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PETITIONER: COMMISSIONER OF INCOME TAX (CENTRAL) CALCUTTA

       Vs.

RESPONDENT: B. N.BHATTACHARJEE & ANR.

DATE OF JUDGMENT04/05/1979

BENCH: KRISHNAIYER, V.R. BENCH: KRISHNAIYER, V.R. TULZAPURKAR, V.D.

CITATION:  1979 AIR 1725            1979 SCR  (3)1133  1979 SCC  (4) 121  CITATOR INFO :  R          1984 SC 420  (38)  MV         1985 SC 150  (30)  RF         1989 SC1038  (1)

ACT:      Income Tax  Act, 1961 (43 of 1961)-Ss. 245A-245M-Scope, purpose and  object of-procedure  and powers  of  Settlement Commission-Settlement Commissioner whether a tribunal.      Words & Phrases-’Preferred an appeal’-S.245M(1) proviso Income Tax Act. 1961-Meaning of.      ’Interpretation  of   Statutes-Fiscal  philosophy   and interpretation technology  to be  on same  wave  length  for legislative policy to find fulfilment in the enacted text.

HEADNOTE:      A large  sum of  Rs.  30  lakhs  in  cash  having  been recovered from  the respondent  in pursuance  to a search by the Income Tax officials his assessments for the years 1962- 63 to 1972-73 were reopened by the Department. The total tax burden on  the respondent  was over  Rs.  30  lakhs  and  an additional sum  of Rs.  35 lakhs  was assessed  for the year 1973-74. The  respondent was  also prosecuted under s 277 of the Income Tax Act.      Appeals by  the respondent  to the  Appellate Assistant Commissioner brought down the assessable income by about Rs. 10 lakhs.      The respondent  and the department both appealed to the Income Tax  Appellate Tribunal, the former filing 12 appeals and the latter 10 appeals.      The respondent  moved  the  Settlement  Commission  for composition under s. 245M. The assessee withdrew his appeals and the  revenue  declared  their  assessments  and  appeals ’weak’ and withdrew them.      The Settlement Commission on receipt of the application under s. 245C acted under s. 24SD(l) and called for a report from the  appellant. The appellant reported that prosecution proceedings  for   concealment  of  income  and  also  false verification in  the return  by the  respondent were pending against the respondent in the Magistrate’s Court and that it was not a fit case to be proceeded with by the Commission.      The Settlement  Commission  after  some  correspondence with the  respondent and  without giving  a hearing informed

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him that  as the appellant had objected under s. 245D ( I ), the Settlement  Commission did  not allow the application to be proceeded with.      The appellant  thereupon moved the Income Tax Appellate Tribunal for restoration of its appeals although no specific provision enable  such a  restoration, the  asssessee  being entitled to apply for restoration under s. 245M.      The  respondent  urged  the  Settlement  Commission  to review its order as no hearing as such was given to him. The Settlement Commission yielded to his 1134 submission,  reached   the  reverse   conclusion  that   the appellant’s opposition  to the  composition notwithstanding, the application for settlement be considered on merits.      The core  controversy in the appeals to this Court were whether in  view  of  the  withdrawal  of  the  departmental appeals  before  the  Income  Tax  Appellate  Tribunal,  the Commissioner is  estopped from  making  a  report  under  s. 245D(1) proviso  2 to  the Settlment Commission objecting to the application from being proceeded with.      On behalf  of the  appellant it  was contended that (a) there was  no power  of review  for the Commission, since it had declined  to proceed with the application for settlement and  consequently   the   re-opening   of   the   Settlement proceedings was  invalid, (b)  even though  the  C.T.T.  had withdrawn his  appeals and thus facilitated the filing of an application under  s. 245C no bar of estoppel could be spelt out to forbid the Commissioner from exercising his statutory power of  withholding consent  to the settlement proceedings and (c)  the C.l.T’s  veto was  not  subject  to  review  or invalidation by the Settlement Commission      Allowing the appeals: ^      HELD 1.  The Settlement  Commission should be inhibited from proceeding with the application of the assessee and the appeals by  the assessee  before the  Income  Tax  Appellate Tribunal must  be revived  and  disposed  of  expeditiously. [1164F1      2. The  departmental appeals,  having been  admitted by the Commissioner  of Income  Tax himself to be very weak and frivolous, should  not be revived as it will be only a waste of public time and money. [iy]      3. If  the Department files an appeal which it drops to enable  an  application  before  the  Commission,  then  the proviso  to  s.  245M(1)  does  not  debar  the  motion  for settlement. [1156C]      4. Functionally  speaking, Chapter  XIXA in  the Income Tax Act, 1961, enacted by the Taxation Laws (Amendment) Act, 1975, engrafted  in partial  implementation of  the  Wanchoo Committee  Report,  provides  for  settlement  of  huge  tax disputes  and   immunity  from   criminal  proceeding  by  a Commission to  be constituted by the Central Government when approached  without   objection  from  the  Tax  Department. [1138E]      5. Fiscal philosophy and interpretation technology must be on  the same  wavelength if legislative policy is to find fulfilment in the enacted text. [1138 H]      6.  The   mechanics  of   s.  245D  provides  that  the application for  settlement, when  filed, shall be forwarded to the Commissioner for a report and is only on the basis of the material  contained in  such report  that the Settlement Commission may allow the application to be proceeded with or reject the  application. To  reject  an  application  is  to refuse relief  outright and  affect the applicant adversely. So it is provided "that an application shall not be rejected

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unless an  opportunity has  been given  to the  applicant of being heard."  An applicant before the settlement Commission is therefore  entitled to  a hearing  before his application for composition is rejected [1146G-H] 1135      7. The  rule of  fairplay  incorporated  in  the  first proviso to s. 245D(l) A obligates the Commission to hear the applicant before  rejection. Even  apart from  any  specific provision, it  is legal  fairplay  not  to  hurt  any  party without hearing  him unless  the Act  expressly excludes it. Nothing is  lost by  hearing a  petitioner whose application for settlement  is being  rejected and much may be gained by such hearing  in properly  processing the application in the spirit of  Chapter XIXA.  S 245D  ( 1  )  does.  not  negate natural justice  and in  the absence of an express exclusion of the  rule of  audi alteram  partem, it  is  fair,  indeed fundamental, that  no man  is prejudiced  by action  without opportunity to  show to the contrary. Law leans in favour of natural justice  where statutory  interdict does  not forbid it. [1147A-D, F]      Mohinder Singh  Gill  v  Chief  Election  Commissioner, [1978] 1  SCC 405; Maneka Gandhi v. Union of India, [1978] 1 SCC 248 referred to.      In the  instant case,  the Settlement Commission in the first  instance   rejected  the   application  because   the Commissioner of  Income Tax  objected to  it.  The  rule  of fairplay incorporated  in the  first proviso  to  s.  245(1) obligates the  Commission to  hear.  the  applicant,  before rejection. The  Settlement Commission’s  decision to re-hear and pass  a de  novo order  cannot, therefore, be said to be illegal. [1147E]      8. The second proviso to s. 245D ( 1 ) is compulsive in tune and  import, for it mandates "that an application shall not  be   proceeded  with  under  this  sub-section  if  the Commissioner objects to the application being proceeded with on the  ground that  concealment of particulars of income on the part  of the  applicant or  perpetration of fraud by him for evading  any tax....has been established or is likely to be established  by any income tax authority, in’ relation to the case."  There is  little diffculty  in holding  that the application for  settlement, having  been  rejected  by  the Commissioner, could  not be  proceeded with. The veto of the Commissioner was the Waterloo of the application.                                             [1147G-1148A, D]      9. Section  245H is  of great  moment from the angle of public interest  and public  morals at  it  immunises  white collar  offenders  against  criminal  prosecutions  and,  in unscrupulous circumstances,  becomes a suspect instrument of negotiable corruption.  More than  the prospect  of monetary liability and  mounting penalty  is the  dread of  traumatic prison tenancy that a tax-dodging F tycoon is worried about. And if he can purchase freedom from criminal prosecution and incarceratory sentence  he may  settle with  the Commission, and towards  this end, try to lay those who remotely control the departmental  echelons whose veto or green signal, opens the  prosecutions.   Thus,  s.   245H,  which   clothes  the Commission with the power to grant immunity from prosecution for "any  offence under  this Act  or under the Indian Penal Code or  under any  other Central Act...." is a magnet which attracts  large   tax-dodgers  and   offers,  indirectly  an opportunity  to   the  highest  departmental  and  political authorities a suspect power to bargain. [1150C-E]      1O Section  245M enables certain persons who have filed appeals to  the Appellate  Tribunal to  make applications to the  Settlement   Commission.  The   section   (a)   enables

