1. Time-Limit – DTC has kept the time limit for passing final settlement orders under Section 245D(4) at 18 months, as in the IT Act, 1961, however has increased various internal time-limits as under:
|Under IT Act 1961||Under DTC|
|Issue of Notice u/s 245D||7 Days||10 Days|
|Hearing u/s 245D||10 days||20 days|
|CIT’s report on validity u/s||30 days||45 days|
|CIT’s further report (Sec. 276 of DTC)||90 days||120 days|
2. Definition of “case” as in Clause (b) of section 290.
(a) The code widens the coverage of the work of Settlement Commission, by also including the proceedings pending u/s 147. The Code however, bars those assessment/ reassessment proceedings during the course of which a show cause notice for institution of Prosecution proceedings has been issued.
(b) Under the Code, an applicant who had not filed return of income for any assessment year is not eligible for making application for that Assessment Year.
(c) The Code does not define the date from which an assessment or reassessment proceeding can be considered to be pending.
3. As per DTC, a Member can function as V-C only if appointed as V-C, and not by virtue of being the senior-most Member of a Bench.
4. Admission of application u/s 275
There is no change in respect of time given to the Commissioner to submit the report, which remains at 15 days. However, the Code binds the Commission not to pass an order about the validity of the application, till it receives CIT’s report. The Code also allows an opportunity to the CIT, before passing order about validity.
5. Further inquiry u/s 276
The Code allows the Commission to direct the CIT to conduct inquiry, etc. on issues suggested by him in an application before the Commission.
6. Revival of proceeding u/s 280
Comments: The revival of proceeding in case of settlement having been treated as void, has been made from admission stage, while earlier it was from the stage, where the application was allowed to be proceeded with.
The period allowed to the AO to complete proceedings has been reduced from 24 months to 21 months (from the end of the financial year in which the settlement has been treated as void).
7.Exclusive Jurisdiction of the Commission u/s
As per DTC, there shall be concurrent jurisdiction of the Commission and of the CIT till an order deciding the validity of application has been passed by the Commission, after which only the exclusive jurisdiction of the Commission shall commence. Earlier the exclusive jurisdiction of the Commission was from the date an application was filed with the Commission.
8. Bar on subsequent application
The DTC proposes to bar those cases to file subsequent application, where a Search and Seizure operation has taken place. Further, similar to the provisions of the Income Tax Act 1961, it bars those cases from subsequent application, where during the settlement proceedings, penalty has been levied o prosecution has been filed. The DTC however allows other cases to file subsequent application, as a departure from the existing provisions under the Income Tax Act, 1961, which do not allow an applicant to file subsequent application, where he has filed the application on or after 1st day of June, 2007.