, by notification15[R11] in
the Official Gazette, specify 14[and the Special Bench shall sit at a place
to be fixed by the Chairman.]]
16[R12] [Vice-Chairman to act as Chairman or to discharge his functions in
certain circumstances.
245BB. (1) In
the event of the occurrence of any vacancy in the office of the Chairman by
reason of his death, resignation or otherwise, the Vice-Chairman or, as the
case may be, such one of the Vice-Chairmen as the Central Government may, by
notification in the Official Gazette, authorise in this behalf, shall act as
the Chairman until the date on which a new Chairman, appointed in accordance
with the provisions of this Chapter to fill such vacancy, enters upon his
office.
(2) When the Chairman is unable to discharge his functions owing
to absence, illness or any other cause, the Vice-Chairman or, as the case may
be, such one of the Vice-Chairmen as the Central Government may, by notification
in the Official Gazette, authorise in this behalf, shall discharge the
functions of the Chairman until the date on which the Chairman resumes his
duties.]
17[R13] [Power of Chairman to transfer cases from one Bench to another.
245BC. On
the application of the assessee or the 18[R14] [Chief
Commissioner or Commissioner] and after notice to them, and after hearing such
of them as he may desire to be heard, or on his own motion without such notice,
the Chairman may transfer any case pending before one Bench, for disposal, to
another Bench.]
19[R15] [Decision to be by majority.
245BD. If the Members
of a Bench differ in opinion on any point, the point shall be decided according
to the opinion of the majority, if there is a majority, but if the Members are
equally divided, they shall state the point or points on which they differ, and
make a reference to the Chairman who shall either hear the point or points
himself or refer the case for hearing on such point or points by one or more of
the 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, including those who first heard
it.]
Application
for settlement of cases.
20[R16] 245C. 21[R17] [(1) An assessee may, at any stage of a case
relating to him22[R18] ,
make an application in such form and in such manner as may be prescribed, and containing
a full and true disclosure of his income which has not been disclosed before
the 23[R19] [Assessing]
Officer, the manner in which such income has been derived, the additional
amount of income-tax payable on such
income and such other particulars as may be prescribed, to the Settlement
Commission to have the case settled and any such application shall be disposed
of in the manner hereinafter provided:
24[R20] [Provided
that no such application shall be made unless,—
(a) the assessee
has furnished the return of income which he is or was required to furnish under
any of the provisions of this Act; and
(b) the additional
amount of income-tax payable on the income disclosed in the application exceeds
25[R21] [one hundred] thousand rupees.]
(1A) For the purposes of sub-section (1) of this section and
sub-sections (2A) to (2D) of section 245D, the additional amount of income-tax
payable in respect of the income disclosed in an application made under
sub-section (1) of this section shall be the amount calculated in accordance
with the provisions of sub-sections (1B) to (1D).
26[R22] [(1B) Where the income disclosed in the
application relates to only one previous year,—
(i) if the
applicant has not furnished a return in respect of the total income of that
year (whether or not an assessment has been made in respect of the total income
of that year), then, except in a case covered by clause (iii), tax shall
be calculated on the income disclosed in the application as if such income were
the total income;
(ii) if the applicant
has furnished a return in respect of the total income of that year (whether or
not an assessment has been made in pursuance of such return), tax shall be
calculated on the aggregate of the total income returned and the income
disclosed in the application as if such aggregate were the total income;
(iii) if the proceeding pending before the
income-tax authority is in the nature of a proceeding for reassessment of the
applicant under section 147 or by way of appeal or revision in connection with
such reassessment, and the applicant has not furnished a return in respect of
the total income of that year in the course of such proceeding for
reassessment, tax shall be calculated on the aggregate of the total income as
assessed in the earlier proceeding for assessment under section 143 or section
144 or section 147 and the income disclosed in the application as if such aggregate were the total income.]
