Section 245D of Income Tax Act "Procedure on receipt of an application under section 245C"
245D. (1) On receipt of an application under section
245C, the Settlement Commission shall, within seven days
from the date of receipt of the application, issue a notice
to the applicant requiring him to explain as to why the
application made by him be allowed to be proceeded with, and
on hearing the applicant, the Settlement Commission shall,
within a period of fourteen days from the date of the
application, by an order in writing, reject the application
or allow the application to be proceeded with:
Provided that where no order has been passed within the
aforesaid period by the Settlement Commission, the
application shall be deemed to have been allowed to be
proceeded with.
(1A) [Omitted by the Finance (No. 2) Act, 1991, w.e.f.
27-9-1991.]
(2) A copy of every order under sub-section (1) shall be
sent to the applicant and to the Principal Commissioner or
Commissioner.
(2A) Where an application was made under section 245C before
the 1st day of June, 2007, but an order under the provisions
of sub-section (1) of this section, as they stood
immediately before their amendment by the Finance Act, 2007,
has not been made before the 1st day of June, 2007, such
application shall be deemed to have been allowed to be
proceeded with if the additional tax on the income disclosed
in such application and the interest thereon is paid on or
before the 31st day of July, 2007.
Explanation.-In respect of the applications referred to in
this sub-section, the 31st day of July, 2007 shall be deemed
to be the date of the order of rejection or allowing the
application to be proceeded with under sub-section (1).
(2B) The Settlement Commission shall,-
(i) in respect of an application which is allowed to be
proceeded with under sub-section (1), within thirty days
from the date on which the application was made; or
(ii) in respect of an application referred to in sub-section
(2A) which is deemed to have been allowed to be proceeded
with under that sub-section, on or before the 7th day of
August, 2007,
call for a report from the Principal Commissioner or
Commissioner, and the Principal Commissioner or Commissioner
shall furnish the report within a period of thirty days of
the receipt of communication from the Settlement Commission.
(2C) Where a report of the Principal Commissioner or
Commissioner called for under sub-section (2B) has been
furnished within the period specified therein, the
Settlement Commission may, on the basis of the report and
within a period of fifteen days of the receipt of the
report, by an order in writing, declare the application in
question as invalid, and shall send the copy of such order
to the applicant and the Principal Commissioner or
Commissioner:
Provided that an application shall not be declared invalid
unless an opportunity has been given to the applicant of
being heard:
Provided further that where the Principal Commissioner or
Commissioner has not furnished the report within the
aforesaid period, the Settlement Commission shall proceed
further in the matter without the report of the Principal
Commissioner or Commissioner.
(2D) Where an application was made under sub-section (1) of
section 245C before the 1st day of June, 2007 and an order
under the provisions of sub-section (1) of this section, as
they stood immediately before their amendment by the Finance
Act, 2007, allowing the application to have been proceeded
with, has been passed before the 1st day of June, 2007, but
an order under the provisions of sub-section (4), as they
stood immediately before their amendment by the Finance Act,
2007, was not passed before the 1st day of June, 2007, such
application shall not be allowed to be further proceeded
with unless the additional tax on the income disclosed in
such application and the interest thereon, is,
notwithstanding any extension of time already granted by the
Settlement Commission, paid on or before the 31st day of
July, 2007.
(3) The Settlement Commission, in respect of-
(i) an application which has not been declared invalid under
sub-section (2C); or
(ii) an application referred to in sub-section (2D) which
has been allowed to be further proceeded with under that
sub-section,
may call for the records from the Principal Commissioner or
Commissioner and after examination of such records, if the
Settlement Commission is of the opinion that any further
enquiry or investigation in the matter is necessary, it may
direct the Principal Commissioner or Commissioner to make or
cause to be made such further enquiry or investigation and
furnish a report on the matters covered by the application
and any other matter relating to the case, and the Principal
Commissioner or Commissioner shall furnish the report within
a period of ninety days of the receipt of communication from
the Settlement Commission:
Provided that where the Principal Commissioner or
Commissioner does not furnish the report within the
aforesaid period, the Settlement Commission may proceed to
pass an order under sub-section (4) without such report.
(4) After examination of the records and the report of the
Principal Commissioner or Commissioner, if any, received
under-
(i) sub-section (2B) or sub-section (3), or
(ii) the provisions of sub-section (1) as they stood
immediately before their amendment by the Finance Act, 2007,
and after giving an opportunity to the applicant and to the
Principal Commissioner or Commissioner to be heard, either
in person or through a representative duly authorised in
this behalf, and after examining such further evidence as
may be placed before it or obtained by it, the Settlement
Commission may, in accordance with the provisions of this
Act, pass such order as it thinks fit on the matters covered
by the application and any other matter relating to the case
not covered by the application, but referred to in the
report of the Principal Commissioner or Commissioner.
