DIRECT TAXES CODE BILL 2010- A DISCUSSION ON INCOME TAX SETTLEMENT COMMISSION
1. The Direct Code Bill 2010 is in public domain now, after a long debate and discussion on the Draft DTC put on public domain in August 2009. The Chapter of INCOME TAX SETTLEMENT COMMISSION having no space in the Draft DTC and has been made part of Direct Taxes Bill 2010, therefore requires proper public debate and sufficient discussions as to the Chapter XVI of DTC Bill 2010.
2. The DTC Bill 2010 provides the constitution of Settlement Commission as under;
(1) The Central Government shall constitute a Commission to be called the Income tax Settlement Commission for the settlement of cases under this Chapter.
(2) The Settlement Commission shall consist of a Chairperson and as many Vice-Chairpersons and other members as the Central Government deems fit and shall function within the Department of the Central Government dealing with direct taxes.
(3) The Chairperson, Vice-Chairperson and other members of the Settlement Commission shall be appointed by the Central Government from amongst the officers of the Indian Revenue Service who have served for at least twenty-eight years in the service, including at least five years in the rank of Commissioner or above.
3.The above section provides for selection of member of the Settlement Commission are to be selected from the Income Tax Department who possess certain numbers of years of service and shall function within the Department Of Revenue.
4. The Settlement Commission is held to be a Tribunal by the various High Courts of India in cases connected to Income Tax Act 1961. Therefore the Income Tax Settlement is a Tribunal, quasi judicial authority with judicial powers vested in it to adjudicate the issues arising out of law as well as facts under the DTC and the order also is in the nature of conclusive one. The Supreme Court Of India decision in the case of Pareena Swarup Vs Union Of India ( WP.634 of 2007 ) had dealt the issues in constitution of Tribunal such as qualification of members, selection of members, separation of judiciary from executives etc.,.
In the context of above discussion as to the constitution of Settlement Commission under the Direct Taxes Code requires further more debate and discussion.
1. The application to Settlement Commission is provided with certain monetary limits segregating the Assessees as one subjected to Search/seizure operation and others. The threshold limits are provided as under:
(b) the additional amount of income-tax payable on the income disclosed in the application exceeds,—
(i) fifty lakh rupees in a case where proceedings for assessment or reassessment way financial year have been initiated in consequence of an action under section 135 or section 136, as the case may be;
(ii) ten lakh rupees in any other case; and
2. The scope to file an application is also provided to be once in life time of the Assessee.
3.The scope having been provided once in life time, the threshold requires more liberal terms so that more assessees could avail the benefits of Settlement Commission and more so of equity.
The above aspect of monetary limits too requires further more discussion and debate.
Author: CA N.Murali