27[R23] [(1C) The additional amount of income-tax payable
in respect of the income disclosed in the application relating to the previous
year referred to in sub-section (1B) shall be,—
(a) in a case
referred to in clause (i) of that sub-section, the amount of tax
calculated under that clause;
(b) in a case referred to in clause (ii)
of that sub-section, the amount of tax calculated under that clause as reduced
by the amount of tax calculated on the total income returned for that year;
(c) in a case referred to in clause (iii)
of that sub-section, the amount of tax calculated under that clause as reduced
by the amount of tax calculated on the total income assessed in the earlier
proceeding for assessment under section 143 or section 144 or section 147.]
(1D) Where the income disclosed in the application relates to more
than one previous year, the additional amount of income-tax payable in respect
of the income disclosed for each of the years shall first be calculated in
accordance with the provisions of sub-sections (1B) and
(1C) and the aggregate of the amount so arrived at in respect of each
of the years for which the application has been made under sub-section (1)
shall be the additional amount of income-tax payable in respect of the income
disclosed in the application.
(2) Every application made under sub-section (1) shall be accompanied
by such fees as may be prescribed29[R25] .
(3) An application made under sub-section (1) shall not be allowed
to be withdrawn by the applicant.
Procedure on receipt of an application under section 245C.30[R26]
245D. (1) 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 such report and having regard to
the nature and circumstances of the case or the complexity of the investigation
involved therein, 31[R27] [the
Settlement Commission, shall, where it is possible, by order, reject the
application or allow the application to be proceeded with within a period of
one year from the end of the month in which such application was made under
section 245C] :
Provided that an application shall not be rejected under this sub-section unless
an opportunity has been given to the applicant of being heard
:
32[R28] [Provided
further that the Commissioner shall furnish the report within a period of
forty-five days of the receipt of communication from the Settlement Commission
in case of all applications made under section 245C on or after the 1st day of
July, 1995 and if the Commissioner fails to furnish the report within the said
period, the Settlement Commission may make the order without such report.]
(1A) 33[R29] [Omitted
by the Finance (No. 2) Act, 1991, w.e.f. 27-9-1991.]
(2) A copy of every order under sub-section (1) shall be sent to
the applicant and to the Commissioner.
34[R30] [(2A) Subject to the provisions of sub-section
(2B), the assessee shall, within thirty-five days of the receipt of a copy of
the order under sub-section (1) 35[R31] [allowing
the application to be proceeded with], pay the additional amount of income-tax
payable on the income disclosed in the application and shall furnish proof of
such payment to the Settlement Commission.]
35[R32] [(2B)
If the Settlement Commission is
satisfied, on an application made in this behalf by the assessee, that he is
unable for good and sufficient reasons to pay the additional amount of
income-tax referred to in sub-section (2A) within the time specified in that
sub-section, it may extend the time for payment of the amount which remains
unpaid or allow payment thereof by instalments if the assessee furnishes
adequate security for the payment thereof.]
36[R33] [(2C) Where the additional amount of income-tax
is not paid within the time specified under sub-section (2A), then, whether or
not the Settlement Commission has extended the time for payment of the amount
which remains unpaid or has allowed payment thereof by instalments under
sub-section (2B), the assessee shall be liable to pay simple interest at
fifteen per cent per annum on the amount remaining unpaid from the date of
expiry of the period of thirty-five days referred to
in sub-section (2A)].
37[R34] [(2D) Where the additional amount of income-tax
referred to in sub-section (2A) is not paid by the assessee within the time
specified under that sub-section or extended under sub-section (2B), as the
case may be, the Settlement Commission may direct that the amount of income-tax
remaining unpaid, together with any interest payable thereon under sub-section (2C), be recovered
and any penalty for default in making payment of such additional amount may be
imposed and recovered, in accordance with the provisions of Chapter XVII, by
the 38[R35] [Assessing]
Officer having jurisdiction over the assessee.]
(3) Where an application is allowed to be proceeded with under
sub-section (1), the Settlement Commission may call for the relevant records
from the Commissioner and after examination of such records, if the Settlement
Commission is of the opinion that any further enquiry or investigation in the
matter is necessary, it may direct the Commissioner to make or cause to be made
such further enquiry or investigation and furnish a report on the matters
covered by the application and any other matter relating to the case.
