E Settlement v. We Have Heard Learned Counsel For The Parties And Find That The Presentpetition Deserves To Be Dismissed

THE HIGH COURT OF MADHYA PRADESH: JABALPUR (Division Bench) Writ Petition No. 12972/2018 ------------------------------------------------------------------------------------------- Coram: Hon’ble Shri Justice Ajay Kumar Mittal, Chief JusticeHon’ble Shri Justice Vijay Kumar Shukla, Judge ------------------------------------------------------------------------------------------- Appearance: Shri Mukesh Agrawal, Advocate for the petitioner. Shri Sanjay Lal, Advocate for the respondents No.1 to 3. ------------------------------------------------------------------------------------------- O R D E R (Oral)[06.01.2020] Per: Ajay Kumar Mittal, Chief Justice: The petitioner by filing the instant writ petition under Article 226 ofthe Constitution of India has challenged an order dated 18.12.2017(Annexure P-2) passed by the Settlement Commission whereby theapplication preferred by the petitioner under Section 245D(6B) of theIncome Tax Act, 1961 (hereinafter referred to as “the Act”) for rectificationof the order, has been dismissed. 2.The facts leading to the present petition are that the petitioner being anindividual assessee filed an application under Section 245D(4) of the Actbefore the Settlement Commission for settlement on 24.2.2015 disclosingadditional income as prescribed under Section 245C of the Act for the period2007-08 to 2013-14. The said application was decided by the Settlement Commission vide order dated 28.11.2016. Noticing certain errors in theorder dated 28.11.2016, the petitioner preferred an application (Annexure P-1) under Section 245D(6B) of the Act for rectification of the mistakes on30[th] June, 2017. The petitioner asserts that the order dated 28.11.2016 wasserved upon him in the month of December, 2016 and this averment wasspecifically made in the application so as to say that the application waswithin the period of limitation. However, the Settlement Commission videorder impugned herein has dismissed the application for rectification on theground that the same is barred by limitation, which is challenged herein. 3.Learned counsel for the petitioner submitted that the order underSection 245C of the Act was passed on 28.11.2016 but it was served uponthe petitioner in the month of December, 2016, hence, the limitation of sixmonths as provided under Clause (a) of Section 245D(6B) read with the firstproviso contained therein, would expire on 30.06.2017 and therefore, theapplication for rectification filed on 30.06.2017 was well within thelimitation. Learned counsel has vehemently argued that for the purposes ofSection 245D(6B) of the Act, the limitation ought to have been counted fromthe date of service of the order and not from the date of the order itself. Inthis context, he has placed heavy reliance upon the two judgments of theSupreme Court reported in AIR 1961 SC 1500 (Raja Harish Chandra RajSingh vs. Deputy Land Acquisition Officer and another) and (2003) 6SCC 186 (D. Saibaba vs. Bar Council of India and another). Reliance hasalso been placed upon a Division Bench decision of Bombay High Courtreported in (1959) 37 ITR 264 (Petlad Bulakhidas Mills Co. Ltd. vs. RajSingh and another). 4.Shri Lal, learned counsel appearing for the Revenue, on the otherhand, arguing in support of the impugned order has contended that theproviso attached to Section 245D(6B) of the Act creates a bar in entertainingan application for rectification after the expiry of six months from the end ofthe month in which an order under sub-section (4) of Section 245D of theAct is passed by the Settlement Commission. 5.We have heard learned counsel for the parties and find that the presentpetition deserves to be dismissed. 4.Shri Lal, learned counsel appearing for the Revenue, on the otherhand, arguing in support of the impugned order has contended that theproviso attached to Section 245D(6B) of the Act creates a bar in entertainingan application for rectification after the expiry of six months from the end ofthe month in which an order under sub-section (4) of Section 245D of theAct is passed by the Settlement Commission. 5.We have heard learned counsel for the parties and find that the presentpetition deserves to be dismissed. 