Law:

Section:

Section 245D(1), read with section 245C, of the Income-tax Act, 1961 - Settlement Commission - Procedure on receipt of application under section 245C - Whether amendment of section 245D with effect from 1-4-1979 empowering Settlement Commission to overrule objections of Commissioner was procedural and would govern proceedings pending on date of amendment- Held, yes - Whether an order passed by Commissioner under section 245D prior to aforesaid amendment without giving applicant an opportunity of hearing was a nullity being passed in violation of principles of natural justice - Held, yes - Whether after amendment of section 245D with effect from 1-4-1979 assessee was entitled to be heard on objections of Commissioner - Held, yes Facts The appellant had applied to the Settlement Commission for the settlement of his assessment for the assessment years 1948-49 to 1975-76. On 12-8-1977 the Commissioner objected to the proposal of the appellant under section 245D(1). The Commissioner objected to the settlement for the years 1948-49 to 1959-60, but agreed to the settlement for later years. The Commissioner, accordingly, made an order on 24-8-1977, rejecting the application for settlement for the years 1948-49 to 1959-60. The appellant on 20-9-1977 applied to the Commission to recall its earlier order dated 24-8-1977, since the same had been made without providing any opportunity of hearing to the appellant. That application was pending. In the meantime, on 1-4-1979, the Finance Act, 1979 inserted sub-section (1A) to section 245D which empowered the Settlement Commission to overrule the objections of the Commissioner. On 29-5-1979 the appellant applied to the Settlement Commission to permit it to contest the objections of the Commissioner under the said proviso. The matter was taken up after a long gap in June 1987 and it was heard on 18-6-1987 and 1-7-1987. The appellant contended that the order of 24-8-1977 should be recalled and the objections of the Commissioner be dealt with in accordance with the amended provisions of section 245D(1A) and it also contended that if the Commissioner's objections were not to be interfered with then the entire application should be…

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