COMMISSIONER OF INCOME TAX (CENTRAL) CALCUTTA versus B. N. BHATTACHARJEE & ANR.

Citation: [1979] 3 S.C.R. 1133 · Decided: 04-05-1979 · Supreme Court of India · Bench: V.R. KRISHNA IYER · Disposal: Appeal(s) allowed

Cited by 3 judgment(s) · see the full citation network in Lexace

Judgment (excerpt)

1133 
COMMISSIONER OF INCOME TAX (CENTRAL) CALCUTTA 
A 
v. 
B. N. BHATTACHARJEE & ANR. 
May 4, 1979 
[V. R. KRISHNA IYER AND V. D. TULZAPURKAR, JJ.] 
Income Tax Act, 1961 (43 of 1961)-Ss. 245A-245M-Scope, purpose and 
\, /. obiect of-Procedure and powers of Settlement CommiJsion-Settlen1ent Com-
<1 ~ 
mLuioner whether a tribunal. 
' 
Words & Phrases-'Preferred an appeal'-S.245M(l) proviso 
!11co1ne 
Tax 
B 
Act, 1961-Meaninz of. 
C 
.. 
• 
'Interpretation of Statutes-Fiscal philosophy and interpretation technoloo 
to be on same wave length for legislative policy to find fulfilment in th~ enacted 
text. 
A large sum of Rs. 30 lakhs in cash having been recovered from the respon-
de-nt in pursuance to a search by the Income Tax Officials his assessments f0r 
the yearn 1962-63 to 1972-73 were reopened by the Department. The total tax 
burden on the respondent was over Rs. 30 Iakhs and an additional sum of Rs. 35 
lakhs was a..~sessed for the year 1973-74. The respondent was also prosecuted 
under s. 277 of the Income Tax Act. 
Appeals by the respondent to the Appellate Assistant Commissioner brought 
down the assessable inrome by about Rs. 10 Iakhs. 
D 
The resuondent and the department both appealed 
to 
the 
Income Tax 
E 
Appellate Tribunal, the former filing 12 appeals and the latter 10 appeal~. 
The respondent moved the Settlement Commission for composition under 
s. 245M. 
The assessee withdrew his appeals and the revenue deciar'ed their 
asse&Sments and appeal!! 'weak' and withdrew them. 
, 
The Settlem'ent Commission on receipt of the application under s. 245C 
acted under s. 245D ( 1) and called for a report from the appellant. 
The ap~ 
pellant reported that prosecution proceedings for concealment of income and 
also false verification in the return by the respondent were pending against the 
reipondcnt in the Magistrate's Court and that it was not a fit CMe to be pro~ 
ceeded with by the Commission. 
The Settlement Commission after some correspondence with the respondent 
and v;1ithout giving a hearing informed him that as the @Pellant had objected 
under s. 245D (1), the Settlement Commission did not allow the application 
to be proceeded with. 
The appellant thereupon moved the Income Tax Appellate Tribunal for 
restoration of its appeals although no specific provision enable ~uch a restora-
tion, the asssessee being entitled to apply for restoration under ~. 245M. 
The respondent urged the Settlement Commission to review its order as no 
hearing as such was given to him. The Settlement Commission yielded to hit; 
F 
G 
H 
/ 
1134 
SUPREME COURT REPORTS 
[1979) 3 S.C.R. 
A 
submission, reached the reverse oonclusion that the appellant's opposition to 
the composition notwithstanding, the application for settlement be considered 
on merits. 
The core controversy in the appeals to this Court were whether in vie'W 
of the withdrawal of the departmental appeals before the Income Tax Appellate 
Tribunal, the Commissioner is estopped from making a report under s. 2450(1) 
B 
proviso 2 to the Settlement Commission objecting to the application fro1n 
)' 
being proct:eded with. 
,... 
On behalf of the appellant it was contended tha.i: 
(a) 
th'ere was 
no 
./ 
po\vcr of review for the Commission, sinc'e it had declined to proceed with 
\ , 
the application for settlement and consequently the re-opening of the Settle-~-~ t 
n1ent proceedings was invalid, (b) even though the C.I.T. had withdrav.:n bis 
C 
appeals and thus facilitated the filing of an application under s. 245C no bar 
of cstoppel could be spelt out to forbid the Commissioner from exercising 
his statutory po\ver of withholding consent to the settl'ement proceedings and 
(c) the C.l.T.'s veto Wfl6 not subject to review or invalidation by the 
Settl~:­
ment Commission. 
Allowing the appeals 
D 
l-lELD 
1. 
The Settlement Commission should be inhibit'ed from proceed-
ing with the application of the assessee and the appeals by the assessee before 
the lnc·on1e Tax App'ellatc Tribunal must be revived and disposed of expedi-
tiou,Jy. 
[1164FJ 
2. The departmental appeals, having been admitted by the Commissionfr 
of Income Taix himself to be very weak and frivolous, should not be revived 
E 
as it \vill be only a waAte of public time <ind money. 
[1164G] 
3. If the Department files an appeal \'Chich it drops to enable an application 
before the Commission, then the proviso to s. 245M(l) does not debar the 
motion for settlement. 
[1l56C] 
4. Functionally spea

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