DEEN DAYAL DIDWANIA Vs. UNION OF INDIA

JUDGEMENT

(1.) THIS petition and the connected petitions which are similar have been heard after the issue of a show -cause notice. The first prayer in the petition is to direct the Settlement Commission to proceed expeditiously with the application moved by the petitioners under S. 245C of the IT Act, 1961. The second prayer seeks a direction to the ITO, Central Circle III, Madras, not to proceed with the case. The counter -affidavit and documents filed with the counter -affidavit as well as the contentions on behalf of the respondents have disclosed why there is a delay by the Settlement Commission. S. 245D of the Act contemplates a report being received from the CIT on the basis of which the Settlement Commission can decide whether to proceed with the application or reject the same. In these cases, a supplementary application appears to have been made by the petitioners on the basis of which a second report was called for from the CIT and that is why there is a delay. As the provision gives discretion to the Settlement Commission to proceed with the application or to reject the same, we do not see how we can interfere, but, we hope that the Settlement Commission can decide very soon whether to proceed with the application or reject the same.

(2.) IT is the second prayer which has led to most of the contentions before us. The question is whether the IT authorities can proceed with the assessment proceedings while the Settlement Commission is contemplating whether to proceed with the application or reject the same. We have examined the provisions of the Act and do not find that there is any bar on the ITO from proceeding with the assessment of any pending case. Reliance was placed mainly, if not solely, on the provisions of the first Expln. to S. 153(3), which provides that certain periods have to be excluded in computing the limitation period for completing an assessment proceeding. Clause (v) of this Explanation reads :

(3.) IT is unnecessary to amplify our reasons by a full analysis of the various sections of the Act dealing with settlement. However, we are of the view that in case the Settlement Commission does proceed with the application, then the Settlement Commission will have full power to pass any order it deems fit regarding the settlement. The assessment order or orders if passed will be no impediment to the Settlement Commission in exercising its powers if it decides to exercise them. On the other hand, if the Settlement Commission decides not to proceed with the application, there is a distinct possibility of the Department not being able to realise the taxes in the circumstances of this case. So, we find that we are unable to interfere both on the ground of there being no statutory provision to justify a stay of proceedings before the IT authorities and also because the circumstances of the case would not justify such an act.