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withdrawal  of  appeals  before  tribunals  by  assessee  as condition precedent  to applications  for composition by the Settlement Commission,  (b) applies,  by  a  legal  fiction, Section 245C  and to  such applications,  and (c)  where the proceedings before the Commission is not entertained, allows revival of  the withdrawn  appeals thus restoring the Status quo ante. 1136 The proviso to s.. 245M(l) places an embargo on the right of the assessee  to move  the Commission  where the  income tax officer has  preferred an  appeal under  sub-s.(2) of s. 253 against the  order to  which the  assessee’s appeal relates. The  proviso   interdicts  entertainment   of  a  settlement application if  - departmental  appeals are  filed.  [IISOF, 1151G, 1152C, 1153F]      11.  Purposefully   interpreted  preferring  an  appeal means. more than formally filing it but effectively pursuing it. If  a party  retreats before the contest begins it is as good as not having entered the fray. After all, Chapter XIXA is geared  to promotion  of settlement and creation of road- blocs in  reasonable composition. The teleological method of interpretation leads  to the  view that  early withdrawal of the I.T.O’s appeal removed the bar of the proviso.                                                    [1153C-D]      12.  The   purpose  of   substituting  the   method  of investigative  negotiation,   just  settlement   and   early exigibility by  a high  powered Commission  for a tier-upon- tier of  long protracted  litigation, where  victory may  be phyrrhic and  futile, is  ill-served by  keeping  out  cases solely for  the reasons  that departmental appeals have been filed. [1153H-1154A]      13. The  obvious object  of the  clause, "the  assessee shall not  be deemed  to have  withdrawn the appeal from the appellate tribunal," is to restore the parties to status quo ante, and  in fairness,  must apply  to the Department as to the  assessee.   This  non-discriminatory   import  can   be reasonably  read   into  the   clause  if  we  construe  the expression "the  assessee in  wider way so as to include all parties affected by the subject matter of the assessment. In that case,  the clause may mean that no one who is aggrieved by the  assessment shall  be deemed  to have  withdrawn  the appeal  from  the  appellate  tribunal."  An  equitable  and purpose oriented  construction of  the clause means that the assessee will be put back in the same position vis-a-vis his appeals and  if, to facilitate his moving the Commission the I.T.O.  has   withdrawn  the   depart  mental  appeals,  the Commission’s rejection  of the  application  shall  not  pre judice the  Revenue. Actus  curie neminem  gravabit  is  the principle of wider import and is a tool of construction too. This  perhaps   may  be   making  up   for  a  lacuna  by  a restructuring of the clause so as to work out justice to the Department. [1154E-G]      14. The  scheme of  s. 253(4)  contemplates  filing  of memorandum of  cross objections  by the  ITO on  receipt  of notice of  the appeal by the assessee. So much so it is also possible, alternatively to read into s. 245 (7) the right of the department  to file  an appeal  de novo  on  receipt  of notice of  the revival  of the assessee’s appeal, within the period specified  in s.  253 (4) . This does not do violence to the  language of  s. 245M(7) and affords equitable relief to the Department by enabling it to bring its appeal back to life  notwithstanding   the  earlier  withdrawal,  when  the assesses’s appeal reincarnates s. 245M(7).                                                [1154H-ll55B]      15. The  judicial process does not stand helpless. with

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folded hands but engineers its way to discern meaning when a new construction  with a  view to  rationlisation is needed. [1155C]      Seaford Court  Estates Ltd.  v. Asher, [1949] 2 KB 481, referred to.      16. A  casual perusal  of Chapter  XIXA  convinces  the discerning eye  that  the  Settlement  Commission  exercises many-powers which  affect, for good or otherwise, the rights of the parties before it And vests in it power to grant 1137 immunity from  prosecution and  penalty, to investigate into any matters  and to  A enjoy  conclusiveness  regarding  its orders or  settlement. Section 245L declares all proceedings before the Settlement Commission to be judicial proceedings. Settlement Commission  are  therefore  tribunals.  [ll57D-E, ll56E]      Associated Cement  Companies Ltd.  v. P.  N. Sharma and another [1962] 2 SCR 266; referred to.      17. The  Commissioner has  a duty to the public Revenue and more  importantly, a  duty to object to any assessee who is prima facie guilty of grave criminal conduct in the shape of concealment  of income  or perpetration  of fraud getting away with  it by  invoking chapter XIXA. The gravity of this public  policy   cannot  be   undermined  by  interpretative softness of  second puroviso  to s. 245D(l). To whittle down the imperative  nature of  this veto  power is  to undo  the expectations  of   the  Wanchoo  Committee  and  amounts  to stultify the  rule of law, an integral part of which is that the law  shall not  let the  greater  felon  loose.  [1158E; 1158H-1159A]      18 Section 245D by the 2nd Proviso, casts a public duty on the  Commissioner of  Income Tax to consider in the light of the  case made  out in the assessee s application whether "concealment of  particulars of  income on  the part  of the applicant or  prepetration of  fraud by  him for evading any tax or  other sum  chargeable or  imposable under the Indian Income Tax  Act, 1922   (11 of 1922). Or under this act, has been established  or is  likely to  be  established  by  any Income-Tax authority, in relation to the case," and exercise his veto  power to  prevent escape  of macro-criminals prima facie guilty  of grave  economic crimes.  He cannot  bargain over this  interdict in  advance  or  barter  away  a  legal mandate in  anticipation. He  may permit  or even assist the filing of  a. conciliation  motion of the assesse’e but when the Commission intimates him under s. 245D(l) he shall, with statutory seriousness.  exercise his  discretion. He  cannot enter into  a ’deal’  over this  power without betraying the statutory trust.  The plea  that the Commissioner of Income- Tax,  by   conduct  and   understanding  has   ’irredeemably mortgaged’ his statutory duty to object if the case deserves such objection  has to  be negatived.  Estoppel then is both odious and  omnius and  discretion the  door  to  corruption [1160D-G]      19. In  the instant  case, the CIT withdrew the appeals but it  is not  correct that  he made representations to the assessee to  act in  a particular manner with a provision of doing something  to his advantage leading to the assessee in turn acting  to his own prejudice by withdrawing his appeals His withdrawal of the appeals was independently decided upon by him  so that  he could move the Commission. Thereafter he moved the  department to  withdraw  its  appeals  so  as  to entitle him  to make  an application  to the Commission. The canons that  govern the  application  of  the  principle  of estoppel contradict  its ’extension to a. situation like the present. The  plea of  estoppel which  has found favour with

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the Commission has therefore to be over-ruled. The objection raised by  the CIT is a potent interdict on the jurisdiction of the Commission. [1163H-1164A, C]      20. The policy of the law as. disclosed in Chapter XIXA is not  to provide  a rescue shelter for big tax-dodgers who indulge in criminal activities by approaching the Settlement Commission The Settlement Commission will certainly take due note of  the gravity   of economic offences on the wealth of the nation  which the  Wanchoo Committee  has emphasised and will exercise 1138 its power  of immunisation  against criminal prosecutions by using its  power only  sparingly  and  in  deserving  cases, otherwise such  orders may  become  vulnerable  if  properly challenged. [1164 E]

JUDGMENT:      CIVIL APPELLATE JURISDICTION: Civil Appeal Nos. 454-465 of 1979.      Appeals by  Special Leave from the order dated 9-5-1978 of the  Settlement Commissioner (I.T. & W.T.) Govt of India, New Delhi in Application No. 7/1/20-77-II.      S. T.  Desai, J.  Ramamurthi and Miss A. Subhashini for the Appellant.      A. K.  Sen, Dinesh  Vyas, Manulal,  P. H. Parekh, C. B. Singh, M. Mudgal, and N. Mundal for the Respondent No. 1      The Judgment of the Court was delivered by      KRISHNA IYER,  J. A  nascent Chapter  (Chapter XIXA) in the Income  Tax Act,  1961, enacted  by  the  Taxation  Laws (Amendment) Act,  1975, whose  beneficiaries are  ordinarily those whose  tax liability   is  astronomical  and  criminal culpability perilous,  falls for  decoding by  this Court in this appeal by the C.l.T.(1) (Central), Calcutta, against an adverse   order   made   by   the   Settlement   Commission. Functionally speaking,  this Chapter,  engrafted in  partial implementation of the Wanchoo Committee Report, provides for settlement of  huge tax  disputes and immunity from criminal proceedings by a Commission to be constituted by the Central Government when  approached without  objection from  the Tax Department. It  is based  on the  debatable policy,  fraught with dubious  potentialities in  the context  of Third World conditions of  political peculium and bureaucratic abetment, That com  position and  collection of  public  revenue  from tycoons is  better than  prosecution  of  their  tax-related crime and  litigation for  total revenue  recovery. A social audit of the working of this Chapter in action and its fall- out may benefit the nation by information about who the true beneficiaries of  this legislation  are and whether there is more  than  meets  the  eye.  The  Wanchoo  Committee  which recommended this  step titled  its Chapter  meaningfully  as "Black Money  and Tax Evasion" and the Act itself was passed and brought into force during the era of Emergency which was marked by  speed and  silence and  hushed  politico-official operations.      Be that as it may, fiscal philosophy and interpretative technology must  be on  the same  wavelength if  legislative policy is  to find  fulgilment in  the enacted text. That is the  challenge   to  judicial  resourcefulness  the  present appeals offer, demanding, as it does, a holistic perspective and      (I) Commissioner of Income Tax 1139 harmonious construction  of a  whole chapter,  especially  a

