Procedure on
receipt of an application under section 245C. 83
245D. 84[(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) 85[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 Commissioner.
86[(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 Commissioner, and the 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
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 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 Commissioner has not furnished the report
within the aforesaid period, the Settlement Commission shall proceed further in
the matter without the report of the 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.]
87[(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 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
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 Commissioner shall furnish the report
within a period of ninety days of the receipt of communication from the
Settlement Commission:
Provided that where the 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 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 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 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 87a[but before the 1st day of June, 2010], within twelve months from the end of the month in which the application
was made;]
87b[(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.]
88[(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 89 including any demand by way of 90[tax, penalty or interest], the manner in which any sum due under the
settlement 89 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.
91[(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 92[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.]
(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.
93[(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 94[Assessing] Officer in pursuance of any directions contained in such order
passed by the Settlement Commission 95[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.]]