(4A) The Settlement Commission shall pass an order under
sub-section (4),-
(i) in respect of an application referred to in sub-section
(2A) or sub-section (2D), on or before the 31st day of
March, 2008;
(ii) in respect of an application made on or after the 1st
day of June, 2007 but before the 1st day of June, 2010
within twelve months from the end of the month in which the
application was made;
(iii) in respect of an application made on or after the 1st
day of June, 2010, within eighteen months from the end of
the month in which the application was made.
(5) Subject to the provisions of section 245BA, the
materials brought on record before the Settlement Commission
shall be considered by the Members of the concerned Bench
before passing any order under sub-section (4) and, in
relation to the passing of such order, the provisions of
section 245BD shall apply.
(6) Every order passed under sub-section (4) shall provide
for the terms of settlement including any demand by way of
tax, penalty or interest, the manner in which any sum due
under the settlement shall be paid and all other matters to
make the settlement effective and shall also provide that
the settlement shall be void if it is subsequently found by
the Settlement Commission that it has been obtained by fraud
or misrepresentation of facts.
(6A) Where any tax payable in pursuance of an order under
sub-section (4) is not paid by the assessee within
thirty-five days of the receipt of a copy of the order by
him, then, whether or not the Settlement Commission has
extended the time for payment of such tax or has allowed
payment thereof by instalments, the assessee shall be liable
to pay simple interest at one and one-fourth per cent for
every month or part of a month on the amount remaining
unpaid from the date of expiry of the period of thirty-five
days aforesaid.
(6B) The Settlement Commission may, with a view to
rectifying any mistake apparent from the record, amend any
order passed by it under sub-section (4)-
(a) at any time within a period of six months from the end
of the month in which the order was passed; or
(b) at any time within the period of six months from the end
of the month in which an application for rectification has
been made by the Principal Commissioner or the Commissioner
or the applicant, as the case may be:
Provided that no application for rectification shall be made
by the Principal Commissioner or the Commissioner or the
applicant after the expiry of six months from the end of the
month in which an order under sub-section (4) is passed by
the Settlement Commission:
Provided further that an amendment which has the effect of
modifying the liability of the applicant shall not be made
under this sub-section unless the Settlement Commission has
given notice to the applicant and the Principal Commissioner
or Commissioner of its intention to do so and has allowed
the applicant and the Principal Commissioner or Commissioner
an opportunity of being heard. (7) Where a settlement
becomes void as provided under sub-section (6), the
proceedings with respect to the matters covered by the
settlement shall be deemed to have been revived from the
stage at which the application was allowed to be proceeded
with by the Settlement Commission and the income-tax
authority concerned, may, notwithstanding anything contained
in any other provision of this Act, complete such
proceedings at any time before the expiry of two years from
the end of the financial year in which the settlement became
void.
(8) For the removal of doubts, it is hereby declared that
nothing contained in section 153 shall apply to any order
passed under sub-section (4) or to any order of assessment,
reassessment or recomputation required to be made by the
Assessing Officer in pursuance of any directions contained
in such order passed by the Settlement Commission and
nothing contained in the proviso to sub-section (1) of
section 186 shall apply to the cancellation of the
registration of a firm required to be made in pursuance of
any such directions as aforesaid.
245DD. (1) Where, during the pendency of any proceeding
before it, the Settlement Commission is of the opinion that
for the purpose of protecting the interests of the revenue
it is necessary so to do, it may, by order, attach
provisionally any property belonging to the applicant in the
manner provided in the Second Schedule :
Provided that where a provisional attachment made under
section 281B is pending immediately before an application is
made under section 245C, an order under this sub-section
shall continue such provisional attachment up to the period
up to which an order made under section 281B would have
continued if such application had not been made :
Provided further that where the Settlement Commission passes
an order under this sub-section after the expiry of the
period referred to in the preceding proviso, the provisions
of sub-section (2) shall apply to such order as if the said
order had originally been passed by the Settlement
Commission.
(2) Every provisional attachment made by the Settlement
Commission under sub-section (1) shall cease to have effect
after the expiry of a period of six months from the date of
the order made under sub-section (1) :
Provided that the Settlement Commission may, for reasons to
be recorded in writing, extend the aforesaid period by such
further period or periods as it thinks fit.