- (1.) Special leave granted. This is an appeal against the judgment and order of the Settlement Commission dated 7th Aug. 1987. The fact that an appeal under Art. 136 of the Constitution lies against the order of the Settlement Commission is now beyond pale of any controversy in view of the decision of this Court in Commr. of Income-tax (Central), Calcutta v. B. N. Bhattachargee, (1979) 118 ITR 461: (AIR 1979 SC 1725). The appellant had applied to the Settlement Commission for settlement of his assessment for the assessment years 1948-49 to 1975-76 under the Income-tax Act, 1961 (hereinafter referred to as 'the Act'). That application had to be proceeded in accordance with S. 245C of the Act which is as follows: "245C. (1) An assessee may, at any stage of a case relating to him, make an application in such form and in such manner and containing such particulars as may be prescribed to the Settlement Commission to have the case settled and any such application shall be disposed of in the manner hereinafter provided." Sub-sections (2) and (3) of S. 245C of the Act are not relevant for our present purpose.
(2.) The application made by the appellant was a composite one for settlement of his assessments for the assessment years 1948-49 to 1975-76. The purpose for the introduction of the Settlement Commission has been explained by this Court in the aforesaid decision. This Court observed that these are contained in Chapter XIX-A of the Income-tax Act, 1961. The said Chapter was enacted by the Taxation Laws (Amendment) Act, 1975 whose beneficiaries were ordinarily those whose tax liability was astronomical and criminal culpability perilous. As has been observed that this Chapter was introduced with the debatable policy, fraught with dubious potentialities in the context of Third World conditions of political peculium and bureaurcratic abetment, that composition and collection of public revenue from tycoons is better than prosecution of their tax-related crime and litigation for total revenue recovery. The Wanchoo Committee appointed by the Government of India had recommended this step.
(3.) It appears that on 12th Aug. 1977 the Commissioner of Income-tax objected to the proposal of the appellant under S. 245D(1) of the Act. The Commissioner objected to the Settlement for the years 1948-49 to 1959-60, but agreed to the settlement for later years. The Commissioner, it appears, accordingly made an order on 24th Aug. 1977 rejecting the application for settlement for the years 1948-49 to 1959-60. The appellant on 20th Sept. 1977 applied to the Commission to recall its earlier order dated 24th Aug. 1977 since the same had been made without furnishing any opportunity of hearing to the appellant. Section 245D(1) provides as follows: "245D. PROCEDURE ON RECEIPT OF AN APPLICATION UNDER SECTION 245C (1) On receipt of an application under S. 245C, the Settlement Commission shall call for a report from the Commissioner and on the basis of the materials contained in such report and having regard to the nature and circumstances of the case or the complexity of the investigation involved therein, the Settlement Commission may, by order, allow the application to be proceeded with or reject the application : Provided that an application shall not be rejected under this sub-section unless an opportunity has been given to the applicant of being heard. Provided further that an application shall not be proceeded under this sub-section if the Commissioner objects to the application on being proceeded with on the ground that concealment of particulars of income on the part of the applicant or perpetration of fraud by him for evading any tax or other sum chargeable or imposable under the Indian Income-tax Act, 1922 (Xl of 1922), or under this Act, has been established or is likely to be established by any Income-tax authority, in relation to the case.";