Law:

Section:

Section 245D of the Income-tax Act, 1961 - Settlement Commission - Procedure on application under section 245C - Whether it is incumbent upon Settlement Commission to act in accordance with provisions under section 245D(4) - Held, yes - Applications for settlement were filed before Settlement Commission on or before 1-6-2007 - Orders were passed by Settlement Commission under section 245D(4) before 31-3-2008 - Revenue assailed orders mainly on ground that opportunity of hearing was not afforded as provided under section 245D(4) - It was also submitted that Settlement Commission became functus officio and proceedings stood abated in terms of provisions of section 245HA - Single Bench held that Settlement Commission did not become functus officio - Single Bench also remitted matter to Settlement Commission to examine same afresh after affording opportunity of hearing to parties - On cross appeals, it was noted that as 31-3-2008 was cut off date, Settlement Commission did not provide opportunity of hearing to parties due to paucity of time - Further, no enquiry was made and records were also not examined - Whether on facts, impugned order passed by Settlement Commission was in flagrant violation of provisions of section 245D(4) and, thus, same was to be set aside with a direction to Settlement Commission to dispose of matter afresh - Held, yes - Whether since matter would relate back to time when proceedings were initiated, there was no question of Settlement Commission becoming functus officio after 31-3-2008 - Held, yes FACTS The applications for settlement were filed before the Settlement Commission on or before 1-6-2007. The orders were passed by the Settlement Commission under section 245D(4). The revenue assailed the orders mainly on the ground that opportunity of hearing was not afforded as provided under section 245D(4). It was also submitted that the Settlement Commission became functus officio and the proceedings stood abated in terms of the provisions of section 245HA. The assessee also submitted that procedure adopted by the Settlement Commission while passing the orders was in flagrant violation of the provisions of section 245D(4). The orders were…

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