(4) After examination of the records and the report of the Commissioner,
received under sub-section (1), and the report, if any, of the Commissioner
received under sub-section (3), and after giving an opportunity to the
applicant and to the Commissioner to be heard, either in person or through a
representative duly authorised in this behalf, and after examining such further
evidence as may be placed before it or obtained by it, the Settlement
Commission may, in accordance with the provisions of this Act, pass such order
as it thinks fit on the matters covered by the application and any other matter
relating to the case not covered by the application, but referred to in the
report of the Commissioner under sub-section (1) or sub-section (3).
39[R36] [(4A) In every application allowed to be
proceeded with under sub-section (1), the Settlement Commission shall, where it
is possible, pass an order under sub-section (4) within a period of four years
from the end of the financial year in which such application was allowed to be
proceeded with.]
40[R37] [(5) Subject to the provisions of section 245BA,
the materials brought on record before the Settlement Commission shall be
considered by the Members of the concerned Bench before passing any order under
sub-section (4) and, in relation to the passing of such order, the provisions
of section 245BD shall apply.]
(6) Every order passed under sub-section (4) shall provide for
the terms41[R38] of
settlement including any demand by way of 42[R39] [tax,
penalty or interest], the manner in which any sum due under the settlement41[R40]
shall be paid and all other matters to make the settlement effective and shall
also provide that the settlement shall be void if it is subsequently found by
the Settlement Commission that it has been obtained by fraud or misrepresentation
of facts.
43[R41] [(6A) Where any tax payable in pursuance of an order
under sub-section (4) is not paid by the assessee within thirty-five days of
the receipt of a copy of the order by him, then, whether or not the Settlement
Commission has extended the time for payment of such tax or has allowed payment
thereof by instalments, the assessee shall be liable to pay simple interest at
fifteen per cent per annum on the amount
remaining unpaid from the date of expiry of the period of thirty-five days
aforesaid.]
(7) Where a settlement becomes void as provided under sub-section
(6), the proceedings with respect to the matters covered by the settlement
shall be deemed to have been revived from the stage at which the application
was allowed to be proceeded with by the Settlement Commission and the
income-tax authority concerned, may, notwithstanding anything contained in any
other provision of this Act, complete such proceedings at any time before the
expiry of two years from the end of the financial year in which the settlement
became void.
44[R42] [(8) For the removal of doubts, it is hereby
declared that nothing contained in section 153 shall apply to any order passed
under sub-section (4) or to any order of assessment, reassessment or
recomputation required to be made by the
45[R43] [Assessing]
Officer in pursuance of any directions contained in such order passed by the
Settlement Commission 46[R44] [and
nothing contained in the proviso to sub-section (1) of section 186 shall apply
to the cancellation of the registration of a firm required to be made in
pursuance of any such directions as aforesaid.]]
47[R45] [Power of Settlement Commission to order provisional attachment to
protect revenue.
245DD. (1) Where, during the pendency of any proceeding before it, the
Settlement Commission is of the opinion that for the purpose of protecting the
interests of the revenue it is necessary so to do, it may, by order, attach
provisionally any property belonging to the applicant in the manner provided in
the Second Schedule :
Provided that where a provisional attachment made under section 281B is pending
immediately before an application is made under section 245C, an order under
this sub-section shall continue such provisional attachment up to the period up
to which an order made under section 281B would have continued if such
application had not been made :
Provided further that where the Settlement Commission passes
an order under this sub-section after the expiry of the period referred to in
the preceding proviso, the provisions of sub-section (2) shall apply to such
order as if the said order had originally been passed by the Settlement
Commission.
(2) Every provisional attachment made by the Settlement Commission
under sub-section (1) shall cease to have effect after the expiry of a period of six months
from the date of the order made under sub-section (1) :
Provided that the Settlement Commission may, for reasons to be recorded in
writing, extend the aforesaid period by such further period or periods as it
thinks fit, so, however, that the total period of extension shall not in any
case exceed two years.]
Power of
Settlement Commission to reopen completed proceedings.
