COMMISSIONER OF INCOME TAX, MADRAS versus EXPRESS NEWSPAPER LTD.

Citation: [1994] 1 S.C.R. 64 · Decided: 11-01-1994 · Supreme Court of India · Bench: J.S. VERMA, YOGESHWAR DAYAL, B.P. JEEVAN REDDY

Cited by 1 judgment(s) · see the full citation network in Lexace

Judgment (excerpt)

A 
B 
c 
D 
E 
F 
COMMISSIONER OF INCOME TAX, MADRAS 
v. 
EXPRESS NEWSPAPER LTD. 
JANUARY 11, 1994 
(J.S. VERMA, YOGESHWAR DAYAL AND 
B.P. JEEVAN REDDY, JJ.] 
Income-tax Act, 1961: Sections 245-A(b) and 245- C(l}-Settlement 
Commissiott-Settlement of Cases-Losses returned found to be false and 
. fabricated and hence not accepted-Assessment made of a huge amount-As-
sessee filing application for settlement and offering part of the losses towards 
taxable income-Held: Application neither disclosed any undisclosed income 
nor the manner of deriving the same-Hence not maintainable-Settlement 
Commissiott-lurisdiction ott-Scope of proceedings before it-Not only in-
come disclosed but the entire case for the relevant assessment year. 
Sections 245-D( 1-A) & 245~C-Sett/ement of case~Application sub-
mitted at the stage when concealment of income established on the basis of 
voluminous material collected, inquiries and investigation-Not to be 
proceeded with-Expression "has been established in relation to the 
case''-Meaning and object of-Relevant materials to· decide whether to 
proceeds with the case or not-Include even the materials collected after the 
filing of application. 
Chapter XIX-A-Settlement of cases--Provisions ·in the chapter to be 
construed consistent with the overall scheme and object of the Act. 
Interpretation of Statutes : Hannonious construction-Construing of 
provisions of a statute-To be consistent with the overall scheme and object 
of the Statute. 
G 
Words and phrases : "case''-l'has been established in relation to the 
.case''-Meaning of-ln the context of the provisions in Chapter XIX-A of the 
Income-tax Act, 1961: 
In the revised return for the assessment year 1985-86 the respon-
dent-assessee showed certain losses which were found to be false and 
H . fabricated and so the Assessing Officer rejected the claim and asses~ed 
64 
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C.l.T. v. EXPRESS NEWSPAPER 
65 
and income at a huge amount. The assessee's appeal was dismissed by the A 
Commissioner of Income-tax(Appeals). While the said appeal was pend-
ing, the assessee approached the Settlement Commission for settlement of 
the cases relating to the assessment year 1985-86 as also for the subsequent 
three assessment years in respect of which assessments were pending. For 
these years, the assessee offered for tax a part of the amount claimed by B 
him as losses. 
Before the Settlement Commission, Revenue raised objections 
against entertaining the said applicaton on the ground that it had in 
possession documents and materials to show that the assessee had 
fraudulently claimed losses under various hea~s for the assessment years C 
1985-86, 1986-87 and 1987-88 and for the assessment year 1988-89; that 
notice under section 143(2) of the Act was sent to the assessee and it did 
not respond. However, after hearing both the parties, the Settlement 
Commission allowed the application of the assessee. Aggrieved by this, 
Revenue preferred the present appeals. 
Allowing the appeals and setting aside the order of the Settlement 
Commission, this Court 
HELD : 1.1. "Case" for the purpose of Chapter XIX-A of the Income 
D 
tax Act, 1961 means a proceeding relating to one or more assessment years. E 
It takes in a proceeding for assessment or re-assessment. Similarly, it may 
be a proceeding pending at the stage of. assessment or in appeal or 
revision. [73-E] 
1.2. Once an application is allowed to be proceeded with by the 
Commission, the proceedings pending before any authority under the Act F 
relating to that assessment year has to be transferred to the Commission 
and the entire case for that assessment year will be dealt with by the 
Commission itself. The words "at any stage of a case relating to him" only 
make it clear that the pendency of proceedings relating to that assessment 
year, whether before the Assessing Officer or before the Appellate or 
Revisional Authority, is no bar to the filing of an application under Section G 
245-C so long as the application complies with the requirements of the said 
Section. [74-E-F] 
2.1. By the Finance Act, 1979 the second proviso to Section 245-D(l) 
was deleted. The main limb of sub-section (1) and the first proviso, how- H 
66 
SUPREME COURT REPORTS 
[1994) 1 S.C.R. 
A 
ever, remained untouched. In place of the second proviso, sub-section (lA)-
was introduced. The effect of this Amendment was that the Commissioner's 
objection ceased to be final and conclusive. The proviso to sub-s

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