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complex provision  therein, so  that a balance may be struck between  purpose   and  result  without  doing  violence  to statutory language  and social values. ’The Chapter is fresh and the  issue  is  virgin;  and  that  makes  the  judicial adventure hazardous,  compounded by the involved and obscure drafting of the bunch of provisions in Chapter XIXA.      A few  facts must  be narrated  and the  anatomy of the Chapter projected  at this  stage, so  that a  hang  of  the controversy may be got and its just resolution sought.      The  respondent,  an  elderly  but  apparently  immense businessman, was the cynosure of suspicion of the Income Tax officials which  led to  search and seizure of around Rs. 30 lakhs in  cash  from  him.  A  chain  reaction  set  in  and assessments from  1962-63 to  1972-73  were  re-opened.  The total tax  burden so  fixed ran  into well over Rs. 60 lakhs plus around  Rs. 35  lakhs assessed  for 1973-74. The stakes thus ran  into a crore or so plus awesome prosecutions under s.  ’’77   of  the   Act  with  unpredictable  prospects  of sentences. The  respondent-  assessee  and  his  version  or explanation had  hopes of  averting the  Waterloo;  but  the Income Tax officer (I.T.O) rejected his case. Indeed, we are neither called  upon nor  disposed to  examine the merits of either side and, maybe, the assessee has a presentable case. Appeals to  the Appellate  Assistant  Commissioner  (A.A.C.) were carried  by the  assessee against the colossal imposts, which marginally  brought  down  the  assessable  income  by around Rs.  10 lakhs. Both the dissatisfied assessee and the partially injured  Department appealed  to  the  Income  Tax Appellate Tribunal (I.T.A.T.) against the A.A.C’s decisions. During their  pendency, prudence dawned on the respondent to seek sanctuary  before Settlement  Commission abandoning his appeal   to    the   Tribunal   attended   with   litigative uncertainties and  penal potentialities.  At  seventy,  with understandable high  blood pressure  to boot,  he  preferred negotiated peace  to judicial  justice heartful of quest for quiet  although   hopeful  of   winning  his   cases.  These motivations do  not call  for  our  comment  but  are  being mentioned as  part of the narrative which ostensibly induced him to go before the Commission under Chapter XIXA.      To  compress  the  long  story  without  crippling  the foundational facts, what happened after the assessee decided upon offering  himself to  the Settlement  Commission was to prepare the  ground to  enable him to institute a proceeding in this behalf.      The deck had to be cleared before moving the Settlement Commission.  The  conditions  for  entitlement  to  make  an application to the 1140 Settlement Commission are set out in s. 245M. We may have to examine closely  the connotation  of the expressions used in this Section  but for  the nonce  it is  sufficient to state that it  is obligatory  for the  assessee  to  withdraw  any appeal that  may be  pending at  his instance  before  being qualified  to   make  an   application  to   the  Settlement Commission. Another condition stipulated in the same Section is that  an assessee  shall  not  be  entitled  to  make  an application "in  a case  where the  I.T.O. has  preferred an appeal under  sub-section (2)  of section  253  against  the order to  which  the  assessee’s  appeal  relates."  Without meticulous dissection  of the provision, we may broadly draw the conclusion  that the  assessee must  withdraw his appeal before the Tribunal before moving the Settlement Commission. Likewise, the  I.T.O. should  not have  preferred an appeal. Therefore,  the   respondent-assessee  engaged   himself  in complying with these conditions. He expected to achieve this

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objective by  moving for  withdrawal of  his own  12 appeals before  the  Tribunal  and  by  persuading  the  Income  Tax Department to  withdraw its  10 appeals  pending before  the Tribunal. At  the moment,  we do not discuss the finer issue of crucial significance as to whether an appeal preferred by the Revenue  but later withdrawn by it would have the effect of total  obliteration so  as to  fulfil the condition of no appeal having  been preferred  by the Income-Tax Department. ’the narrative  alone need  be continued.  On 23-8-1976  the assessee  addressed  a  letter  to  the  Appellate  Tribunal seeking to withdraw his appeals under s. 245M of the Act. On the same  day he  moved Mr. Kuruvilla, Member, Central Board of  Direct  Taxes  requesting  the  Board  to  instruct  the concerned officer  of the  Department to  withdraw  all  the pending appeals filed by the Department before the Tribunal. The letter stated:           "Though I  am sure  that I  shall  win  all  these      appeals filed  by me  with the  Court of  the Appellate      Tribunal but  just to buy peace at my old age. I wanted      to  place   myself  in  the  hands  of  the  Settlement      Commission and seek full justice and mercy.           In view  of all these facts explained above I pray      for undernoted  point for  your kind  consideration and      necessary action.  l shall  be grateful,  if you  would      kindly ask  your Department to withdraw all the pending      applications filed by the Department with the l.T.A.T."                                             (emphasis added)      The somewhat  ambivalent  terminology  and  incongruous stances taken  in the  letter are striking. For instance, he asserted that he was 1141 sure to  win all  his appeals but still he sought mercy from the Commission.  He put forward old age and hypertension for desisting  from   litigation  and   gratefully  desired  the Department to cooperate with him by withdrawing its appeals. Before knowing  the open  response  of  the  Department,  he addressed the  Tribunal for  withdrawal of his appeal which, perhaps, suggests  that he  was sure  of the reaction of the Department or  did not loss much by withdrawing his appeals. However, when the I.T.A.T. posted the withdrawal application for hearing  on "4th  September, 1976,  the assessee wrote a letter asking for adjournment wherein he stated:           "With regard  to the above I beg most respectfully      to submit  that one  petition was filed for withdrawing      all the  above appeals only to have those cases settled      before the  Settlement Commission,  New Delhi  but  the      Department had  also preferred appeals for those years.      Unless the  Department  also  withdraws  their  appeals      there will be no purpose for our withdrawal of appeals.      As such  my client  is pursuading  the Central Board of      Direct Taxes to do something effectively in the matter,      but for  consultations with  their  councils,  etc,  it      would take at least two months’ time."      Probably the assessee felt that the Central Board could be persuaded  "to do  something effectively  in the matter", given some  time. The anticipations of the assessee were not belied because  the addressee  Member of  the Central Board, with celerity,  consulted the  Commissioner, who,  in  turn, sought and got affiramative reports from those below him and at the  end of this rapid departmental exercise, reached the conclusion in  October/November (i.e. in about a month) that the  appeals   of  the  Departments  were  very  weak,  even frivolous(’)  and  that,  therefore,  nothing  was  lost  by withdrawing them  from the  Tribunal. In  keeping with  this conclusion, the  tempo was  accelerated by  the Board Member

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issuing necessary  instructions to withdraw its appeals, and the C.I.T.  hastened to  write to the assessee-respondent in December, 1976.           "I am  to inform you that the Departmental appeals      pending  before   the  Income-tax  Appellate  Tribunal,      Calcutta against you will be withdrawn provided all the      appeals filed by you for the assessment year 1962-63 to      1973-74 are with- drawn by you."      (1) See para 5.2 and 5.3 of the Settlement Commission’s order. 1142      A consequential  representation  was  made  before  the I.T.A.T.           "I have been directed to withdraw the above Depart      mental appeals on condition that the assessee’s appeals      for the  assessment years  1962-63 to  1973-74 are also      with drawn." I.T.A.T. was persuaded to pass orders dismissing the appeals from both  sides as  withdrawn. The  obvious purpose  of the Department’s withdrawal  of its  appeals was  to enable  the assessee to  move the Settlement Commission. From the Member of the  Central Board  down to  the I.T.O. they conveniently discovered, at  this critical stage late in 1976, that their appeals were weak and frivolous.      The plea of the appellant that the decision to withdraw the  appeals   by  the   Revenue  was   independent  of  the respondent’s  request   that  he   be  helped  to  move  the Commission needs  for its  acceptance a  degree  of  naivete which we do not possess, as we will later show.      We revert  to the further factual developments to catch up with  the  legal  questions  argued  before  us.  On  the Tribunal  dismissing  all  the  appeals  as  withdrawn,  the assessee-respondent applied  to the Settlement Commission on January 6, 1977 under s. 245C. The Commission its order, has recorded that as a prelude to this application:           "the Commissioner  of Income Tax and the applicant      had arrived  at an  understanding  or  an  arrangement,      mutually satisfactory  and in  the public  interest  to      settle the  tax liability  in a  forum where  decisions      would be conclusive and not drag on for years."      Secret understandings  between high  tax officials  and big  assessee   businessmen  are  potential  pollutants  and convert Settlement Commissions into cover-ups-a consummation farthest  from   the  Wanchoo   Commitee’s  intentions   and Parliament’s expectations!  It is  not demoralising that the heirarchy  of   officials  in   the  Income  Tax  Department declared‘ their  assessments and  appeals ’weak’  and  self- condemned themselves  before the  Commission  by  confessing that the  Central Government’s appeals were frivolous ? "But if the  salt hath  lost its  savour wherewith  shall  it  be salted?"      once  the   statutory  operation   for  settlement  was switched  on,   the  machine   moved  on.   The   Settlement Commission, on  receipt of  the application  under s.  245C, acted under-s.  245D(l) and  called for  a report  from  the Commissioner, mindless of the movement of the calender. For, the ides  of March came in the meanwhile and the C.I.T., for reasons we  do not  know, took  a stiff look at the case and reported on 1st April, 1977.           "that prosecution proceedings for concealment of m      come and  also false  verification in  the return  were      already 1143      pending before  the Chief  Metropolitan Magistrate, and      that   he did  not. consider  this as  a fit case to be

