Thursday, May 14, 2015

Settlement Commission Rules

In exercise of the powers conferred by sub- section (7) of section 245F of the Income-tax Act, 1961 (43 of 1961), and in supersession of the Income-tax Settlement Commission (Procedure) Rules, 1987, except as respects things done or omitted to be done before such
supersession, the Income-tax Settlement
Commission hereby makes the following rules,namely :—
Short title and commencement.
1. (1) These rules may be called the Income- tax Settlement Commission (Procedure) Rules, 1997.
(2) These shall come into force on the date of their publication in the Official Gazette. Definitions
2. In these rules, unless the context otherwise requires,—
(i)  “Act” means the Income-tax Act,
1961 (43 of 1961);
(ii)  “annexure” means the annexure to
the application in Form No. 34B, set out
in Appendix II to the Income-tax Rules,
1962;
(iii)  “applicant” means a person who
makes an application to the Commission
under sub-section (1) of section 245C to
have a case relating to him settled;
(iv)  “authorised representative” means,—
(a)  in relation to an applicant, except where such applicant is required under any of the provisions of Chapter XIX-A of the Act to attend in person, a person who
would be entitled to represent him
before any income-tax authority or the Appellate Tribunal under section 288; (b)  in relation to a Commissioner, a
person,—
(i)  authorised in writing by the Commissioner or the Chief Commissioner; or
(ii)  duly appointed by the Central Government as authorised representative or duly authorised by the Central Board of Direct Taxes to appear, plead and act for the Commissioner in any proceeding before the Commission;
(v)  “Commission” means the Income-tax
Settlement Commission constituted under
sub-section (1) of section 245B and
includes, where the context so requires,
any Bench exercising or discharging the
powers or functions of the Commission;
[ (vi) “Officer of the Commission” means
Secretary, Director of Income-tax
(Investigation), Additional Director of
Income-tax (Investigation), Joint Director
of Income-tax (Investigation), Deputy
Director of Income-tax (Investigation)
and Assistant Director of Income-tax
(Investigation). ]
(vii) “Secretary” means the Secretary of
the Commission and includes an
Administrative Officer [ and a
superintendent] ;
(viii)  “Section” means a section of the
Act;
(ix)  “Settlement application” means an
application made by a person to the
Commission under sub-section (1) of
section 245C to have a case relating to
him settled;
(x)  all other words and expressions used
in these rules and not defined but defined
in the Act, shall have the same meaning
respectively assigned to them in the Act.
Language of the Commission.
3. (1) All pleadings before the Commission may, at the option of the applicant, be in Hindi or in English.
(2) All orders and other proceedings of the
Commission may, at the option of the
Commission, be in Hindi or in English.
Signing of notices, etc.
4. (1) Any requisition, direction, letter,
authorisation, order or written notice to be
issued by the Commission shall be signed by the Chairman or a Vice-Chairman or any other Member of the Commission or by the Secretary (or by any other officer of the Commission).
(2) Nothing in sub-rule (1) shall apply to any requisition or direction which the Commission may, in the course of the hearing, issue to an applicant or a Commissioner or an authorised
representative personally.
Procedure for filing settlement application.
5. [ (1) A settlement application shall be made by the applicant in person or his authorised representative, to the Secretary at the headquarters of the Commission at New Delhi
or of the Bench within whose jurisdiction his case falls or to an officer authorised in this behalf by the Secretary, or shall be sent by registered post addressed to the Secretary, or to such officer. ]
(2) A settlement application sent by post under sub-rule (1) shall be deemed to have been presented to the Secretary or the officer authorised by the Secretary on the day on which it is received in the office of the Commission.
[ (3) The application shall be accompanied by a copy of self (-) attested challans or other
documents as evidence in respect of payment of tax and interest by the applicant. ]
[6. Report of the Commissioner under sub- section (2B) of Section 245D.
The Commissioner shall furnish seven copies of report referred to in sub-section (2B) of Section 245D, to the Commission and one copy to the applicant simultaneously. ]
[Preparation of paper books, etc.