6.Section 245D of the Act lays down procedure on receipt of anapplication under Section 245C of the Act. Under sub-section (6B) thereof,the Settlement Commission has been empowered to rectify any mistakeapparent from the record in the order passed by it under sub-section (4)thereof. Sub-section (6B) of Section 245D of the Act reads as under:- “(6B) The Settlement Commission may, with a view to rectifying anymistake apparent from the record, amend any order passed by it under sub-section (4) – (a) at any time within a period of six months from the end of themonth in which the order was passed; or month in which the order was passed; or (b) at any time within the period of six months from the end of themonth in which an application for rectification has been madeby the Principal Commissioner or the Commissioner or theapplicant, as the case may be: month in which an application for rectification has been madeby the Principal Commissioner or the Commissioner or theapplicant, as the case may be: Provided that no application for rectification shall be made by thePrincipal Commissioner or the Commissioner or the applicant after theexpiry of six months from the end of the month in which an order undersub-section (4) is passed by the Settlement Commission: Provided further that an amendment which has the effect ofmodifying the liability of the applicant shall not be made under this sub-section unless the Settlement Commission has given notice to the applicantand the Principal Commissioner or Commissioner of its intention to do soand has allowed the applicant and the Principal Commissioner orCommissioner an opportunity of being heard.” 7.A perusal of sub-section (6B) of Section 245D of the Act makes itamply clear that any mistake apparent from the record in the order passed bythe Settlement Commission under sub-section (4) of Section 245D of the Actmay be rectified at any time within a period of six months from the end ofthe month in which the order was passed or at any time within a period ofsix months from the end of the month in which an application forrectification has been made by the Principal Commissioner or theCommissioner or the applicant, as the case may be. The first proviso to sub-section (6B) further creates an embargo for making any such application forrectification after the expiry of six months from the end of the month inwhich an order under sub-section (4) is passed by the SettlementCommission. In the present case, the order under sub-section (4) of Section245D was passed by the Settlement Commission on 28.11.2016. Thus, sixmonths from the end of the month in which the order was passed, expired on31[st] May, 2017. Admittedly, the application under Section 245D(6B) of theAct was filed by the petitioner on 30.06.2017 which was barred by limitationas provided under sub-section (6B) thereof. 8.Still further, even if the argument advanced by the petitioner that thelimitation of six months for entertaining application under Section 245D(6B)of the Act would start running from the date the order was served on thepetitioner, is considered, there is nothing to show as to on which date in themonth of December, 2016 the order was served upon the petitioner. Thepetitioner has only stated that the order dated 28.11.2016 was served uponhim in the month of December, 2016 and has not demonstrated that the orderdated 28.11.2016 was served upon him on or after 30[th] December, 2016 so asto claim that the application filed by the petitioner on 30[th] June, 2017 was within limitation. Thus, considering the controversy from this angle also, nocase is made out in favour of the petitioner. 9.In Supreme Court decision in Raja Harish Chandra Raj Singh(supra), relied upon by the learned counsel for the petitioner,the questionarose for consideration as to whether the application filed by the petitionerunder Section 18 of the Land Acquisition Act, 1894 was in time or not. Theproviso to Section 18 of the said Act deals with the question of limitation.The Supreme Court observed that Section 12(2) of the said Act makes itobligatory on the Collector to give immediate notice of his award to such ofthe persons interested as are not present personally or by theirrepresentatives when the award is made. It is in this background, the Courtheld that the failure of the Collector to discharge his obligation underSection 12(2) of the said Act would directly tend to make ineffective theright of the party to make an application under Section 18 and therefore, theHigh Court was in error in coming to the conclusion that the applicationmade by the appellant in the said proceedings was barred under the provisoto Section 18 of the said Act. The relevant extract of the said decision readsas under:- “7.In this connection it is material to recall the fact that under section12(2) it is obligatory on the Collector to give immediate notice of theaward to the persons interested as are not present personally or by theirrepresentatives when the award is made. This requirement itself postulatesthe necessity of the communication of the award to the party concerned.The Legislature recognised that the making of the award under section 11followed by its filing under Section 12(1) would not meet therequirements of justice before bringing the award into force. It thoughtthat the communication of the award to the party concerned was alsonecessary, and so by the use of the mandatory words an obligation isplaced on the Collector to communicate the award immediately to the12(2) it is obligatory on the Collector to give immediate notice of theaward to the persons interested as are not present personally or by theirrepresentatives when the award is made. This requirement itself postulatesthe necessity of the communication of the award to