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    proceeded with by the Settlement Commission".      After  some  correspondence  with  the  applicant,  and without geving  hearing, the  Settlement Commission  by  its order dated  the 3rd  February, 1978  informed the applicant that, as  the Commissioner  had  n  objected  under  section 245D(l), Settlement Commission did not allow the application to be proceeded with.      Parenthetically though,  it must  be stated that on the first  rejection   of  the  application  by  the  Settlement Commission, the  Revenue moved  the I.T.A.T. for restoration of its appeals although no specific provision enables such a restoration. The  assessee can  apply for restoration of his appeals since s. 245M enables it.      This  order   of  the   Commission  shows   that   some correspondence with the applicant’ did take place before the order not  to proceed  with  his  composition  petition.  No hearing as  such was given to him though, before making this adverse decision  of February  3, 1978.  The assessee  urged that the  order be  reviewed as natural justice had not been complied with.  The Settlement  Commission yielded  to  this submission and,  after  elaborate  argument  and  reasoning, reached the  reverse conclusion  that the C.I.T’s opposition to the  composition not-  withstanding, the  application for settlement shall be considered on the merits.      The Union  of India,  through the C.I.T. concerned, has challenged   the   Settlement   Commission’s   decision   on jurisdictional  and   other  legal  grounds.  The  statutory scheme,  the   semantics  of   the  expressions   used,  the jurisdictional limitations  of the Settlement Commission and allied  issues,  have  been  debated  at  the  bar  and  the declaration  of   law   on   these   aspects   has   seminal significances because  it relates  to a sensitive area where Big Business  may operate  at high  politico-official levels and the  court must  invigilate so  that the  law keeps  its promises.      This perspective  of the  litigation brings  into focus the high  points of  the debate before us, largely reflected in the  Tribunal’s long  order Sri  S.  T.  Desai,  for  the appellant-Revenue concentrated  his fire on three vulnerable aspects of  the judgment under attack. There was no power of review for  the Commission,  once it had declined to proceed with the  application for  settlement. Therefore,  he argued that  the   reopening  of  the  Settlement  proceedings  was invalid. Secondly,  he submitted that even though the C.I.T. had withdrawn his appeals and thus facilitated 1144 the filing  of an  application  under  s.  245C  no  bar  of estoppel  could   at  all   be  spelt   out  to  forbid  the Commissioner from  exercising his  statutory power  of with- holding consent  to the  settlement proceedings. Thirdly, he pressed the  position that the C.I.T.’s veto was not subject to review  or invalidation  by the Settlement Commission and so the  order under  appeal was  bad and  beyond  power.  Of course, subsidiary  issues did  crop up  and Shri A. K. Sen, appearing for  the respondentassessee, not only joined issue with Shri  Desai but  also took a preliminary objection that Art. 136  was unavailable against an order of the Settlement Commission. It  is necessary  to mention  that  an  argument which was  mooted at our instance as the arguments proceeded viz.. that   withdrawal  by the  Revenue of  an appeal  once filed did  not have  the effect of not preferring an appeal, was not  pursued by  the appellant  before us but we are not bound by counsel pressing or cold-shouldering a point of law if attention  of the advocates has been drawn thereto, as in this case it was.

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    The scheme  of Chapter  XIXA must  be grasped before we embark on the discussion.      The incarnation  of Chapter XIXA was in the wake of the Wanchoo Committee Report. The vampirish vices of black money and colossal tax evasion, both together using money power to prevent action  against white-coller  offender, had  been  a terrible menace to the health and wealth of the nation.      In particular,  black money,  whose constant  companion was tax  evasion, posed a challenge to the country’s economy and  the   Wanchoo   Committee   was   appointed   to   make recommendations with  a  view  to  arrest  this  evil.  That Committee made  a wealth  of  recommendations,  but  we  are concerned only with Chapter 2 of the Report which, under the title "Black  Money and  Tax Evasion", proposed a compromise measure of  a statutory  settlement machinery  where the big evader could make a disclosure, disgorge what the Commission fixes and  thus buy  quittance for  himself  and  accelerate recovery of  taxes in  arrears by  the State,  although less than what  may be fixed after long protracted litigation and recovery proceedings.  We are  not concerned with the merits of the  recommendation except  to state  that  if  it  works according to  plan, it  may "ensure  that the  settlement is fair, prompt and independent", given "a high level machinery for administering  the  provisions".  The  risk  of  adverse criticism of  escape by  tax dodgers  was adverted to by the Committee, but  was silenced by the counter-argument that if the Commission was composed of officers with integrity, 1145 wide  knowledge   and  experience   and  high   status   and emoluments, the  A risk  was minimal.  A precautionary  step against  possible   misuse  by  evaders  of  the  settlement machinery was thought of by the Wanchoo Committee which made the circumspect observation.           However, we  wish to  emphasize that  the Tribunal      will proceed with the petition filed by a taxpayer only      if the  Department raises  no objection to its being so      entertained .  We consider  that this  will be salutary      safeguard because  otherwise the  Tribunal might become      an escape  route for  tax evadors  who have been caught      and  who   are  likely   to  be  heavily  penalised  or      prosecuted.      (’The Tribunal’,  in the  Wanchoo Committee  Report was rechristened ’the  Settlement Commission’ in the Act when it was passed  by Parliament).  The Commission  was vested with full power  to investigate  cases on  its jurisdiction being invoked and  to quantify  the amount  of  tax,  penalty  and interest that  it may eventually fix as payable. A strategic provision which  held out  fascination for  the criminal tax evaders was  contained in  the report. The Wanchoo Committee recommended conferment  on the  Settlement Commission  of  a discretion to  "grant immunity  from criminal prosecution in suitable cases".  The  detailed  mechanics  of  application, investigation,  consideration,   bearing  and  disposal  are contained in  the report and have eventually been translated into statutory provisions in Chapter XIXA.      This  legislative  history  leads  us  on  to  a  broad unfoldment of  the actual  provisions of  ss. 245A  to  245M which constitute  a fasciculus  of provisions  designed  for settlement  of   taxes  in  dispute.  Section  245A  is  the definition clause  even as . 245B is the clause constituting the Settlement  Commission. Applications  for settlement  of cases by assessees are regulated by s. 245C which reads      245C. Application for settlement of cases.           (1) An  assessee may,  at any  stage  of  a’  case      relating to  him, make  an application in such form and

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    in such  manner and  containing such particulars as may      be prescribed  to the Settlement Commission to have the      case settled and any such application shall be disposed      of in the manner hereinafter provided.       (2) ...................................       (3) ................................ .. 17-409SCI/79 1146      Its meaning  can be  understood fully only when we read the defenition  of "case". According to the definition in 6. 245A(a)), a  ’case means any proceeding under the income tax law in connection with the assessment or reassessment of any person which  may be  pending before an income tax authority on the  date of  application under  section, 245C(1).  It is common knoledge  that I.T.A.T.  is not  an income authority, which expression,  it is  settled  includes  the  I.T.O  and A.A.C. and  others. Therefore,  when an  appeal pends before the Tribunal,  it cannot be said that a case pends before an income tax  authority. In the present case, we are concerned with a  stage when  appeals are pending before the Tribunal. Section 245C(1)  may not  enable an  assessee  to  move  the Commission in  such cases  but for the provision in s. 245M. Indeed,  we   are  intimately  concerned  with  the  express provisions in and implications of s. 245M which specifically deal with  persons who  have filed  appeals to the Appellate Tribunal and  seek to  apply to  the Settlement  Commission. Sub-section (6)  of s.  245M  is  a  deeming  provision.  An application  under   s.  245M   will  be  deemed  to  be  an application under  s. 245C(l)  and all provisions of Chapter XIXA [except s. 245D(7)] shall apply such proceedings.      The question  then arises  whether and  subject to what conditions can  an assessee  take advantage  of s.  245M and move the  Commission.  only  if  he  can  validly  move  the Commission under  s. 245  can his  application be  processed under s.  245C, 245D  and other  Sections of the Chapter. An intensive examination  of s.  245M(l) to  (S) and  (7)  thus becomes imperative.      Any assessee  may make  an application to have his case settle, but it is one thing to make an application proceeded with. For,  on receipt  of an  application the Commission is not  empowered   automatically  to   proceed  with  it.  The mechanics of s. 245D must be remembered in this context. The application for  settlement, when  filed, shall be forwarded to the Commissioner for a report and it is only on the basis of the material contained in such report that the Settlement Commission may allow the application to be proceeded with or reject the  application. To  reject  an  application  is  to refuse relief  outright and affects the applicant adversely. So it is provided ’that an application shall not be rejected unless an  opportunity has  been given  to the  applicant of being heard."  We are  clearly of the view that an applicant before the  Settlement Commission  is entitled  to a hearing before his  application for  composition is rejected. In the present case,  on the  facts stated  earlier, the Settlement Com mission  in the  first instance rejected the application because 1147 the C.I.T.  Objected to  it. Maybe,  the  objection  of  the Commissioner A  has lethal  potency but the rule of fairplay incorporated in  the first  proviso to  s. 245D(l) obligates the Commission  to hear the applicant before rejection. Even apart from any specific provision, it is legal before not to hurt any  party without hearing him unless the Act expressly excludes it. One may conceive of many reasons why a hearing, even at  this stage,  may be useful. The Commissioner or his

