12. Komalkant Fakirchand
Sharma vs. Dy. CIT; [2019] 417 ITR 11 (Guj.) Date of order: 6th
May, 2019 A.Y.: 2011-12
Reassessment –
Settlement of cases – Sections 147, 148, 245C, 245D(4) and 245-I of ITA, 1961 –
Order passed by Settlement Commission u/s 245D(4) – Notice for reassessment u/s
148 in respect of issues covered by such order – Not valid
The assessee, an individual, had filed his return of income for the A.Y.
2011-12. A search took place at the premises of the assessee on 17th
February, 2012. Thereafter, the assessee filed an application u/s 245C of the
Income-tax Act, 1961 before the Settlement Commission. The application was
admitted and the Settlement Commission passed an order u/s 245D(4) of the Act
on 12th January, 2015. Subsequently, the AO issued a notice u/s 148
of the Act for reopening the assessment for the A.Y. 2011-12.
The assessee challenged the validity of the notice by filing a writ
petition. The Gujarat High Court allowed the writ petition and held as under:
‘(i) There is a difference between
assessment in law [regular assessment or assessment u/s 143(1)] and assessment
by settlement under Chapter XIX-A. The order u/s 245D(4) of the Income-tax Act,
1961 is not an order of regular assessment. An application u/s 245C is akin to
a return of income, wherein the assessee is required to make a full and true
disclosure of his income, and the order u/s 245D(4) of the Act is in the nature
of an assessment order. Therefore, the assessment of the total income of the
assessee for the assessment year in relation to which the Settlement Commission
has passed the order u/s 245D(4) of the Act stands concluded and in terms of
section 245-I of the Act, such order shall be conclusive as to the matters
stated therein and no matter covered by such order shall, save as otherwise provided
in Chapter XIX-A, be reopened in any proceedings under the Act or under any
other law for the time being in force.
(ii) Therefore, once an order is
passed by the Settlement Commission u/s 245D(4), it is conclusive insofar as
the assessment year involved is concerned. The only ground on which an order of
settlement made u/s 245D of the Act can be reopened is, if it is subsequently
found by the Settlement Commission that the order u/s 245D(4) of the Act had
been obtained by fraud or misrepresentation of facts. Therefore, once an order
has been passed u/s 245D of the Act by the Settlement Commission, the
assessment for the year stands concluded and the AO thereafter has no
jurisdiction to reopen the assessment.
(iii) The petition succeeds and
is, accordingly, allowed. The impugned notice u/s 148 of the Act is hereby
quashed and set aside.’
