Compliance with procedural requirements is essential for orders issued by statutory bodies such as the Settlement Commission.

JUDGMENT :

M.R. Shah, J.

1. Feeling aggrieved and dissatisfied with the impugned judgment and order dated 29.03.2017 passed by the High Court of Judicature at Allahabad, Lucknow Bench Lucknow, by which the Division Bench of the High Court has dismissed the Writ Petition No. 4858 of 2008 preferred by the appellants herein, the original writ petitioners have preferred the present Appeals. The subsequent order passed by the High Court dismissing the review application is also the subject-matter of the present Appeals.

2. The facts leading to the present Appeals in a nut shell are as under:

i) That a search was conducted under Section 132 of the Income Tax, Act, 1961 (for short “the Act”) on the business premises as well as the residence of the partners.

ii) Notices under Section 153A were issued to all the appellants for the Assessment Years 1998-1999 to 2004-2005.

iii) The return of income was filed by the appellants under Section 153A of the Act for the aforesaid Assessment Years.

iv) An application under Section 245C(1) of the Act was filed by the appellants before the Income Tax Settlement Commission (for short “the Settlement Commission”).

v) As per Section 245HA, inserted by the Finance Act, 2007, the application was to be decided by the Settlement Commission on or before 31.03.2008, failing which the proceedings before the Settlement Commission shall stand abated.

vi) The High Court, by way of an interim order, directed the Settlement Commission to dispose of the application under Section 245D of the Act by 31.03.2008.

vii) By order dated 31.03.2008, the Settlement Commission disposed of the proceedings and settled the undisclosed income at Rs. 59,00,000/-. The Settlement Commission also passed an order that the CIT/AO may take such action as appropriate in respect of the matters, not placed before the Commission by the applicant, as per the provisions of Section 245F(4) of the Act.

The Settlement Commission passed the following order:-

“In the abovementioned cases, the Hon’ble High Court of Uttar Pradesh at Lucknow has passed orders dated 19.03.2008 directing the Settlement Commission to complete the proceedings u/s 245D(4) by 31.03.2008.

2. The Rule 9 Report in this case has been received.

3. In all, the Principal Bench of the Commission has till 26.3.2008 received more than 325 orders from various High Courts in the month of March, 2008, directing the Principal Bench to complete the cases by 31.3.2008.

4. This would involve more than 1500 assessments. The Settlement Commission deals only with the assessments which involve complexity of investigation and the application is intended to proved quietus to litigation. For example, in one group of cases where 23 applications are involved, the paper book, which has been filed before the Settlement Commission runs into thirty thousand pages. It goes without saying that sufficient and proper opportunity is required to be given both to the applicant and the Commissioner of Income Tax for arriving at a proper settlement.

5. At this juncture, it is not practicable for the commission to examine the records and investigate the case for proper settlement. Even giving adequate opportunity to the applicant and the department, as laid down in section 245(D)(4) of Income Tax Act, 1961 is not practicable. However, to comply with the directions of the Hon’ble High Court, we hereby pass an order u/s 245D(4) of Income Tax Act, 1961, as under:

6. The undisclosed income is settled as under:

7. The CIT/AO may take such action as appropriate in respect of the matters, not placed before the Commission by the applicant, as per the provisions of section 245F(4) of IT Act ,1961.

8. Prayer