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representative may,  in the light of the circumstances which the  applicant   may  point  out,  withdraw  his  objection. Likewise, the  applicant may  point out that what appears to the  Settlement   Commission  to  be  an  objection  by  the Commission  is   not  an   objection  to  proceed  with  the application, but  only a  clarification of  some  aspect  or other.  Nothing  is  lost  by  hearing  a  petitioner  whose application or  settlement is being rejected and much may be gained  by   such  hearing   in  properly   processing   the application in  the  spirit  of  Chapter  XIXA.  Anyway,  s. 245D(l) does  not negate  natural justice and in the absence of an  express exclusion of the rule of audi alteram partem, it is fair, indeed fundamental, that no man is prejudiced by action without  opportunity to show to the contrary. Without expounding  any   inflexible  rule  of  natural  justice  of universal validity we cannot fault the Settlement Commission for what  it has  done. We take the view that, having regard to the  rulings of  this Court  in M.  S. Gill  case(l)  and Maneka Gandhi  case(2), the Settlement Commission’s decision to re-hear  and pass  a de  novo order  cannot be said to be illegal. The  Commissioner’s. Objection  to the  application being proceeded with may prove fatal or may not, but without entering into  that controversy  we think it correct to hold that  the   Settlement  Commissioner  did  not  act  without jurisdiction by  affording a  hearing and  passing  a  fresh order in  the presence  of both  parties. Whether that fresh order is  valid or  not depends  on the consideration of the merits which  we will presently examine. Law leans in favour of natural justice where statutory interdict does not forbid it.      The question  now  arises  as  to  the  course  of  the exercise of  the Settlement  Commission on  receipt  of  all application  for  composition.  The  second  proviso  to  s. 245D(l) is  compulsive in  ton and  import for  it  mandates "that all application shall not be proceeded with under this sub-section if  the Commissioner  objects to the application being proceeded  with on  the  ground  that  concealment  of particulars of  income on  the  part  of  the  applicant  or perpetration of fraud by him      (1) Mohinder  Singh Gill v. Chief Election Commissioner [1978] 1 S.C.C.405.      (2) Maneka  Gandhi v.  Union of  India [1978] 1. S.C.C. 248. 1148 for evading  any tax..  has been established or is likely to be established  by any  income tax authority, in relation to the case."  In the present case, the Commission did raise an objection on April 1, 1977 that           " ....prosecution  proceedings for  concealment of      income and  also false verification in the returns were      pending before  the Chief  Metropolitan Magistrate  and      that in the circumstances he did not consider this as a      fit  case  to  be  proceeded  with  by  the  Settlement      Commission."      This objection was in the normal course neither foolish nor futile  but fatal, being in functional fulfilment of the requirements of  the second  proviso to  s. 245D(l). Indeed, when  we   observe  that   the   C.I.T.   had,   with   full responsibility, prosecuted the assessee in a number of cases then pending  for  offences  which  attract  the  conditions required by  the second  proviso, there is little difficulty in holding  that the application for settlement, having been rejected by  the Commissioner,  could not be proceeded with. The  veto   of  the   Commissioner  the   Waterloo  of   the application.

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    The Settlement  Commission, however, took the view that the Commissioner  was estopped  from exercising his power to object  and   for  this  reason  ignored  the  veto  of  the Commissioner and  proceeded to  process the  application  in terms of sub-ss. (2) to (S) of s. 245D. The core controversy in this  appeal is  as to whether the view of the Settlement Commission that the veto is unavailable for the Commissioner in view  of his earlier stand in regard to the withdrawal of appeals is valid or not.      After setting  out the  course of  events  and  earlier readiness of  this Department  to withdraw  its  appeals  to enable  the   Commission  to   be  moved   by  the  assessee notwithstanding the  pendency  of  the  criminal  cases  and having regard  to the  absence of  any new  material, having been discovered  justifying a reversal of the C.I.T’s stand, the Commission  took the  view that  the  rule  of  estoppel forbade the  appellant from  objecting to  the  Commission’s proceedings with the application of this assessee. It argued itself in to that conclusion thus:           In this particular case, in view of the withdrawal      of the  Departmental  appeals  before  the  Income  Tax      Appellate Tribunal,  the Commissioner  is estopped from      making a  report under section 245D(l) Proviso 2 to the      Settlement Com  mission objecting  to  the  application      from being proceeded 1149      with. The  objection raised by the Commissioner is thus      in- A  valid in  law and any objection which is invalid      in  law,  for  the  reason  discussed  earlier,  is  no      objection under  the second  proviso to section 245D(l)      and the Commissioner is competent to ignore it applying      the principles  of law, equity and natural justice. The      Settlement  Commission,   is  therefore,   entitled  to      proceed with the application.           In this  case it  is not shown before us nor it is      the Department’s  case that between 24th December, 1976      and 7th  January, 1977,  the Commission  had brought on      record any  fresh materials  to come  to the conclusion      under which  he could  legitimately raise the objection      under the second proviso to section 245D(l) once having      entitled the  assessee to make the application under s.      245M(l) proviso.  Filing of a complaint for launching a      prosecution earlier  is not  a relevant  matter for the      exercise of  jurisdiction under  the second  proviso to      section 245D(l) at this stage in the light of the facts      brought before  us and  elaborately  discussed  in  the      earlier paragraphs.  This is  a clear case in which the      applicant was  prevailed upon  to withdraw  the appeals      for the  additional two  assessment  year  1972-73  and      1973-74 where  very large  and  substantial  sums  were      involved compared  to the ten assessments’ from 1962-63      to 1971-72  where  cross  appeals  were  agreed  to  be      withdrawn by  either side.  On  the  admission  of  the      learned  Departmental   Representative   himself,   the      Departmental appeals  were frivolous  and not likely to      succeed on  appeal. We  are, therefore,  of the opinion      that for a harmonious construction of the statute, in a      case falling  under Section  245M the second proviso to      section 245D(l) cannot be read in isolation but only in      conjunction with  the 1st  proviso to  Section 245M(l).      Under Section  245D(l) the Commission has to decide the      admission on  the basis  of the  materials contained in      the report of the Commissioner and having regard to the      nature and  circumstances of the case or the complexity      of investigation  involved therein. The entire facts of

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    the case  clearly indicate  that the Revenue came to an      understanding with the applicant to have the subsequent      exercise of  the power  under  the  second  proviso  to      Section 245D(l)  without  any  fresh  material  is,  11      therefore, no  ground to  dislodge  the  right  of  the      assessee to come before the Commission. 1150      We have  earlier clarified  that an  I.T.A.T. is not an Income-Tax authority  and proceedings  pending  before  such tribunals are not cases. But s. 245M takes care of assessees whose appeals  pend before  the I.T.A.T.  but are anxious to square  up   their   litigation   through   the   Settlement Commission. A  close-up of this provision is necessitous and a reading  of its  full range  of meaning is decisive of the subject of this appeal.      We may  skip ss  245E, and but dwell for a moment on s. 245H which  is of  great moment  from the  angle  of  public interest and  public morals  as it  immunises  white  collar offenders against criminal prosecutions and, in unscrupulous circumstances, becomes  a suspect  in strument of negotiable corruption. More than the prospect of monetary liability and mounting penalty  is the  dread of  traumatic prison tenancy that a  tax-dodging tycoon  is worried  out. And  if he  can purchase freedom from criminal prosecution and incarceratory sentence he  may settle  with the  Commission; and,  towards this  end,  try  to  buy  those  who  remotely  control  the departmental echelons  whose veto  or green signal closes or opens the  jurisdiction of  the  Settlement  Commission  and hushes or  pushes the  prosecutions. Thus,  s.  245H,  which c1othes the Commission with the power to grant immunity from prosecution for  ’any offence  under this  Act or  under the Indian Penal  Code or  under any  other Central Act.. ’ is a magnet  which   atracts  large   tax-dodgers   and   offers, indirectly an  opportunity to  the highest  departmental and political authorities a suspect power to bargain.      We may  now move  straight  on  to  s.  245M  which  we reproduce:           245M. Certain  persons who  have filed  appeals to      the Appellate  Tribunal entitled to make application tc      the Settlement Commission.-           (1)  Notwithstanding anything  contained  in  this                Chapter, any assessee who has filed an appeal                to the  Appellate  Tribunal  under  this  Act                which  is   pending  before   it  shall,   on                withdrawing such  appeal from  the  Appellate                Tribunal, be  entitled to make an application                to the Settlement Commission to have his case                settled under this Chapter:      Provided that  no such  assessee shall  be entitled  to      make an  application in  a case  where the  Income  tax      officer has  preferred an  appeal under sub-section (2)      of section  253 against  the order  to which  the asses      see’s appeal relates. 1151           (2)  Any assessee  referred to  in sub-section (1)                may A  make an  application to  the Appellate                Tribunal for  per  mission  to  withdraw  the                appeal.           (3)  On  receipt  of  an  application  under  sub-                section (2),  the  Appellate  Tribunal  shall                grant permission to withdraw the appeal. B           (4)  Upon  the   withdrawal  of  the  appeal,  the                proceeding in  appeal immediately before such                withdrawal shall,  for the  purposes of  this                Chapter, be deemed to be a proceeding pending

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              before an Income-tax authority.           (5)  An application  to the  Settlement Commission                under this  section shall  be made  within  a                period of  thirty days from the date on which                the order of the Appelate Tribunal permitting                the withdrawal  of the appeal is communicated                to the assessee.           (6)  An  application   made  to   the   Settlement                Commission under this section shall be deemed                to be  an appli cation made under sub-section                (1) of  section 245C  and the  provisions  of                this  Chapter   (except  sub-section  (7)  of                section 245(D) shall apply accordingly.           (7)  Where an  application made  to the Settlement                Commission  under   this   section   is   not                entertained  by  the  Settlement  Commission,                then, the  assessee shall  not be  deemed  to                have withdrawn  the appeal from the Appellate                Tribunal  and  the  provisions  contained  in                section 253,  section 254  and  section  255,                shall, so far as may be, apply accordingly.      Briefly, the  section (a) enables withdrawal of appeals before Tribunals  by assessees  as  condition  precedent  to applications . for composition by the Settlement Commission, (b) applies,  by a  legal fiction,  ss.  245C  and  to  such applications  and   (c)  where  the  proceeding  before  the Commission is  not entertained,  allows revival of the with- drawn appeals  thus restoring  the status  quo ante. This is but fair  because the  assessee should  not  suffer  if  the Settlement Commission bars ib doors.      The facts  of our case show that the assessee had filed appeals before  the Tribunal  and had  later moved for their withdrawal in  terms of  s. 245M(1), (2) and (3). Sub-s. (4) thereupon opened  and by  virtue of sub-s. (6) the mechanics of ss. 245C and spraing into 1152 action. It  would have  been  smooth  sailing  but  for  the proviso to s. 245M(l), which runs thus:           Provided that  no such  assessee shall be entitled      to make  an application  in a case where the Income-tax      Officer has  preferred an  appeal under sub-section (2)      of  section   253  against   the  order  to  which  the      assessee’s appeal relate.      Thus there  is an  embargo on the right of the assessee to move  the Commission  ’where the  Income-tax officer  has preferred an  appeal under  sub s. (2) of 6. 253 against the order to  which the  assessee’s appeal relates’. The Revenue had preferred  appeals here  but later  withdrawn them. Does such withdrawal  amount to not having preferred an appeal at all ?      The crucial  question, therefore,  is as to whether the assessee is  disentitled altogether  to make  an application before a  Commission because  the  Income  Tax  officer  has already preferred  an appeal to the I.T.A.T. although he has subsequently withdrawn it.      Does filing the appeal ipso facto imply that the die is cast  and   withdrawal  thereof   cannot  whittle  down  its preventive impact? We will presently discuss this point.      We must  clarify that  this legal bar to the Settlement Commission’s jurisdiction  contained in  the proviso  to  s. 245M was  not urged  by the  applicant’s counsel  before  us consistently with  the stand  the Department  had throughout taken in  this case.  But law,  as laid  down by this Court, transcends the  facts of  a given case or stances of parties or counsel

