By TIOL News Service

CHENNAI, SEPT 22, 2017: THE ISSUE BEFORE THE COURT IS - Whether Settlement Commission has power to reopen any proceedings which has already concluded by it, for purposes of review, on basis of subsequent development of law laid down by Apex Court. NO is the verdict.

Facts of the case:

During the subject year, the Settlement Commission passed a consolidated order u/s 245D(4), thereby granting waiver of interest u/s 234A & 234B. In the said orders, the terminal date for charging of interest u/s 234B was fixed as date of completion of proceedings u/s 143(1)(a) or upto the date of assessment u/s 143(3). The Assessees were said to have paid a sum of Rs. 12,57,974/-, pursuant to the orders passed by the Settlement Commission. While so, the Assessees received a notice from the CIT requiring them to file their counter to a miscellaneous petition filed before the Commission for varying its order. The Assessees contended before the Settlement Commission that the CIT wanted to apply the ratio of the judgment of Supreme Court in the case of CIT Vs. Hindustan Bulk Carriers - 2002-TIOL-845-SC-IT-LB which was decided on January 07, 2000 and the whole matter had concluded by the payment of money within the stipulated time. Thus, it was submitted that the very idea of applying the judgment retrospectively in a concluded matter was unknown to law. Inspite of such contest, the Settlement Commission re-opened the earlier order passed by it.

High Court held that,

++ it is noted that in an identical circumstance, in the case of R. Vijayalakshmi V. Income Tax Settlement Commission, this Court has considered as to whether the action of the Commission in entertaining the miscellaneous petition after the conclusion of the proceedings is valid, and whether the terminal date for charging interest could be altered based on a subsequent decision of Supreme Court. Both the above issues were answered in favour of the assessee by observing that: "....Section 245-I states that any order of the Commission passed u/s 245 shall be conclusive as to the matters stated therein and no matter covered by such order shall, save as otherwise provided in that chapter, be reopened in any proceeding under the Act or under any other law for the time being in force. The said provision does not confer the power of review on the commission. It is settled legal position that power of review is to be specifically conferred on the authority by the statute and power of review is not inherent with the authority. However, when the statute does not provide power of review with the authority and if it is done, it has to be termed as wholly without jurisdiction....Further, decisions rendered by the Supreme Court much after the final order was passed by the Commission u/s 245D(4), is no ground for reopening concluded matters. Rudimentary legal principle is that subsequent development of law cannot be a ground to exercise review jurisdiction and that cannot be taken into consideration as an error apparent on the face of the record....". The Revenue does not dispute the legal principle laid down in the above decision, and hence the impugned order is quashed.

(See 2017-TIOL-1975-HC-MAD-IT)