245E. If the
Settlement Commission is of the opinion (the reasons for such opinion to be
recorded by it in writing) that, for the proper disposal of the case pending
before it, it is necessary or expedient to reopen any proceeding connected with
the case but which has been completed 48[R46] [* *
*] under this Act by any income-tax authority before the application under
section 245C was made, it may, with the concurrence of the applicant, reopen
such proceeding and pass such order thereon as it thinks fit, as if the case
in relation to which the application for settlement had been made by the
applicant under that section covered such proceeding also :
49[R47] [Provided
that no proceeding shall be reopened by
the Settlement Commission under this section if the period between the end of
the assessment year to which such a proceeding relates and the date of
application for settlement under section 245C exceeds nine years.]
Powers and
procedure of Settlement Commission.
245F. (1) In addition to the powers conferred on the
Settlement Commission under this Chapter, it shall have all the powers which
are vested in an income-tax authority under this Act.
(2) Where an application made under section 245C has been allowed
to be proceeded with under section 245D, the Settlement Commission shall,
until an order is passed under sub-section (4) of section 245D, have, subject
to the provisions of sub-section (3) of that section, exclusive jurisdiction to
exercise the powers and perform the functions of an income-tax authority under
this Act in relation to the case.
(3) Notwithstanding anything contained in sub-section (2) and in
the absence of any express direction to the contrary by the Settlement
Commission, nothing contained in this section shall affect the operation of any
other provision of this Act requiring the applicant to pay tax on the basis of
self-assessment 50[R48] [* *
*] in relation to the matters before the Settlement Commission.
(4) For the removal of doubt, it is hereby declared that, in the
absence of any express direction by the Settlement Commission to the contrary,
nothing in this Chapter shall affect the operation of the provisions of this
Act in so far as they relate to any matters other than those before the
Settlement Commission.
53[R51] [(7) The Settlement Commission shall, subject to
the provisions of this Chapter, have power to regulate its own procedure and
the procedure of Benches thereof in all matters arising out of the exercise of
its powers or of the discharge of its functions, including the places at which
the Benches shall hold their sittings.]
245G. 54[R52] No
person shall be entitled to inspect, or obtain copies of, any reports made by
any income-tax authority to the Settlement Commission; but the Settlement
Commission may, in its discretion, furnish copies thereof to any such person
on an application made to it in this behalf and on payment of the prescribed
fee :
Provided that, for the purpose of enabling any person
whose case is under consideration to rebut any evidence brought on record
against him in any such report, the Settlement Commission shall, on an
application made in this behalf, and on payment of the prescribed fee by such
person, furnish him with a certified copy of any such report or part thereof
relevant for the purpose.
Power of Settlement Commission to grant immunity from prosecution
and penalty.
245H. (1) The Settlement Commission may, if it is
satisfied that any person who made the application for settlement under section
245C has co-operated with the Settlement Commission in the proceedings before
it and has made a full and true disclosure of his income and the manner in
which such income has been derived, grant to such person, subject to such
conditions as it may think fit to impose, immunity from prosecution for any
offence under this Act or under the Indian Penal Code (45 of 1860) or under any
other Central Act for the time being in force and also 55[R53] [(either
wholly or in part)] from the imposition of any penalty under this Act, with
respect to the case covered by the settlement :
56[R54] [Provided
that no such immunity shall be granted by the Settlement Commission in cases
where the proceedings for the prosecution
for any such offence have been instituted before the date of receipt of
the application under section 245C.]
56[R55] [(1A) An immunity granted to a person under
sub-section (1) shall stand withdrawn if such person fails to pay any sum specified
in the order of settlement passed under sub-section (4) of section 245D within
the time specified in such order or within such further time as may be allowed
by the Settlement Commission, or fails to comply with any other condition
subject to which the immunity was granted and thereupon the provisions of this
Act shall apply as if such immunity had not been granted.]
