Law:

Section:

Section 245C, read with sections 245D and 245F, of the Income-tax Act, 1961 - Settlement Commission - Application for settlement of cases - Assessment years 1991-92 to 1993-94 - Whether though Settlement Commission has all powers which are vested with an income-tax authority, in addition to power conferred under Chapter XIX-A, yet such power can be exercised for purpose of procedure of settlement of application under section 245C and not for reassessment of tax of a particular year - Held, yes - Whether where income disclosed by assessees under section 245C was not accepted by Settlement Commission as full and true disclosure of their income, applications filed under section 245C were not maintainable and, therefore, order passed by Settlement Commission enhancing income disclosed by assessees was without jurisdiction - Held, yes FACTS The assessees were jewellers. They had been assessed by the Assessing Officer. Subsequently, the Assessing Officer initiated reassessment proceedings and made additions on account of difference between the closing stock and opening stock in the ornament register of the assessees. The assessees filed appeals before the Commissioner (Appeals). During the pendency of the said appeals, they filed applications for settlement under section 245C disclosing their revised income. The Settlement Commission, after enquiry, though accepted that the assessees had made full and true disclosure, yet enhanced the revised income as shown by the assessees. On writ, the Single Judge upheld the order of the Settlement Commission holding that the decision to approach the Settlement Commission was entirely that of the assessees, they being under no compulsion whatsoever to approach the Commission and having sought the order of the Commission, it was not open to them to wriggle out of that order by saying that the Commission ought not to have determined the income at a figure higher than the one that had been offered by them. On appeal : HELD The provisions for settlement of cases are prescribed under Chapter XIX-A. From these provisions, it will be evident that apart from the power conferred under Chapter XIX-A, the Settlement Commission has the power…

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