HIGH COURT OF JUDICATURE FOR RAJASTHAN BENCH AT JAIPUR D.B. Special Appeal Writ No. 1672 / 2011 1. Commissioner Of Income Tax-III, Jaipur. 2. Income Tax Officer, Ward No. 1, Jhunjhunu (Raj.) ----Appellants Versus 1. Rajendra Prasad Jalan S/o Shri Chotte Lal, R/O Kedar Mal Chotte Lal, Cloth Market, Jhunjhunu (Raj.) 2. Settlement Commission Principal Bench, 4 th Floor, Lok Nayak Bhawan, Khan Market, New Delhi (through Secretary) ----Respondents D.B. Special Appeal Writ No. 1673 / 2011 1. Commissioner Of Income Tax-III, Jaipur. 2. Income Tax Officer, Ward No. 1, Jhunjhunu (Raj.) ----Appellants Versus 1. Shri Nawal Kumar Jalan S/o Shri Rajendra Prasad, R/O Kedar Mal Chotte Lal, Cloth Market, Jhunjhunu (Raj.) 2. Settlement Commission Principal Bench, 4 th Floor, Lok Nayak Bhawan, Khan Market, New Delhi (through Secretary) ----Respondents D.B. Special Appeal Writ No. 1675 / 2011 1. Commissioner Of Income Tax-III, Jaipur. 2. Income Tax Officer, Ward No. 1, Jhunjhunu (Raj.) ----Appellanta Versus 1. Prakash Chand Jalan S/o Shri Rajender Prasad Jalan, aged about 41 years, R/O Kedar Mal Chotte Lal, Cloth Market, Jhunjhunu (Raj.) 2. Settlement Commission Principal Bench, 4 th Floor, Lok Nayak Bhawan, Khan Market, New Delhi (through Secretary) ----Respondents For Appellant(s) : Mr. Sameer Jain (2 of 5) [SAW-1672/2011] HON'BLE MR. JUSTICE K.S. JHAVERI HON'BLE MR. JUSTICE INDERJEET SINGH Order 27/07/2017 Delay in filing appeals is condoned. applications u/s 5 of Limitation Act are allowed. In view of fact that same judgment was challenged before Division Bench in case of Commissioner of Income Tax vs. Hari Kishan Vijayvergia, 2011 (336) ITR 174 wherein this court 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 parties. Only assessee submitted written arguments, not Revenue. Written submissions were not filed by revenue. No time was granted by Settlement Commission even to file written submissions or for oral hearing due to paucity of time. As 31-3-2008 was cut off date fixed, hence, it was observed that it was not possible for Settlement Commission to provide opportunity of hearing to parties. No doubt about it that in Para 6 of orders there is reference of certain material and there is statement that additional amount has been paid. However, it is apparent from Para 5 of order that Settlement Commission has observed that it was not practicable to examine records which was mandatory to investigate case meaning thereby, to record evidence necessary for proper settlement. At same time, it has also been observed that giving opportunity of hearing to applicant, assessees and revenue as envisaged under section 245D(4) was not practicable for 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 action taken in flagrant violation of provisions under section 245D(4) of Act as it is not disputed that opportunity of hearing was not afforded. There was no time to give serious (3 of 5) [SAW-1672/2011] look to record and much less to record evidence. No enquiry was made. Thus, in our considered opinion, there is flagrant violation of provisions of section 245D(4) of Act. orders so passed are rendered nullity and liable to be set aside. Merely by mentioning of certain material without actively assessing what were statement etc., cannot be said to be compliance of provisions of section 245D(4) of Act. Any finding so recorded in Para 6 of order without hearing, without investigating and without deeply looking into record cannot be said to be legal and binding. procedural safeguards have not been observed as such findings recorded in Para 6 of orders of these 25 cases also cannot be permitted to survive. Senior Counsel has referred to objective of establishment of Settlement Commission by referring to decision in CIT vs. B.N. Bhattachargees (1979) 118 ITR 461 (SC) in which Apex Court has laid down that purpose of substituting method of investigative negotiation, just settlement and early eligibility by high-powered Commission for tier-upon-tier of long protracted litigation, where victory may be pyrrhic and futile, is ill- served by keeping out cases solely for reason that departmental appeals have been filed. It is not for court to explore intendment of legislation beyond language in which section is couched. Apex Court has also laid down that Settlement Commission is Tribunal. Its powers are considerable; its determination affects rights of parties; its obligations are quasi-judicial; orders it makes at every stage have tremendous impact on rights and liabilities of parties. Apex Court has also observed that it is not inappropriate to state that policy of law as disclosed in Chapter-XIX-A is not to provide rescue shelter for big tax- dodgers who indulge in criminal activities by approaching Settlement Commission. Settlement Commission will certainly take due note of gravity of economic offences on wealth of nation which Wanchoo Committee had emphasised and will exercise its power of immunisation 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 decision in CIT v. Om Prakash Mittal (2005) 273 ITR 326 (SC) to contend that Settlement Commissions power of settlement has to be exercised in (4 of 5) [SAW-1672/2011] accordance with provisions of Income-tax Act. Though Settlement Commission has sufficient elbow room in assessing income of applicant, it cannot make any order with term of settlement which would be in conflict with mandatory provisions of Act like quantum and payment of tax and interest. object of Legislature in introducing section 254C is to see that protracted proceedings before authorities or in courts are avoided by resorting to settlement of cases. In this process assessee cannot expect any reduction in amounts statutorily payable under Act. Reliance has also been placed upon decision of High Court of Bombay in Star Television News Ltd. (2009) 317 ITR 66 (Bom) in which Wanchoo Committees 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 high level machinery in administrating provisions. In our opinion, there is no doubt about it that Settlement Commission has been established with aforesaid objectives. At same time as observed by Apex Court in Om Prakash MittalCIT v. Om Prakash Mittal (2005) 273 ITR 326 (SC) Commission was bound to comply with provisions of statute. No doubt about it that there should not be protraction of settlement proceedings but at same time mandatory provisions are also required to be complied with. Merely under banner of no protraction of case, illegality or flagrant violation of provisions of Act cannot be permitted to survive. It was incumbent upon Settlement Commission to act in accordance with provisions under section 245D(4) of Act. There has been blatant violation of said provision in instant case. Even as per findings which are recorded in form of confession, violation of provision has been made as it was mandatory to comply with order of High Court. Orders were passed in due haste. However, High Court order never meant Settlement Commission to violate mandate of provisions of Act, it was incumbent upon Settlement Commission to pass appropriate order in accordance with law. It was incumbent upon Settlement Commission to follow strictly provisions enumerated in section 245D(4) and other provisions. Consequently, we find that these 25 cases of assessees are also required to be heard afresh by Settlement Commission and decided in accordance with law (5 of 5) [SAW-1672/2011] after duly following mandate of section 245D(4) of Act. 18. We are of opinion that no case is made out to interfere in appeals. Consequently, intra-court appeals, cross objections and stay applications are hereby dismissed. Let Settlement Commission make endeavour to decide cases in accordance with law as far as possible within period of six months from date of appearance of parties. No costs. In view of above, appeals stand dismissed. (INDERJEET SINGH),J. (K.S. JHAVERI),J. A.Sharma/32 Commissioner of Income-tax-III, Jaipur / Income-tax Officer, Ward No. 1, Jhunjhunu v. Rajendra Prasad Jalan / Settlement Commission Principal Bench