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    Here the Department did file appeals and later withdrew them be fore the application for settlement was made. At the time the  application before  the Settlement  Commission was moved  no  departmental  appeal  was  pending.  Indeed,  the documents in  this case  clearly point  to the assumption by the C.I.T. and the assessee that if the Revenue withdrew its appeal the  disentitlement in  the proviso  would disappear. Even so, when an appeal is filed by the I.T.O., does not the prohibition operate?  This turns on the meaning of the words "preferred an appeal". "Preferred" is a word of dual import: its semantics  depend on  the scheme  and the  context;  its import must  help, not  hamper, the  object of the enactment even if liberty with language may be necessary. 1153      There is  good ground  to think that an appeal means an effective appeal.(l)  An appeal  withdrawn is  an appeal non est as judicial thinking suggests.(2-3)      Black’s Law Dictionary gives the following meaning:           PREFER: To  bring before;  to prosecute; to try to      proceed with.  Thus, preferring an indictment signifies      prosecuting or trying an indictment.           To give  advantage,  priority,  or  privilege;  to      select for  first payment,  as to  prefer one  creditor      over others. Thus  it  may  mean  ’prosecute’  or  effectively  pursue  a proceeding or merely institute it. Purposefully interpreted, preferring an  appeal means more than formally filing it but effectively pursuing  it. If  a party  retreats  before  the contest begins it is as good as not having entered the fray. After all, Chapter XIXA is geared to promotion of settlement and creation  of road-blocs  in reasonable compositions. The teleological method  of interpretation  leads us to the view that early  withdrawal of the I.T.O’s appeal removes the bar of the Proviso.      The problem that troubles us arises from s. 245M(7). If a settlement  application is not entertained and is rejected in limine  there is  a statutory  revival of  the assessee’s appeal before the I.T.A.T. because of the deeming provision, but what  happens to  the appeal  of  the  I.T.O.  which  he withdraws to  enable the I.T.O to file an application before the Commission  ? Literally  read,  s.  245M(7)  covers  the revival of  the  assessee’s  appeals  but  not  the  I.T.O’s appeals.  The  inference  from  this  omission  is  that  no occasion arises  for revival  of the I.T.O’s appeals because once he files an appeal no application for settlement can be made. That  is to  say, the proviso to s. 245M(l) interdicts entertaiment of  a settlement  application  if  departmental appeals are filed.      This interpretation narrows the benign amplitude of the Chapter of  attracting as  many big  assessees with disputed claims as  are ready to settle their liabilities through the Commission. There  may be  cases where  the A.A.C. has given partial relief  to  the  assessee  and  both  sides  may  be aggrieved. Both  sides may  have filed  appeals. There is no understandable ground  to exclude  the possibility  of  such cases being  settled merely  because the I.T.O. has, perhaps for  good   reasons,  filed   an  appeal.   The  purpose  of substituting the  method of  investigative negotiation, just settlement and early exigibility by a high-powered      (1) 31 S.T.C. 434.      (2) 21 S.T.C. 154,52 I.L.R. 780;      (3) 1973 31 S.T.C. 434. 1154 Commission for a tier-up-tier of long-protracted litigation, where victory  may be  phyrrhic and futile, is ill-served by

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keeping out  cases solely  for the  reason that departmental appeals have  been filed.  To truncate  the operation of the salutary provisions of Chapter XIXA more substantial reasons must be present. Of course, if no alternative interpretation is possible,  it is  not for the court to explore intendment of the  legislation beyond the language in which the Section is couched.      However,  there   is  an   alternative  meaning   which reconciles the  rationale of  settlement with the embargo of the Proviso.  If we  read into  the words "prefer an appeal" the sense  of effectively  prosecuting an  appeal, then mere institution followed  by withdrawal  will cancel  the effect result in  non-prosecution and  obliteration of  the appeal, which is  the same  as not preferring an appeal. The meaning of "prefer"  as given in the Black’s law Dictionary supports This construction.  Among  available  semantic  options  law prefers that which furthers the statutory objective.      The possible  obstacle in  adopting this interpretation is that  while the  assessee’s appeal  gets revived when the Commission rejects  an application,  the I.T.O.’s  appeal is not  resuscitated  under  s.  245M(7).  Even  this  is  more imaginery  than   real  and   depends  on  over-emphasis  on verbalism. After  all, the  clause we have to decode is "the assessee shall " be deemed to have withdrawn the appeal from the appellate  tribunal’’. The obvious object of this clause is to  restore the  parties  to  status  quo  ante,  and  in fairness, must  apply to  the Department as to the assessee. This non-discriminatory  import can  be resonably  read into the clause if we construe the expression the "assessee" in a wider way  so as  to include  all parties  affected  by  the subject matter  of the  assessment. In that case, the clause may mean  that no  one who  is aggrieved  by the  assessment shall "be  deemed to  have withdrawn  the  appeal  from  the appellate  tribunal."   An  equitable   and  purposeoriented construction of  the clause  means that the assessee will be put back  in the same position vis-a-vis his appeals and if, to facilitate  his moving  the Commission,  the  l.T.O.  has withdrawn  the   departmental  appeals,   the   Commission’s rejection  of   the  application  shell  not  prejudice  the Revenue. Actus  curie neminem  gravabit is  the principle of wider import and is a tool of construction too. This perhaps may be  making up  for a  lacuna by  a restructuring  of the clause so  at to  work out  justice to  the Department.  The scheme of  s. 253(4)  contemplates filing  of memorandum  of cross objections  by the  I.T.O. On  receipt of notice of an appeal by the assessee. So much so, it is 1155 also possible,  alternatively, to  read into  s. 245M(7) the right of the Department to file an appeal de novo on receipt of notice  of the  revival of  the assessee’s appeal, within the period specified in s. 253(4). This does not do violence to the language of Is. 245M(7) and affords eequitable relief to the Department by enabling it to bring its appeal back to life notwithstanding the earlier withdrawal, when the asses- see’s appeal reincarnates under s. 245M(7).      We are mindful that a strictly grammatical construction is departed  from in  this process  and a mildly legislative flavour is  imparted by  this interpretation.  The  judicial process does  not  stand  helpless  with  folded  hands  but engineers  its   way  to   discern  meaning   when   a   new construction, with a view to rationalisation is needed. Lord Denning, in  his recent book "The Discipline of Law"(l) made a seminal  observation  on  "Ironing  out  the  creases"  by quoting  a  passage  from  Seaford  Court  Estates  Ltd.  v. Asher(2).

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         "Whenever a  statute comes up for consideration it      must be  remembered that  it is not within human powers      to foresee  the manifold sets of facts which may arise,      and, even if it were, it is not possible to provide for      them in  terms free  from all  ambiguity.  The  English      language  is   not  an   instrument   of   mathematical      precision. Our  literature would  be much the poorer if      it were.  This  is  where  the  draftsmen  of  Acts  of      Parliament  have  often  been  unfairly  criticised.  A      judge, believing himself to be fettered by the supposed      rule that  he must  look to  the language  and  nothing      else, laments  that the draftsmen have not provided for      this or  that, or  have beer,  guilty of  some or other      ambiguity. It  would certainly  save the judges trouble      if  Acts   of  Parliament   were  drafted  with  divine      prescience and  perfect clarity.  In the absence of it,      when a  defect appears  a judge  cannot simply fold his      hands and  blame the  draftsman. He must set to work on      the constructive  task  of  finding  the  intention  of      Parliament and  he must  do  this  not  only  from  the      language of  the statute, but also from a consideration      of the  social conditions which give rise to it, and of      the mischief which it was passed to remedy, and then he      must supplement  the written  word so as to give ’force      and life’ to the intention of the legislature. That was      clearly laid  down by  the resolution  of the judges in      Heydon’s case,  and it  is the safest guide today. Good      practical advice  on the  subject was  given about  the      same time      (1) p. 12.      (2) (1949) 2 K. B. 481. 1156      by Plowden....Put  into homely  metaphor  it  is  this:      judge should ask himself the question: If the makers of      the Act  had themselves  come across  this ruck  in the      texture of  it, how would they have straightened it out      ? He must then do as they would have done. A judge must      not alter the material of which it is woven, but he can      and should iron out the creases      The upshot  of the  discussion is  to hold  that if the Department files  an appeal  which it  drops  to  enable  an application before  the Commission,  then the  Proviso to s. 245M(l) does not debar the motion for settlement.      The preliminary objection raised by Shri A. K. Sen need not detain  use because  we are satisfied that the amplitude of Art.  136 is wide enough to bring within the jurisdiction orders passed  by the  Settlement Commission.  Any judgment, decree, determination,  sentence or  order in  any  case  or matter passed or made by any court or tribunal, comes within the correctional  cognizance and  review power  of Art. 136. The  short   question,  then,   is  whether  the  Settlement Commission cannot  come within  the category of "Tribunals". To clinch the issue, s. 245L declares all proceedings before the Settlement  Commission to  be judicial  proceedings.  We have hardly  any doubt that it is a tribunal. Its powers are considerable;  its   determination  affects  the  rights  of parties; its  obligations are  quasi-judicial; the orders it makes at  every stage  have tremendous  impact on the rights and liabilities  of parties.  WHERE a  body  is  created  by statute and  clothed with  authority to determine rights and duties of  parties and to impose pains and penalties on them it satisfies  the test  laid down  in Associated  Cement Co. case(l). A  Constitutional Bench  of this Court in that case has indicated  the quintessential test in this regard and we need only  extract a  portion of  the head-note  relevant to

