By TIOL News Service

MUMBAI, FEB 04, 2016: THE issue is - Whether an application for rectification of orders passed by the Settlement Commission can be disposed of by the Secretary of the Commission who would have no role to play in passing of the concerned orders, which was sought to be rectified. NO is the answer.

Facts of the case

The assessee had preferred the present petition challenging order passed u/s 245(D)(6B) on the assessee's application for rectification of the order dated 27th Aug, 2015. The assessee had further challenged the communication from the Secretary of the Commission dismissing the assessee's further application for rectification of the earlier orders passed by Commission.

Having heard the parties, the High Court held that,

++ the genesis of the proceedings for rectification of the order arose on account of the fact that the assessee had during the hearing of its application for settlement leading to the order sought payment in at least four quarterly installments payable in case any additional tax liability is determined in the order passed u/s 245D(4). This submission was not considered in the order dated 27th August, 2015 passed by the Commission u/s 245D(4). The omission to consider the above submission resulted in the Petitioner filing a rectification application dated 25th Sep, 2015 to the Commission seeking rectification of the order dated 27th Aug, 2015 passed u/s 245D(4). The Commission by order dated 20th Oct, 2015, disposed of the rectification application by recording the fact that the assessee had specifically sought four quarterly installment facilities during the course of hearing. The impugned order records that it is a mistake apparent from the record and rectified its order by an order u/s 245(D)(6B). However, without considering the assessee's prayer for four quarterly installment facilities, the order dated 20th Oct, 2015 granted four monthly installments to pay the tax along with interest commencing from October, 2015. This order was passed without hearing the assessee and even does not consider the reasons for which the assessee sought payment of its dues by the quarterly installment made during the course of hearing;

++ in the above circumstances, the assessee filed a further application for rectification dated 23rd Oct, 2015 pointing out the circumstances which would make it impossible for them to comply with the orders dated 27th August, 2015 as rectified by an order dated 20th Oct, 2015. It was this application for rectification which has been disposed of by the Secretary of the Commission in his Communication dated 28th Dec, 2015. We are unable to understand how an application for rectification of orders passed by the Settlement Commission can be disposed of by the Secretary of the Commission who would have no role to play in passing of the orders dated 27th Aug, 2015 and 20th Oct, 2015 which was sought to be rectified. It is for the Commission to consider the applications which are filed before it seeking the modification or rectification of the orders passed by it and same cannot be outsourced by the Commission to its Secretary. In view of the above and in the peculiar facts of the present case, we set aside the orders dated 20th October, 2015 being the order passed on assessee's rectification application u/s 245(D)(6B) as it is an order passed not only without hearing the assessee but also without recording any reasons why the rectification application made by the assessee is not being allowed in its entirety.

(See 2016-TIOL-208-HC-MUM-IT)