INCOME TAX ACT, 1961

Section 245C Section 148 Section 153A, 245D(4), 10(1) & 10(2) of Black Money Act, 2015

Settlement Commission - Jurisdiction to admit application - Notices issued under sections 148 and 153A -

Notices under section 148 and 153A were issued by revenue to respondents 2,3, and 4 (contesting respondents) and during pendency of assessment, application under section 245C was filed by contesting respondents before the Settlement Commission. However, the contesting respondents did not make any declaration of their undisclosed foreign income and assets in accordance with the provisions of the Black Money Act and the notification issued thereunder. Vide Order, dated 14-8-2017 made under section 245C(1) the applications made by the contesting respondents were admitted by the Settlement Commission and allowed to be proceeded with. Thereafter, vide Order, dated 28-9-2017 under section 245D(2C) the Settlement Commission held that the applications made by the contesting respondents not to be 'invalid'. The petitioner (Revenue) objected to admission of application on issuing notices issued by revenue under sections 148 and 153A as there was lack of jurisdiction.Held: From the submissions advanced on behalf of the petitioner, nothing had been pointed out to show that the Settlement Commission has not followed any provision of law. The record of the case shows that the requirements of section 245D of the Income Tax Act have been duly satisfied prior to the passing of the impugned order under section 245D(4). Therefore, there was no infirmity or illegality in the approach adopted by the Settlement Commission, which has merely decided applications made under section 245C in accordance with law. As held by the Supreme Court in catena of decisions, an order of the Settlement Commission can be interfered with only if such order is found to be contrary to any provisions. Another aspect of the matter was that the proceedings before the Settlement Commission were taken in connection with notices issued under sections. 148 and 153A, and it was therefore, that the Settlement Commission had the jurisdiction to decide the applications under section 245C, which related to the proceedings in respect of those notices. If it was the case of the revenue that the undisclosed foreign income and asset of the contesting respondents were covered by the provisions of the Black Money Act, the notices under sections 148 and 153A, which mainly related to undisclosed foreign income, ought to have been withdrawn and proceedings ought to have been initiated under the relevant provisions of the Black Money Act. However, it seemed that since the notices under section 148 and 153A of the IT Act related to undisclosed foreign income of periods not covered by the Black Money Act, such notices were not withdrawn and a conscious decision was taken to pursue the settlement proceedings. If that be so, it was always permissible for the assessees, namely, the contesting respondents, to opt for settlement under Chapter XIX-A of the IT Act and the Settlement Commission had the jurisdiction to decide the applications under section 245C of the IT Act in respect of the income disclosed therein. Moreover, for the reasons set out hereinabove, even on a consideration of the provisions of the Black Money Act, this court finds that the Settlement Commission did not lack the jurisdiction to decide the applications under section 245C of the IT Act. In the light of the above discussion, the contention advanced on behalf of the petitioner that the Settlement Commission did not have the jurisdiction to decide the applications under section 245D does not merit acceptance. Another aspect of the matter was that the proceedings before the Settlement Commission were taken in connection with notices issued under sections 148 and 153A and it was therefore, that the Settlement Commission had the jurisdiction to decide the applications under section 245C, which related to the proceedings in respect of those notices.

REFERRED : UOI v. Gautam Khaitan rendered on 15-10-2019 in Criminal Appeal No. 1593 of 2013 : 2019 TaxPub(DT) 7057 (SC), CTO v. Binani Gements Ltd. & anr. (2014) 8 SCC 319, Maharshi Dayanand University v. Surjeet Kaur 92010) 11 SCC 1569, Collector v. Cine Exhibitors (P) Ltd. 92012) 4 SCC 5441 (SC) and Jagmittar Sain Bhagat v. Health Services, Haryana, (2013) 10 SCC 136 (SC).

FAVOUR : In assessee's/respondents favour.

A.Y. :

INCOME TX ACT, 1961

Section 245D(4)

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