7. (1) If the applicant proposed to refer to or rely upon any documents or statements or other papers, during the course of hearing under sub-section (4) of Section 245D of thecAct, he may submit seven copies of a paper
books containing such papers duly indexed and numbered, within thirty days of the receipt of an order under sub-section (2C) of Section 245D, or within thirty days of the date by which
the application was required to be declared invalid but has not been so declared :
Provided that the Commission may, in
appropriate cases, condone the delay and
admit the paper book.
(2)If the Commissioner proposes to refer
to or rely upon any documents or statements or other papers during the course of hearing under sub-section (4) of Section 245D of the Act, he may submit seven copies of a paper book containing such papers duly indexed and numbered along with his report referred to in
rule 9.
(3)The papers referred to in sub-rules (1)
and (2) must be legibly written or type-written in double space or printed and each paper shall be certified as a true copy by the part filing the same, or his authorised representative and indexed in such a manner as to give a brief description of the documents,
with page numbers and the authority before whom it was filed. ] Filing of affidavit.
8. Where a fact, which is not borne out by or is contrary to the record relating to the case, is alleged in the settlement application (including the annexure and the statement or other
documents accompanying such annexure), it
shall be stated clearly and concisely and
supported by a duly sworn affidavit.
[Commissioner’s further report
9. (1) Where an application has not been
declared invalid under sub-section (2C) of
Section 245D or an application has been
allowed to be further proceeded with under
sub-section (2D) of Section 245D, the
information contained in the annexure and in
the statements and other documents
accompanying such annexure shall be sent to
the Commissioner by the Commission with the
direction that the Commissioner shall furnish a
further report in seven copies within forty-five
days of the receipt of said annexure or within
such extended period as may be allowed by the
Commission on a request made by the
Commissioner.
(2)    If the Commissioner fails to furnish his
report on or before the expiry of the specified
period of forty-five days or within further
extended period as the Commission may allow,
as the case may be, the Commission may
proceed to hear the case without such report.
(3)   A copy of the report of the Commissioner
under sub-rule (1) of rule 9 shall be sent to the
applicant by the Commission.
Applicant’s Comments on Commissioner’s
report under rule 9.
9A. (1) The applicant may furnish comments on
the Commissioner’s report received under rule
9 within fifteen days of the receipt of the copy
of the said report by him or within such
extended period as may be allowed by the
Commission on a written request made by the
applicant.
(2)   The comments of the applicant shall be
accompanied by a paper book in support
thereof, having the specifications referred to in
rule 7.
(3)   If the applicant fails to furnish comments
on or before the expiry of the specified period
of fifteen days or within further extended period
under sub-rule (1), the Commission may
proceed further with the case without such
comments. ]
Date and place of hearing of application to be
notified.
10. On receipt of the Commissioner’s further
report, if any, referred to in rule 9, the
Commission shall notify to the applicant and
the Commissioner the date and place of
hearing of the application.
Sitting of Bench.
11. A Bench shall hold its sittings at its
headquarters. The Bench may, however, at the
discretion of the Presiding Officer, hold its
sittings at any place in its jurisdiction notified
by the Commission.
Powers of a Bench.
12. A Bench shall dispose of such settlement
applications or matters arising therefrom as
the Chairman may by general or special order
direct.
[Constitution of Two-member bench.
12A. Where one of the member (whether such
person be the Presiding Officer or other
member of the bench) is unable to discharge
his function on the bench under the
circumstances referred to in sub-section (5) of
Section 245BA, the remaining members with
the approval of the Chairman or the Vice-
Chairman, as the case may be, may function as
a bench. ]
Constitution of Special Bench
13. (1) The Chairman may, for the disposal of
any particular case, constitute a Special Bench
consisting of at least five Members drawn from
all the Benches of the Commission.
(2) The Special Bench shall be presided over
by the Chairman or a Vice-Chairman.
(3) If the Members of the Special Bench are
equally divided, they shall state the point or
points on which they differ and make a
reference to the Chairman who shall refer the
case for hearing on such point or points by one
or more of other Members of the Settlement
Commission and such point or points shall be
decided according to the opinion of the
majority of the Members of the Settlement
Commission who have heard the case.