the party concerned.The Legislature recognised that the making of the award under section 11followed by its filing under Section 12(1) would not meet therequirements of justice before bringing the award into force. It thoughtthat the communication of the award to the party concerned was alsonecessary, and so by the use of the mandatory words an obligation isplaced on the Collector to communicate the award immediately to the person concerned. It is significant that the section requires the Collector togive notice of the award immediately after making it. This provision lendssupport to the view which we have taken about the construction of theexpression "from the date of the Collector's award" in the proviso toSection 18. It is because communication of the order is regarded by theLegislature as necessary that Section 12(2) has imposed an obligation onthe Collector and if the relevant clause in the proviso is read in the light ofthis statutory requirement it tends to show that the literal and mechanicalconstruction of the said clause would be wholly inappropriate. It wouldindeed be a very curious result that the failure of the Collector to dischargehis obligation under Section 12(2) should directly tend to make ineffectivethe right of the party to make an application under Section 18, and thisresult could not possibly have been intended by the legislature.” However, in the present case, under sub-section (6B) of Section 245Dof the Act, there is no such requirement expressly provided forcommunication of the order of which rectification is sought, rather the saidprovision entitles both the Principal Commissioner or the Commissioner orthe applicant to seek rectification of any mistake apparent from the record inthe order passed by the Settlement Commission under sub-section (4) ofSection 245D of the Act within six months from the end of the month whenthe order, rectification of which is sought, was passed. Thus, the decision inRaja Harish Chandra Raj Singh (supra) does not confer any advantage tothe petitioner. 10.Similarly, another decision of the Supreme Court in D. Saibaba(supra) and Division Bench decision of Bombay High Court in PetladBulakhidas Mills (supra) relied upon by the learned counsel for thepetitioner are also of no help to the petitioner being distinguishable on factsand passed in the cases considering different enactments. These decisionswere also referred to by the petitioner before the learned SettlementCommission and the Commission observed as under:- S/ “5.After considering the arguments of both the sides and legal positionon the issue, we are of the opinion that none of these case laws are directlyon section 245D(6B) and to clarify the intent of legislature on thelimitation period, a proviso to this section has been inserted w.e.f.01.06.2015. This proviso clearly mentions that the time period of sixmonths for filing rectification application is from date of passing the orderu/s 245D(4) and not from its date of receipt by the PCIT or the applicant.There is no dispute that application has been filed after six months fromthe end of the month of passing the order u/s 245D(4). Further, section 268referred by the applicant relates to cases of exclusion of time for taking acopy of order where the order has not been served upon the applicant. Inthe present case the order has been served upon the applicant and theapplicant has never asked for any copy of un-served order. We are of theopinion that the law is unambiguous in its intent and ample time of sixmonths was available with the applicant to file the rectificationapplication. As the present application has been filed beyond a period ofend of six months from the end of month in which the order u/s 245D(4)was passed, we are inclined to reject the application of the applicantconsidering it to be non-est. Since, the application has been held to benon-est, the other substantive issues are not being adjudicated on merit.” 11.We do not find any error in the findings recorded by the learnedSettlement Commission warranting interference in exercise of power ofjudicial review. That apart, if any right has been conferred by theLegislature, it equally has the right to take it away or prescribe reasonableconditions for the exercise of the right. The Legislature would be perfectlywithin its right to regulate any right conferred by it while imposingconditions or restrictions on its exercise. 11.We do not find any error in the findings recorded by the learnedSettlement Commission warranting interference in exercise of power ofjudicial review. That apart, if any right has been conferred by theLegislature, it equally has the right to take it away or prescribe reasonableconditions for the exercise of the right. The Legislature would be perfectlywithin its right to regulate any right conferred by it while imposingconditions or restrictions on its exercise. 12.In view of the foregoing reasons, the writ petition sans substance andis accordingly dismissed. (Ajay Kumar Mittal) (Vijay Kumar Shukla)Chief Justice Judge