VINEET KOTHARI,J. - (1.) BOTH the learned counsels for the parties submit that the controversy involved in the present writ petition has already been decided by a coordinate bench of this Court at Jaipur bench in S.B.C.W.P. No.12911/2008 -Commissioner of Income Tax Central, Jaipur Vs. M/s Anil Hastkala (P) Ltd. & Anr., decided by learned Single Judge of this Court on 13.08.2009, which judgment has been affirmed by the Division Bench in cross appeals filed by the Revenue and Assessee and one such judgment has also been delivered in D.B.S.A.W. No.1000/2009 -Commissioner of Income Tax -Central & Anr. Vs. M/s Birdhi Chand Ghanshyam Das & Anr., decided on 06.05.2011. The controversy involved in the present is case is as to whether the Settlement Commission constituted under the provision of Income Tax Act was justified in passing ex -parte order in favour of assessee without giving proper opportunity of hearing to both the sides; and in such cases, a coordinate bench has already remanded the matter back to the Settlement Commission to decide the matter afresh in accordance with provisions of Section 245D of the Act.
(2.) THE relevant extract of the said judgment delivered in the case of Commissioner of Income Tax Central, Jaipur Vs. M/s Anil Hastkala (P) Ltd. & Anr. (supra), is reproduced herein below for ready reference: Primary question for consideration in a bunch of writ petitions preferred by Revenue and cross petitions by different assessees is with regard to applications filed before settlement commission on or before 01/06/2007 and assailing orders of Settlement Commission, on the premise that if impugned order of Settlement commission U/s 245 -D(4) of Income Tax Act, 1961 ("Act") is held to be legally unsustainable, in such an eventuality, whether matters are to be remitted back to settlement commission to examine afresh in accordance with law or to the assessing authority in view of proceedings initiated under Chapter -XIX -A on being held to be abated in terms of S. 245 -HA of the Act? Consequently, all these writ petitions stated in Schedule A & B appended to this order succeed & are hereby allowed; and the orders dt. 31/03/08 and 29/03/08 passed by settlement commission being in instant bunch of petitions are hereby quashed and set aside. However, matters are remitted back to the respective settlement commission benches to decide applications of assessees filed U/s 245 -C after affording opportunity of hearing to the parties and after due compliance of S. 245D(4) of the Act may pass fresh orders in accordance with law without being influenced by observations, made supra, expeditiously keeping in view the fact of matters pendent for sufficient long time. Parties are directed to appear before concerned Settlement commission on 14/09/09. No costs. Sd/ -(Ajay Rastogi), J.
(3.) THE Division Bench of this Court in the case of Commissioner of Income Tax -Central & Anr. Vs. M/s Birdhi Chand Ghanshyam Das & Anr. (supra) (Page 35) has held as under: On facts, it is not in dispute at Bar that opportunity of hearing was not afforded by Settlement Commission to either of the parties. Only the assessee submitted the written arguments, not the Revenue. Written submissions were not filed by the Revenue. No time was granted by the Settlement Commission even to file the written submissions or for oral hearing due to paucity of time. As 31.3.2008 was the cut off date fixed, hence, it was observed that it was not possible for the Settlement Commission to provide opportunity of hearing to the parties. No doubt about it that in Para 6 of the orders there is reference of certain material and there is statement that additional amount has bee paid. However, it is apparent from Para 5 of the order that Settlement Commission has observed that it was not practicable to examine the records which was mandatory to investigate the case meaning thereby, to record the evidence necessary for proper settlement. At the same time, it has also been observed that giving opportunity of hearing to the applicant, assessees and the Revenue as envisaged under Section 245D(4) was not practicable for the Settlement Commission. In fact, no due opportunity was given, hence reasoning, if any, mentioned would not make order legal and valid. Question is that of legality of the action taken in flagrant violation of the provisions under Section 245D(4) of the Act as it is not disputed that opportunity of hearing was not afforded. There was no time to give serious look to the record and much less to record the evidence. No enquiry was made. Thus, in our considered opinion, there is flagrant violation of the provisions of Section 245D(4) of the Act. The orders so passed are rendered nullity and liable to be set aside. Merely by mentioning of certain material without actively assessing what were the statement etc., cannot be said to be compliance of the provisions of Section 245D(4) of the Act. Any finding so recorded in Para 6 of the order without hearing, without investigating and without deeply looking into the record cannot be said to be legal and binding. The procedural