(4) Notwithstanding anything contained in the
foregoing provisions of this rule, if one or more
persons constituting the Special Bench
(whether such person is the Presiding Officer or
any other Member of the Special Bench) are
unable to function in the Special Bench owing
to illness or any other cause or in the event of
occurrence of a vacancy either in the office of
the Presiding Officer or in the office of one or
other Members of the Special Bench, the
remaining Members, if more than three may
function as the Special Bench, and the senior
most of the remaining Members shall act as
the Presiding Officer of the Special Bench.
Filing of authorisation.
14. An authorised representative appearing for
the applicant at the hearing of an application
shall file before the commencement of the
hearing a document authorising him to appear
for the applicant and if he is a relative of the
applicant, the document shall state the nature
of his relationship with the applicant, or if he is
a person regularly employed by the applicant,
the capacity in which he is at the time
employed.
Verification of additional facts.
15. Where in the course of any proceedings
before the Commission any facts not contained
in the settlement application (including the
annexure and the statements and other
documents accompanying such annexure) are
sought to be relied upon, they shall be
submitted to the Commission in writing and
shall be verified in the same manner as
provided for in the settlement application.
Proceedings not open to the public.
16. The proceedings before the Commission
shall not be open to the public and no person
(other than the applicant, his employee, the
concerned officers of the Commission or the
Income-tax Department or the authorised
representatives) shall, without the permission
of the Commission, remain present during such
proceedings.
Publication of orders of the Special Bench.
17. The Chairman may, at his discretion, direct
the publication of orders or portions containing
the rulings of the Special Bench with such
modifications as to names and other
particulars therein, as he may deem fit.
Adjournment of hearings.
18. The Commission may, on such terms as it
thinks fit and at any stage of the proceedings,
adjourn the hearing of the application or any
matters arising therefrom.
Special provisions in respect of settlement
applications made before 1st day of October,
1984.
19. (1) Where, in respect of a settlement
application made before the 1st day of October,
1984, an order is passed by the Commission
under sub-section (1) of section 245D of the
Act allowing the application to be proceeded
with, a notice shall be issued by the
Commission to the applicant requiring him to
furnish in quintuplicate :—
(a)  a full and true statement of facts
regarding the matters to be settled
(including the manner in which any
income disclosed or proposed to be
disclosed by the applicant has been
derived); and where the settlement
involves determination of income,
accompanied with annexures containing :
(i)  computation of total income of
the applicant for the assessment
year or years to which the
settlement application relates, in
accordance with the provisions of
the Act;
(ii)  copies of manufacturing
account or trading account or both,
as the case may be, profit and loss
account or income and expenditure
account or any other similar
account, as the case may be, and
balance sheet; and
(iii)  in the case of:—
(a)  a proprietary business or
profession, copy of the
personal account of the
proprietor;
(b)  a firm or association of
persons or body of
individuals, copies of the
personal accounts of the
partners or members thereof,
as the case may be; and
(c)  a partner of a firm or a
member of an association of
persons or body of
individuals, copies of the
personal account of such
partner or member in the firm
or association of persons or
body of individuals, as the
case may be;
(b)  the terms of settlement sought for by
the applicant.
(2) The statement of facts, the annexures
thereto and the terms of settlement shall each
be signed separately by the applicant and the
statement of facts shall be verified in the
following manner, namely :—
“I………………………………………………………………………………
…………………………………………………………………………………
…………………….., son/daughter/wife of
(Name in full and in block letters)
:………………………………………………..solemnly declare
that to the best of my knowledge and belief, the
information given in this statement of facts and
the annexures accompanying it is correct and
complete and other particulars shown therein
are truly stated. I further declare that I am
making this statement in my capacity as
…………………………………………………………………………………
…………. and that I am competent to make
(designation)
this statement of facts and to verify it.
Place :………………….. …………………………
Date :…………………… Signature
(3) Where a fact which cannot be borne out by
or is contrary to the record relating to the case
is alleged in the statement of facts furnished
under sub-rule (1), it shall be stated clearly
and concisely and supported by a duly sworn
affidavit.
(4) On receipt of the statement of facts and the
terms of settlement under sub-rule (1), the
Commission shall forward a copy thereof to the
Commissioner calling for his further report.