Law:

Section:

Section 245C of the Income-tax Act, 1961 - Settlement Commission - Application for settlement of cases - Assessment years 2003-04 to 2005-06 - Whether any payment of additional tax made after 31-7-2007 can be considered for purpose of compliance with requirement of section 245C - Held, no Section 245C, read with sections 245D and 2(45), of the Income-tax Act, 1961 - Settlement Commission - Application for settlement of cases - Assessment years 2003-04 to 2005-06 - Whether Settlement Commission, while considering as to whether tax has been paid as contemplated by section 245D(2A), has to examine whether that tax is on total income as disclosed - Held, yes - Whether if otherwise assessee is entitled to benefits of allowance or disallowance, same cannot be denied for purpose of working out total income under section 245C; therefore, if assessee is entitled to carry-forward loss of previous year, then total income has to be calculated in that manner - Held, yes FACTS The petitioner-company filed application under section 245C before the Settlement Commission. While calculating the total income as required under section 245C, the petitioner took the returned income for the assessment year 2004-05, which was the only assessment year, being the loss of Rs. 93,112 and added the additionally disclosed income of Rs. 53,57,375 and arrived at the figure of Rs. 52,64,263 wherefrom brought forward loss of Rs. 93,193 relating to the assessment year 2003-04 was deducted under section 72. The petitioner, accordingly, worked out additional tax and paid same within time. The Settlement Commission rejected the application on the ground that for the purpose of appreciating the compliance of the provisions of section 245D(2A), carried forward loss of an earlier year was not to be taken into account and if the carried forward loss of the earlier year was ignored, then the tax paid by the petitioner was rendered inadequate, thereby resulting in non-compliance of the provisions of section 245D(2A) and, accordingly, the proceedings abated. On writ petition : HELD Admittedly, the excess amount based on the contentions urged by the respondents was paid only on 13-11-2007, on payment of…

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