Case Law Details
DCIT Vs. Hitachi Power Europe GmbH (Madras High Court)
The power to be exercised by the Settlement Commission under sub-Section (2C) of Section 245D is within a period of fifteen days’ from the date of receipt of the report of the CIT. This provision gives power to the Settlement Commission to declare an application as invalid after affording an opportunity of hearing to the applicant. Under sub-Section (4) of Section 245D, the Commission after examination of the records and report of the CIT under sub-Section (2B) or sub-Section (3) of Section 245D and after affording an opportunity to the applicant and to the CIT to be heard either in person or through Authorized Representative and after examining such further evidence as may be placed before it, or obtained by it, the Settlement Commission may, in accordance with the provisions of the Act, pass such order as it deems fit on the matters covered by the application or any other matter relating to the case not covered by the application, but referred to in Thus, the procedure to be adopted by the Settlement Commission while exercising powers under sub-Section (2C) of Section 245D is summary in nature. No doubt, the applicant is given an opportunity of being heard.
The plain reading of sub-Section (2C) of Section 245D of the Act does not spell out an adjudicatory process. Therefore, if in the opinion of the Commission, based upon the report the issue needs to adjudicated, the application cannot be declared as invalid. Therefore, each case, which comes before the Commission has to be decided on its own facts.
In several cases, where search and seizure operations are conducted, where contraband is involved, where there is fraudulent practice adopted, the assessees approach the Commission. Even in those cases, if the Commission allows an application to be proceeded with under Section 245D(1), yet upon receipt of the report, the application can be declared invalid under sub-Section (2C) of Section 245D. In fact, the decision in Abdul Rahim (supra) is one such case.
We have referred to the four issues, which the applicant wanted to be settled by the Commission, which have been stated above and, the first among the four issues is with regard to the income earned from offshore supply of goods. The Commission was largely guided by the report of the CIT, who reported that the composite contract of offshore and onshore services are artificial bifurcated. The Settlement Commission held that the contention of the 1st respondent/writ petitioner that it is not a composite and it was a separate composite and the same was done by NTPC was held to be not fully true. In other words, the Settlement Commission appears to have accepted the fact that the contracts were bifurcated by NTPC, the entity which invited the tender, but the Commission would state that the bifurcation done by NTPC was only for financial reasons. The question is whether such a finding could lead to an application being declared as invalid under Section 245D(2C) on the ground that the 1st respondent/writ petitioner has failed to make full and true disclosure of income. In our considered view, the answer to the question should be a definite no, as this issue could not have been decided without an adjudication.
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