(2) An immunity granted to a person under
sub-section (1) may, at any time, be withdrawn by the Settlement Commission, if
it is satisfied that such person 57[R56] [* *
*] had, in the course of the settlement proceedings, concealed any particulars
material to the settlement or had given false evidence, and thereupon such person
may be tried for the offence with respect to which the immunity was granted or
for any other offence of which he appears to have been guilty in connection
with the settlement and shall also become liable to the imposition of any
penalty under this Act to which such person would have been liable, had not
such immunity been granted.
245HA. 58[R57] [Omitted
by the Finance Act, 2002, w.e.f. 1-6-2002.]
Order of settlement to be conclusive.
245-I. Every order of settlement passed under
sub-section (4) of section 245D shall be conclusive as to the matters stated
therein and no matter covered by such order shall, save as otherwise provided in
this Chapter, be reopened in any proceeding under this Act or under any other
law for the time being in force.
Recovery of sums due under order of settlement.
245J. Any
sum specified in an order of settlement passed under sub-section (4) of section
245D may, subject to such conditions, if any, as may be specified therein, be
recovered, and any penalty for default in making payment of such sum may be
imposed and recovered in accordance with the provisions of Chapter XVII, by the
59[R58] [Assessing]
Officer having jurisdiction over the person who made the application for
settlement under section 245C.
Bar on
subsequent application for settlement in certain cases.
245K. Where,—
(i) an order of settlement passed under
sub-section (4) of section 245D provides for the imposition of a penalty on the
person who made the application under section 245C for settlement, on the
ground of concealment of particulars of his income; or
(ii) after the passing of an order of settlement under the said
sub-section (4) in relation to a case, such person is convicted of any offence
under Chapter XXII in relation to that case; 60[R59] [or]
61[R60] [(iii) the case of such person is sent back to the
62[R61] [Assessing] Officer by the Settlement
Commission under section 245HA,] then, he shall not be entitled to
apply for settlement under section 245C in relation to any other matter.
Proceedings
before Settlement Commission to be judicial proceedings.
245L. Any
proceeding under this Chapter before the Settlement Commission shall be deemed
to be a judicial proceeding within the meaning of sections 193 and 228, and for
the purposes of section 196, of the Indian Penal Code (45 of 1860).
245M. 63[R62] [Omitted by the Finance Act, 1987, w.e.f. 1-6-1987.]
[R1]Chapter
XIX-A, consisting of sections 245A to 245M, inserted by the Taxation Laws
(Amendment) Act, 1975, w.e.f. 1-4-1976.
[R2]Substituted by the Finance Act, 1987, w.e.f.
1-6-1987. Prior to its substitution, section 245A, as amended by the Finance
(No. 2) Act, 1977, w.e.f. 10-7-1978 and Taxation Laws (Amendment) Act, 1984,
w.e.f. 1-10-1984, stood as under :
‘Definitions.—In this Chapter, unless the context otherwise
requires,—
(a) “case”
means any proceeding under this Act for the assessment or reassessment of any
person in respect of any year or years, or by way of appeal or revision in
connection with such assessment or reassessment, which may be pending before an
income-tax authority on the date on which an application under sub-section (1)
of section 245C is made;
(b) “income-tax
authority” means a Director of Inspection, a Commissioner, a Commissioner
(Appeals), an Appellate Assistant Commissioner, an Inspecting Assistant
Commissioner or an Income-tax Officer.’
[R3]Words ‘(hereafter in this Chapter referred to as “the Settlement Commission”)’ omitted by the Finance Act, 1987, w.e.f. 1-6-1987.
[R4] Substituted for “and two other members” by the Taxation Laws
(Amendment & Miscellaneous Provisions) Act, 1986, w.e.f. 10-9-1986.
[R5]Omitted by the Taxation Laws (Amendment &
Miscellaneous Provisions) Act, 1986, w.e.f. 10-9-1986. Prior to its omission,
sub-section (2A), as inserted by the Finance Act, 1982, w.e.f. 1-4-1982, stood
as under :
“(2A) Notwithstanding anything contained in sub-section (2), when
the post of one of the other members of the Settlement Commission is vacant for
any reason, the Chairman and the other members of the Settlement Commission may
function as, and exercise and discharge the powers and functions of, the
Settlement Commission under this Chapter :
Provided that if in any case the Chairman and member so functioning differ on any point or points, they shall state the point or points on which they differ and refer the same, as soon as may be after the said vacancy is filled, to the member appointed to fill the vacancy for hearing on such point or points and such point or points shall be decided according to his opinion.”
