The conditions for filing of an application before the Settlement Commission and the time for disposal of an application by the Settlement Commission are proposed to be modified. The changes proposed are as under:-

A. Under the existing provisions of section 245A(b), the term “case”, in relation to which an application can be made is defined as any proceeding for assessment, of any person in respect of any assessment year or assessment years which may be pending before an Assessing Officer on the date on which an application is made to the Settlement Commission. However, it excludes, among others, proceedings for assessment or reassessment resulting from a search or as a result of requisition of books of account or other documents or any assets, initiated under the Act.

It is now proposed to include proceedings for assessment or reassessment resulting from search or as a result of requisition of books of account or other documents or any assets, within the definition of a “case” which can be admitted by the Settlement Commission.

It is also proposed to amend the Explanation to section 245A(b) to specify the date on which the proceedings for assessment or reassessment shall be deemed to have commenced and concluded in the case of a person whose income is being assessed or reassessed as a result of search or as a result of requisition of books of account or other documents or any assets.

Similarly, consequential amendments are also proposed to be made in section 22A of the Wealth-tax Act. These amendments are proposed to take effect from 1st June, 2010.

B. Under the existing provisions of section 245C of the Income-tax Act, an application can be filed before the Settlement Commission, if the additional amount of income-tax payable on the income disclosed in the application exceeds three lakh rupees.

It is proposed to substitute the proviso to section 245C, so as to provide that an application can be filed before the Settlement Commission, in cases where proceedings for assessment or reassessment have been initiated as a result of search or as a result of requisition of books of account or other documents or any assets, if the additional amount of income-tax payable on the income disclosed in the application exceeds fifty lakh rupees. It is further proposed that, in other cases, an application can be made before the Settlement Commission, if the additional amount of income-tax payable on the income disclosed in the application exceeds ten lakh rupees.

These amendments are proposed to take effect from 1st June, 2010.

C. Under the existing provisions of section 245D(4A) of the Income-tax Act, the Settlement Commission shall pass an order within twelve months from the end of the month in which the application was made.

It is proposed to amend clause (ii) of sub-section (4A) so as to provide that the Settlement Commission, shall, in respect of an application filed on or after 1st June, 2007 but before 1st June, 2010, pass an order within the said period of twelve months.

It is further proposed to insert a new clause (iii) in sub-section (4A) so as to provide that the Settlement Commission shall, in respect of an application made on or after 1st June, 2010, pass an order within eighteen months from the end of the month in which the application is made.

Consequential amendments on similar lines are proposed to be made in section 22D of the Wealth-tax Act.

These amendments are proposed to take effect from 1st June, 2010.

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0 responses to “Budget 2010-11: Amendments related to Settlement Commission provisions”

  1. n murali says:

    If DTC contains the provisions to the chapter of settlement commission requires to be challenged as to composition members r only from dept.

  2. n murali says:

    If DTC is in place the chapter of ITSC requires to be challenged as it contaibs only officers of income tax dept,

  3. n murali says:

    If DTC the provisions to the chapter of settlement commission requires to be challenged.

  4. neha seth says:

    Budget 2010-2011, has provided great relief to the assessee who has been assessed under search cases where the assessment is still pending . they can now conveniently approach Settlement Commission and can be in a better way to fight for the case.

  5. TDS says:

    It wouuld have been better to revive the scheme as originally conceived and framed, with the inclusion in the purview of the scheme the search cases too. After all, it is not possible for the department to handle the workload and collect the revenue. The only thing required is to ensure that persons of known integrity are made members of the commission. The falling standards of pecuniary and intellectual dishonesty of the members appointed on unknown grounds over the last 15-16 years, coupled with some members’ spastic mentality of their days as ITOs/purely revenue officers and not behaving as members of a high powered bodies dealing with an important legislation that caused the downfall of this low lying institution. The other cause, apart from dishonesty, was the growing tendency of constotuting Special Benches of 5/7/9 members as if the ITSC were the apex court! Honesy in monetary matters is as relevant as honesty of purpose is, and particularly intellectual honesty.
    In a recent case, an order of 40 pages was ready in less than 12 hours after the hearing of a case in Chennai and there is an impression that there was a lot of deliberate attempt at saving one group of businessmen as against another!

  6. murali n says:

    The search cases where assessments are still pending could also approach settlement commission on or after 1.6.2010 as the amendment to section 245A envisages

  7. Vijay Kumar says:

    The FM has provided a big relief to tax evaders also by this provision. Once an application is made to Settlement Commission, the AO is precluded from examining even the normal and legal disallowances in a case, even if the search had not taken place. Thank you, finance minister for proposing this bonus to the tax evaders.

  8. murali n says:

    Sir, By the amendment to section 245A(b)the door of settlement commission is opened a little. It is necessary to note once assessment pursuant to search is completed, such assessee can not approach settlement commission. However the amendment as above is welcome move and the revival of Settlement Commission can be expected as of old days in DTC.

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