CIT vs. Smt. Diksha Singh; 350 ITR 157 (All)
The Settlement Commission passed an order u/s. 245D(4), whereby the undisclosed income of the assessee was settled at Rs. 43 lakh for the assessment years under consideration. While passing the order, the Settlement Commission observed in paragraph 7 as follows:
“The Commissioner of Income-tax/Assessing Officer may take such action as appropriate in respect of the matter not placed before the Commission by the applicant, as per the provisions of section 245F(4) of the Income Tax Act, 1961”
The Assessing Officer issued notice and finally estimated the income at Rs. 75,84,900/- in addition to the agricultural income of Rs. 1,75,000 and made the additions accordingly. The CIT(A) and the Tribunal deleted the addition.
On appeal by the Revenue, the Allahabad High Court upheld the decision of the Tribunal and held as under:
“i) A plain reading of section 245D r.w.s. 245F makes it clear that once a matter falls within the domain of the Settlement Commission, no authority of the Income-tax Department will have jurisdiction to asses tax for the same financial year and the finding of the Settlement Commission shall be conclusive and final u/s. 245-I.
ii) A mere observation of the Settlement Commission will not empower the assessing or appellate authority to reassess on any ground, whatsoever, for the same financial year with regard to which the Settlement Commission had exercised jurisdiction and given a finding.
iii) The Legislature in its wisdom had conferred power on the Settlement Commission to reopen the proceedings in certain circumstances and to deal with the situation in the event of commission of fraud. Once power has been conferred on the Settlement Commission itself to deal with the contingency, such power cannot be delegated directly or indirectly to any authority of the Income-tax Department. The discretionary administrative power entrusted by the statute to a particular authority cannot be further delegated except as otherwise provided in the statute. In other words, when the Act prescribes a particular body or officer to exercise a power, it must be exercised by that body or officer and none else unless the Act by express words or necessary implication permits delegation, in which event, it may also be exercised by the delegate if delegation is made in accordance with the terms of the Act but not otherwise.
iv) The Settlement Commission cannot make an observation delegating its power to the assessing authority to reopen the case in certain circumstances for the same financial year, when it had been conferred wide power to deal with the situation under the statutory provisions.
v) The Tribunal has rightly decided the appeal on the sound principles of law. The appeal being devoid of merit is hereby dismissed.”