[R6]Inserted by the Taxation
Laws (Amendment & Miscellaneous Provisions) Act, 1986, w.e.f. 10-9-1986.
[R7]Inserted by the Taxation
Laws (Amendment & Miscellaneous Provisions) Act, 1986, w.e.f. 10-9-1986.
[R8]Second proviso omitted by the Taxation Laws
(Amendment & Miscellaneous Provisions) Act, 1986, w.e.f. 10-9-1986.. Prior to its omission, second proviso stood as under :
“Provided further that, until the members are appointed under this sub-section, it shall be competent for the Central Government to require, from time to time, any two members of the Board to serve as members of the Settlement Commission for such period as the Central Government thinks fit, in addition to their duties as members of the Board.”
[R13]Inserted by the Finance Act, 1987, w.e.f. 1-6-1987.
[R15]Inserted by the Finance Act, 1987, w.e.f. 1-6-1987.
[R16]See rule 44C and Form No.
34B for form of application for settlement of case. Application should be
accompanied by a fee of Rs. 500.
[R17]Substituted for
following sub-section (1) by the Taxation Laws (Amendment) Act, 1984, w.e.f.
1-10-1984:
“(1) An assessee may, at any stage of a case relating to him, make an application in such form and in such manner and containing such particulars as may be prescribed to the Settlement Commission to have the case settled and any such application shall be disposed of in the manner hereinafter provided.”
[R19] Substituted for “Income-tax” by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1988.
[R20] Substituted by the Finance Act, 1987, w.e.f.
1-6-1987. Prior to its substitution, proviso stood as under :
“Provided that no such application shall be made unless the additional amount of income-tax payable on the income disclosed in the application exceeds fifty thousand rupees.”
[R21]Substituted for “fifty” by the Finance Act, 1995, w.e.f. 1-7-1995.
[R22] Substituted
by the Finance Act, 1987, w.e.f. 1-6-1987. Prior to its substitution,
sub-section (1B) stood as under :
“(1B) Where the income disclosed in the application relates
to only one previous year,—
(i) if the applicant has not furnished a return in respect of
the total income of that year and no assessment has been made in respect of the
total income of that year, tax shall be calculated on the income disclosed in
the application as if such income were the total income;
(ii) if
the applicant has furnished a return in respect of the total income of that year
and no assessment has been made in pursuance of such return, tax shall be
calculated on the aggregate of the total income returned and the income
disclosed in the application as if such aggregate were the total income; and
(iii) if an assessment in respect of the total income of that year has been made, tax shall be calculated on the aggregate of the total income as assessed and the income disclosed in the application as if such aggregate were the total income.”
[R23]Substituted
by the Finance Act, 1987, w.e.f. 1-6-1987. Prior to its substitution,
sub-section (1C) stood as under :
“(1C) The tax as calculated under sub-section (1B) shall be
reduced,—
(a) in
a case referred to in clause (i) of sub-section (1B), by the sum, if
any, deducted at source under Chapter XVII-B or paid in advance under Chapter
XVII-C;
(b) in
a case referred to in clause (ii) of sub-section (1B), by the aggregate
of the sums referred to in clause (a) and the tax, if any, paid by the
applicant under section 140A; and
(c) in
a case referred to in clause (iii) of sub-section (1B) by the aggregate
of the sums and tax referred to in clause (b) as increased by the tax,
if any, paid in pursuance of the assessment made in respect of the total income
of that year,
and the
resultant amount so arrived at shall be the additional amount of income-tax payable in respect of the
income disclosed in the application relating to that year.”