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this aspect:           "In considering  the question  about the status of      any body  or authority as a tribunal under the article,      the con sideration about the presence of all or some of      the trappings  of a  court is  really not decisive. The      presence of  some  of  the  trappings  may  assist  the      determination of  the question  as to whether the power      exercised by  the authority  which possessed  the  said      trappings, is  the judicial  power of the State or not.      The main  and  basic  test,  however,  is  whether  the      adjudicating power  which  a  particular  authority  is      empowered to exercised has been      (1) Associated Cement Co. Ltd. v. P. N. Sharma & Anr. [ 1965] 2 S. C. R. 366 1157      conferred on it by a statute and can be described as, a      part  of   the  State’s  inherent  power  exercised  in      discharging its judicial function."(1)      The expanding jurisprudence of administrative tribunals to which  some eminent judges, cradled in Dicean concepts in the early  days of  English law, has come to stay whether we call it  the new  despotism or the pragmatic instrumentality of dispensing  justice untrammelled  by the complexities and mystiques which  are part  of  the  processual  heredity  of courts. The Franks Committee rightly said :(2)           "Reflection on  the general  social  and  economic      changes of  recent decades  convinces us that tribunals      as a system for adjudication have come to stay."      "The advantage  which tribunals had over courts" states Seervai in  his classic  work on  the Constitution  of India "lay in  cheapness, accessibility, freedom from technicality expedition  and  expert  know-  ledge  of  their  particular subject."(’) A  casual perusal of Chapter XIXA convinces the discerning eye that the Settlement Commission exercises many powers which  affect, for  good or  otherwise, the rights of the parties  before it  and vests  in  it  powers  to  grant immunity from  prosecution and  penalty, to investigate into many matters  and  to  enjoy  conclusiveness  regarding  its orders or  settlement. In  short, Settlement Commissions are Tribunals. The  preliminary point  fails and  we proceed  to consider the triple substantial questions set out earlier.      The two  gut issues  that must now engage us take us to the turn  of events surrounding the withdrawal of appeals by both sides.  To complete  the  story-and  this  fact  has  a bearing on one of the legal questions-it must be stated that when the  Settlement Commission first acted under the Second Proviso  to  s.  245D(l),  the  Department,  even  like  the assessees, applied  to  the  I.T.A.T.  for  revival  of  its appeals although s. 245M(7) does not make any such provision for revival of the I.T.O’s appeals.      In ordinary circumstances the 2nd Proviso to s. 245D(l) is easy of construction and the exercise is also simple. The assessee applies to the Commission, thereupon the Commission shall  call   for  a   report  from  the  Commissioner.  The Commissioner may object to the appli- (1) Ibid. p. 366 (2)  Franks   Committee  on   Administrative  Tribunals  and Enquiries p. 8 (3) Franks  Committee Report, p. 9, quoted by Seervai in his Constitutional Law of India p. 1226. 1158 cation being  proceeded with on the grounds specified in the second Proviso  to sub-s.  (1) of  s. 245D. If he so objects the application  "shall not  be  proceeded  with".  This  is express, explicit  and mandatory.  Where an  application  is

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allowed to be proceeded with under subs. (1), the Settlement Commission may  call  for  the  relevant  records  from  the Commissioner and hold further enquiry. Thus, the Commissions power to  proceed with  the application  can be paralysed by the  Commissioner   objecting  to   the  application   being proceeded with.  In our  case the  Commission called  for  a report from  the Commissioner  and the Commissioner objected to  the  application  being  proceeded  with  whereupon  the Commission declined  to proceed  with the application But on the assessee’s  motion for  review of  that order  which was passed  without   hearing  him,  fresh  consideration  after hearing both  sides followed  and the  Commission decided to proceed with  the application  holding that the Commissioner was estopped from objecting. The crucial question is whether the  Commissioner’s   statutory  power   to  object  to  the Settlement proceedings  on the  ground of  the  presence  of grave deviances  mentioned in Proviso 2 to s. 245D(l) can be nullified by  the doctrine  of estoppel  and if  it  can  be whether there are grounds to hold that a plea of estoppel is sustainable in the circumstances      We must realise that the Commissioner has a duty to the public Revenue  and, more  importantly, a  duty to object to any assessee  who is  prima facie  guilty of  grave criminal conduct  in   the  shape   of  concealment   of  income   or prepetration of  fraud getting  away  with  it  by  invoking Chapter XIXA.  The Wanchoo  Committee  was  mindful  of  the benefits of  a policy  of  collection  of  tax  without  pro tracted litigation  through the  machinery of the Settlement Commission but the potential for escape by the big whales of economic  crime  by  resort  to  the  Settlement  Commission engaged the  Committee conscience.  So it expressed the view that it  was "of  paramount importance that only persons who are known  for their integrity and high sense of justice and fairness  are  selected  for  appointment  on  the  Tribunal (Settlement Commission).  This was  a  pious  wish  and  the Committee went  further to guard against fraud and to uphold the paramount principles, more important than physical gains and losses,  of economic  offenders being punished by arming the Commissioner  with the  right  to  object  to  the  very entertainment of  the application.  "We consider  that  this will be a salutary safeguard, because otherwise the Tribunal (Settlement Commission) might become an escape route for tax evaders who  have been  caught and  who  are  likely  to  be heavily penalised or prosecuted." The gravity of this public policy cannot  he undermined  by interpretative  softness of Second Proviso to 1159 s.245D(1) To whittle down the imperative nature of this veto power is  to undo  the expectations of the Wanchoo Committee and amounts  to stultify the rule of law an integral part of which is that the law shall not let the greater felon loose. Can the  rule of  estoppel override a statutory mandate of a prohibitory character  calculated to inhibit/escape from the coils of the law crime?      Moreover,  we   to  have   to  examine,   assuming  the application of  the rule  of estoppel,  where the  basics of that rule of a clear representation having been made by A to B and the latter on the face of representation action to his detriment can be spun out of the circumstances before us.      Now we  come to  the meat  of the  matter-the  plea  of estoppel or  its variants.  The C.I.T.’s  objection  to  the jurisdiction of  the Commission  to proceed  with the matter has been  shot down  by the artillery of estoppel. The order under appeal  proceeds to  hold that  a  conspectus  of  the circumstances of  the case  compels the  conclusion that  an

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understanding had  been reached between the assessee and the C.I.T., evidenced  by mutual  withdrawal of their respective appeals before  the I.T.A.T.,  that the  Commission would be permitted to  explore a  settlement; and  so, the  statutory veto available to the C.I.T. to interdict the enquiry by the Commission could  not be  exercised because  he was estopped from so doing, resiling from his earlier stand. The argument has an  attractive veneer  or cosmetic charm but law is more than skin-deep  and courts peep beneath to see the principle of equity and justice thereby promoted.      What, in  essence, is  estoppel? Estoppel  is a rule of equity which  forbids truth being pleaded or representation, on which  faith another  has acted  to his deteriment, being retracted. Even  extending the  rule  into  the  new-fangled empire of  promissory estoppel,  it  cannot  go  beyond  the limits of  the Law  Revision Committee in England which Lord Denning allowed to blossom in the High Trees case.(1)           "We therefore  recommend that  a promise which the      promisor knows,  or reasonably  should  know,  will  be      relied upon  by the  promisee, shall  be enforceable if      the promisee  has altered his position to his detriment      in reliance on the promise."      The soul  of  estoppel  is  equity,  not  facility  for inequity.  Nor   is  estoppel  against  statute  permissible because public  policy animating  a statutory  provision may then  become  the  casualty.  Halsbury  has  11  noted  this sensible nicety. (1) [1947]  1 KB  130-also see  "Discipline of  Law" by Lord Denning, p. 202. 1160           "Where a  statute, enacted  for the  benefit of  a      section of  the public,  imposes a  duty of  a positive      kind, the  person charged  with the  performance of the      duty cannot  by estoppel  be prevented  from exercising      his statutory powers.’’(l)           "A petitioner  in a  divorce  suit  cannot  obtain      relief simply  because the  respondent is estopped from      denying the  charges, as the court has a statutory duty      to inquire into the truth of a petition."(2)      The luminous footnote cites rulings and states that           "This rule probably also applies where the statute      bestows a discretion rather than imposing a duty."(3)      To sum  up, where  public duties  cast by  statute  are involved, private  parties  cannot  prevent  performance  by invoking estoppel. We do not discuss further since the facts here exclude estoppel.      In the  present statutory  situation s. 245D by the 2nd Proviso, casts a public duty on the Commission of Income Tax to consider,  in the  light of  the case  made  out  in  the assessee’s application,  whether "concealment of particulars of income  on the  part of  the applicant or perpetration of fraud by  him for evading any tax or other sum chargeable or imposable under  the Indian  Income-tax  Act,  1922  (11  of 1922), or  under this Act, has been established or is likely to be  established by  any Income-tax authority, in relation to the  case", and exercise his veto power to prevent escape of macro-criminals  prima facie  guilty  of  grave  economic crimes. He  cannot bargain over this interdict in advance or barter away  a legal  mandate in anticipation. He may permit or even  assist the  filing of  a conciliation motion by the assessee but when the Commission intimates him under s. 245D (1) he  shall,  with  statutory  seriousness,  exercise  his discretion. He  cannot enter  into a  ’deal’ over this power without betraying  the statutory  trust. We cannot therefore accept the  plea that  the Commissioner  of Income  Tax,  by