safeguards have not been observed as such findings recorded in Para 6 of the orders of these 25 cases also cannot be permitted to survive. The Senior Counsel has referred to the objective of the establishment of the Settlement Commission by referring to the decision in CIT Vs. B.N. Bhattachargee (supra) in which the Apex Court has laid down that the purpose of substituting the method of investigative negotiation, just settlement and early eligibility by a higher -powered Commission for a tier -upon -tier of long protracted litigation, where victory may be Pyrrhic and futile, is ill served by keeping out cases solely for the reason that departmental appeals have been filed. It is not for the court to explore the intendment of the legislation beyond the language in which the section is couched. The Apex Court has also laid down that Settlement Commission is a Tribunal. Its powers are considerable; its determination affects the rights of the parties; its obligations are quasi judicial; the orders it makes at every stage have tremendous impact on the rights and liabilities of parties. The Apex Court has also observed that it is not inappropriate to state that the policy of the law as disclosed in Chapter -XIXA is not to provide a rescue shelter for big tax -dodgers who indulge in criminal activities by approaching the Settlement Commission. The Settlement Commission will certainly take due note of the gravity of economic offences on the wealth of the nation which the Wanchoo Committee had emphasized and will exercise its power of immunization against criminal prosecutions by using its power only sparingly and in deserving cases; otherwise such orders may become vulnerable if properly challenged. Learned counsel has also relied upon the decision in CIT Vs. Om Prakash Mittal (supra) to contend that the Settlement Commissioner's power of settlement has to be exercised in accordance with the provisions of the Income Tax Act. Though the Settlement Commission has sufficient elbow room in assessing the income of the applicant, it cannot make any order with a term of settlement which would be in conflict with the mandatory provisions of the Act like the quantum and payment of tax and interest. The object of the Legislature in introducing section 245C is to see that protracted proceedings before the authorities or in courts are avoided by resorting to settlement of cases. In this process an assessee cannot expect any reduction in amounts statutorily payable under the Act. Reliance has also been placed upon the decision of the High Court of Bombay in Star Television News Ltd. (supra) in which Wanchoo Committee's recommendations have been quoted in Para 2.33 in which it has been observed that settlement is fair, prompt and independent. Suggestion was made that there should be a high level machinery in administrating the provisions. In our opinion, there is no doubt about it that the Settlement Commission has been established with the aforesaid objectives. At the same time as observed by the Apex Court in CIT Vs. Om Prakash Mittal (supra) the Commission was bound to comply with the provisions of statute. No doubt about it that there should not be protraction of the settlement proceedings but at the same time the mandatory provisions are also required to be complied with. Merely under the banner of no protraction of the case, illegality or flagrant violation of the provisions of the Act cannot be permitted to survive. It was incumbent upon the Settlement Commission to act in accordance with the provisions under Section 245D(1) of the Act. There has been blatant violation of the said provision in the instant case. Even as per the findings which are recorded in the form of confession, violation of the provision has been made as it was mandatory to comply with the order of the High Court. Orders were passed in due haste. However, the High Court order never meant the Settlement Commission to violate the mandate of the provisions of the Act, it was incumbent upon the Settlement Commission to pass appropriate order in accordance with law. It was incumbent upon the Settlement Commission to follow strictly provisions enumerated in Section 245D(4) and other provisions. Consequently, we find that these 25 cases of the assessees are also required to be heard afresh by the Settlement Commission and decided in accordance with law after duly following the mandate of Section 245D(4) of the Act. We are of the opinion that no case is made out to interfere in the appeals. Consequently, intra -court appeals, cross objections and stay applications are hereby dismissed. Let the Settlement Commission make an endeavour to decide the cases in accordance with law as far as possible within a period of six months from the date of appearance of the parties. No costs. (S.S. Kothari), J. (Arun Mishra), CJ In view of this, the present writ petitions are also disposed of in the same terms and setting aside the impugned orders of the Settlement Commission, the matter is remanded back to the Settlement Commission for decision afresh in accordance with law as aforesaid. No costs.;