[R24]Omitted by the Finance
Act, 2002, w.e.f. 1-6-2002. Prior to its omission, sub-section (1E) read as under :
“(1E) Where any books of account, other documents, money, bullion, jewellery or other valuable article or thing belonging to an assessee are seized under section 132, the assessee shall not be entitled to make an application under sub-section (1) before the expiry of one hundred and twenty days from the date of the seizure.”
[R26]See rule 44CA and Form No. 34B.
[R27]Substituted for “the
Settlement Commission may, by order, allow the application to be proceeded
with or reject the application” by the Finance Act, 2002, w.e.f. 1-6-2002.
[R28]Substituted by the
Finance Act, 1995, w.e.f. 1-7-1995. Prior to its substitution, the second
proviso, as earlier omitted by the Finance
Act, 1979, w.e.f. 1-4-1979 and later inserted by the Finance (No. 2) Act, 1991,
w.e.f. 27-9-1991, read as under :
“Provided further that the
Commissioner shall furnish the report within a period of one hundred and twenty
days of the receipt of communication from the Settlement Commission in case of
all applications made under section 245C on or after the date on which the
Finance (No. 2) Bill, 1991 receive the assent of the President and if the
Commissioner fails to furnish the report within the said period, the Settlement
Commission may make the order without such report.”
[R29]Prior to omission, sub-section (1A), as inserted
by the Finance Act, 1979, w.e.f. 1-4-1979 and amended by the Taxation Laws
(Amendment) Act, 1984, w.e.f. 1-4-1984, read as under:
“(1A) Notwithstanding anything contained in sub-section (1),
an application shall not be proceeded with under that sub-section if the
Commissioner objects to the application being proceeded with 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 this Act, has been established or is likely to be established
by any income-tax authority, in relation to the case :
Provided that where the Settlement Commission is not satisfied with the correctness of the objection raised by the Commissioner, the Settlement Commission may, after giving the Commissioner an opportunity of being heard, by order, allow the application to be proceeded with under sub-section (1) and send a copy of its order to the Commissioner.”
[R37]Inserted by the Finance Act, 1987, w.e.f.
1-6-1987. Original sub-section (5), as amended by the Finance Act, 1982, w.e.f.
1-4-1982, was omitted by the Taxation Laws (Amendment & Miscellaneous
Provisions) Act, 1986, w.e.f. 10-9-1986. Omitted sub-section read as under :
“(5) Subject to the provisions of sub-section (2A) of section 245B, the materials brought on record before the Settlement Commission shall be considered by all the members thereof before passing any order under sub-section (4) and, in the case of a difference of opinion among the members, the opinion of the majority shall prevail and such order shall be expressed in terms of the views of the majority.”
[R39]Substituted for “tax or
penalty” by the Finance Act, 1987, w.e.f. 1-6-1987. Earlier “tax or penalty”
was substituted for “tax, penalty or interest” by the Taxation Laws (Amendment)
Act, 1984, w.e.f. 1-10-1984.
[R46]“under
the Indian Income-tax Act, 1922 (11 of 1922), or” omitted by the Taxation Laws
(Amendment) Act, 1984, w.e.f. 1-10-1984.
[R47]Substituted
by the Finance Act, 1987, w.e.f. 1-6-1987. Prior to its substitution, it read
as under:
“Provided that no proceeding shall be reopened by the Settlement Commission under this section after the expiry of a period of eight years from the end of the assessment year to which such proceeding relates.”
[R49]Omitted by the Finance
Act, 1987, w.e.f. 1-6-1987. Original sub-section (5), which was earlier
substituted by the Taxation Laws (Amendment & Miscellaneous Provisions)
Act, 1986, w.e.f. 10-9-1986, stood as under :
“(5) The powers or functions of the Settlement Commission may be exercised or discharged by Benches constituted by the Chairman of the Settlement Commission from amongst the members thereof.”
[R50]Omitted by the Finance
Act, 1987, w.e.f. 1-6-1987. Original sub-section (6), which was inserted by the
Taxation Laws (Amendment & Miscellaneous Provisions) Act, 1986, w.e.f.
10-9-1986, stood as under :
“(6) A Bench constituted under sub-section (5) shall consist of three members, one of whom shall be the Chairman or a Vice-Chairman.”
[R51]Inserted by the Taxation
Laws (Amendment & Miscellaneous Provisions) Act, 1986, w.e.f. 10-9-1986.
[R56] “has not complied with the conditions subject to which the immunity was granted or that such person” omitted by the Finance Act, 1987, w.e.f. 1-6-1987
[R57]Prior
to its omission, section 245HA, as inserted by the Finance Act, 1987, w.e.f.
1-6-1987 and amended by the Direct Tax Laws (Amendment) Act, 1987, w.e.f.
1-4-1988, read as under :
“245HA. Power of Settlement
Commission to send a case back to the
Assessing Officer if the assessee does not co-operate.—(1) The
Settlement Commission may, if it is of opinion that any person who made an
application for settlement under section 245C has not co-operated with the
Settlement Commission in the proceedings before it, send the case back to the
Assessing Officer who shall thereupon dispose of the case in accordance with
the provisions of this Act as if no application under section 245C had been
made.
(2) For the purposes of sub-section (1),
the Assessing Officer shall be entitled to use all the materials and other
information produced by the assessee before the Settlement Commission or the
results of the inquiry held or evidence recorded by the Settlement Commission
in the course of the proceedings before it as if such materials, information,
inquiry and evidence had been produced before the Assessing Officer or held or
recorded by him in the course of the proceedings before him.
(3) For the purposes of the time-limit under sections 149, 153, 154, 155 and 231 and for the purposes of payment of interest under sections 243 and 244, in a case referred to in sub-section (1), the period commencing on and from the date of the application to the Settlement Commission under section 245C and ending with the date of receipt by the Assessing Officer of the order of the Settlement Commission sending the case back to the Assessing Officer shall be excluded; and where the assessee is a firm, for the purposes of the time-limit for cancellation of registration of the firm under sub-section (1) of section 186, the period aforesaid shall, likewise, be excluded.”
[R59]Inserted by the Finance Act, 1987, w.e.f. 1-6-1987.
[R62]Prior to its omission,
section 245M, which was originally inserted by the Taxation Laws (Amendment)
Act, 1975, w.e.f. 1-4-1976 and later amended by the Taxation Laws (Amendment)
Act, 1984, w.e.f. 1-10-1984, stood as under :
“245M. Certain persons who have filed
appeals to the Appellate Tribunal entitled to make applications to the
Settlement Commission.—(1) Notwithstanding anything contained in this
Chapter, any assessee who has filed an appeal to the Appellate Tribunal under
this Act which is pending before it shall, on withdrawing such appeal from the
Appellate Tribunal before the 1st day of October, 1984, be entitled to make an
application to the Settlement Commission to have his case settled under this
Chapter :
Provided that no such assessee
shall be entitled to make an application in a case where the Income-tax Officer
has preferred an appeal under sub-section (2) of section 253 against the order
to which the assessee’s appeal relates.
(2) Any assessee referred to in
sub-section (1) may make an application to the Appellate Tribunal for
permission to withdraw the appeal.
(3) On receipt of an application under
sub-section (2), the Appellate Tribunal shall grant permission to withdraw the
appeal.
(4) Upon the withdrawal of the appeal,
the proceeding in appeal immediately before such withdrawal shall, for the
purposes of this Chapter, be deemed to be a proceeding pending before an
income-tax authority.
(5) An application to the Settlement
Commission under this section shall be made within a period of thirty days
from the date on which the order of the Appellate Tribunal permitting the
withdrawal of the appeal is communicated to the assessee.
(6) An application made to the
Settlement Commission under this section shall be deemed to be an application
made under sub-section (1) of section 245C and the provisions of this Chapter
[except sub-section (7) of section 245D] shall apply accordingly.
(7) Where an application made to the
Settlement Commission under this section is not entertained by the Settlement
Commission, then the assessee shall not be deemed to have withdrawn the appeal
from the Appellate Tribunal and the provisions contained in section 253, section
254 and section 255 shall, so far as may be, apply accordingly.”