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conduct and  ’understandings’ has  ’irredeemably  mortgaged’ his statutory  duty to  object, if  the case  deserves  such objection. Estoppel  then is  both odious  and  ominous  and discretion the door to corruption.      Even otherwise,  there must be an active representation proceeding from  the functionary  sought to  be  muzzled  by estoppel and the (1)  Maritime Elec. Co Ltd v. General Diaries Ltd. [1937] AC      610 and Halsburys Laws of England para 1515. (2)  Hudson v.  Hudson [1948]  p. 292  and Halsburys  Law of      England para 1515. (3)  Halsbury, 4th Edn. p. 1019. 1161 pleading party must have acted to his detriment on the faith of the  said representation or futuristic promise. Here, the C.I.T. made  no representation  to the  assessee. He  merely yielded to the latter’s persuasion. Nor did the assessee act on any  representation of  the C.I.T.  The withdrawal of his appeal was  not because  of or  induced by  the  C.I.T.  The Commissioner never  asked him  to withdraw  his appeals  but when asked  by the  assessee to  withdraw  the  departmental appeals did so on condition that the other also withdrew his appeals. Granting  that the C.I.T. did facilitate the motion before the Commission, it did not mean that the assessee did anyhing to  his detriment. Moreover, there was and could not be any  representation or even negotiation, (except illicit) regarding the  exercise of  the statutory function under the 2nd Proviso  in advance of the filing of the application for settlement.      Even on  grounds of  public policy,  it will be lending legal colour  to  hushing  up  prosecutions  of  high-placed offenders by  an unjust  extension of  the rule of estoppel. Bargaining between  tax authorities  and big  assessees over criminal prosecutions  and the  like is  beset with  corrupt potential that  a court of conscience cannot succumb to such a rule of estoppel.      Apart from the jural untenability of the contention let us see  if the  factual matrix  supports the  claim. A close look at  the foundational  facts will  reveal the fallacy of the plea of estoppel.      Is mere  ’understanding’ or ambiguous conduct the stuff of which the fabric of estoppel is made? We find the case of the respondent  a rope  of sand,  a route to fraud, a permit for non-performance of public duties. The assessee takes the initiative and beseeches the In- come Tax Department to help him, move  the  Settlement  Commission  by  withdrawing  its appeals. The  story, when  unfurled, shows  how the assessee acted on  his own independently of the Department, never had any blanket assurance from the latter about non-objection to the later stages of the application whatever be the guilt of the assessee  vis-a-vis  the  2nd  proviso  to  s.  245D(l), defeating the statutory efficacy of the provision.      It  all   begins  chronologically   with  the  assessee respondent  representing   to  I.T.A.T.  On  23-8-1976,  the following:           Re:  I.T.  appeals  in  the  name  of  Sri  B.  N.      Bhattacharjee for  the Asst.  years 1962-63, 63-64, 64-      65, 65-66,  66-67, 67-68,  68-69, 69-70,  70-71, 71-72,      72-73 and 73-74. 18-409SCI/79 1162           Sub: Prayer  u/s 245M  of the  I.T. Act,  1961 for      withdrawal of appeals.      With regard  to the  above I beg to submit that all the above appeals I have filed on 12-9-75 but now I like to have

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my cases  settled by the settlement Commission and as such I may kindly  be allowed  to with  draw all  the above  twelve appeals u/s  245M of  the I.T. Act, 1961. The matter is very much urgent  and the  settlement petition  is  to  be  filed within a  day or  two before  the Settlement Commission, New Delhi.      Pray that  an early  order of  the  appellate  Tribunal permitting the  withdrawal of  all  the  above  appeals  may kindly be  issued to me and for this act of kindless I shall ever pray. Dt. 23-8-76.                                             sd. S. N. Mandal      At this  time the Department had done nothing to induce him to  withdraw his  appeals or move the Commission to that effect. It  was a  unilateral act of his and if the I.T.A.T. allowed him to withdraw, that was not because of the C.I.T’s conduct but  the compulsion  of s.  245M(3). If  at all, the assessee was  chasing the Department and falling at its feet seeking mercy  and praying  for withdrawal of its appeals as is evident from Annexure which runs thus: Dear Sir.           I have  instructed my  counsel to  withdraw all my      Tribunal appeals  to enable  me to file petition before      the Settlement  Commission stop  l seek  your mercy and      sympathy by  with drawing APPEAL FILE by the Department      so that  I can  file my  Settlement Petition  here  for      settlement stop I assure you my full co-operation and I      want settlement  bonafide and I am acting in good faith      stop I pray for your kind consideration and cooperation      stop      25-5-76.                                 Esteem Regards                                             B. Bhattacharjee                                              Camp: New Delhi How can  this craven  attitude be  converted into  a conduct induced by  the Department  detrimental  to  the  assessee’s interest? Even  the latter  letter to Shri Kuruvilla, Member Central Board  of Direct Taxes is plaintive and supplicative and not  indicative of  any representation by the Department to the assessee leading to the latter’s action to his 1163 Own prejudice.  In fact, Annexure F dated September 10, 1976 winds up:           "1. I  shall be  grateful, if you would kindly ask      your department  to withdraw  all the  pending  appeals      filed by the Department with I.T.A.T.           Lastly  if   the  Department  find  any  technical      difficulties I  am prepared  to swear  my affidavit  to      protect the  interests of  the department. I assure you      my full  cooperation with the department in arriving at      a reasonable settlement of the cases. I am writing this      in a  good faith. I am enclosing herewith the photostat      copies of  the correspondences for your kind and benign      consideration."      We have  earlier recounted the further developments and all that  has happened is a communication from the C.I.T. to the assessee  dated December  16, 1976  which is  cryptic in terms:           "I am  to inform you that the departmental appeals      pending  before   the  Income-tax  Appellate  Tribunal,      Calcutta against you will be withdrawn provided all the      appeals filed by you for the assessment year 1962-63 to      1973-74 are withdrawn by you." It is incredible that the tone, sequence and the context and pouring subjective  wine into  the vessel of words used, the Commission should interpret this communication to reflect an

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understanding of words a representation by the department to the assessee  to do  a thing  to his  prejudice whereupon he acted that  way laying the basis for a plea of estoppel. Far from the  Revenue making  any positive representation to the assessee it  was a  case of  concession shown  to him to his chance  before  the  Commission.  This  is  clear  from  the assessee’s petition  to the  Tribunal dated 17-12-76 wherein he states-           "... now the learned C.I.T., Central, Calcutta has      very  kindly  agreed  to  withdraw  their  Departmental      appeals for  the assessment years 1962-63 to 1971-72 on      condition that  your petitioner would also withdraw all      the appeals for 1962-63 to 73-74 assessments."      It is  true that the C.I.T. withdrew the appeals of the Department,  but   it  is   not  true   that  he   made  any representations to  the assessee  to  act  in  a  particular manner with  a promise  of doing  something to his advantage leading to  the assessee in turn acting to his own prejudice by withdrawing  his appeals.  His withdrawal  of the appeals was in- 1164 dependently decided  upon by  him so  that he could move the Corn mission. Thereafter he moved the Department to withdraw its appeals  so as  to entitle him to make an application to the Commission.  The order  of the  I.T.A.T. dated  24-12-76 makes it  clear  that  it  granted  permission  to  withdraw appeals because:           "The  learned   departmental  representative  Shri      Narayanan also  had no  objection to  permission  being      granted for withdrawal of the appeal."      We need  not overload  this judgment with more extracts from letters  and petitions  because it  is abundantly clear that the  basics of equitable estoppel are blissfully absent and the  canons that govern the application of the principle contradict its  extension to  a situation  like the present. We, therefore, overrule the plea of estoppel which has found favour with  the Commission  and  hold  that  the  objection raised  by   the  C.I.T.   is  a  potent  interdict  on  the jurisdiction of the commission.      It is not inappropriate to state that the policy of the law as  disclosed in Chapter XIXA is not to provide a rescue shelter  for   big  tax-dodgers   who  indulge  in  criminal activities by  approaching the  Settlement  Commission.  The Settlement Commission  will certainly  take due  note of the gravity of  economic offences  on the  wealth of  the nation which the Wanchoo Committee had emphasised and will exercise its 15  power of  immunisation against criminal prosecutions by using  its power  only sparingly  and in deserving cases; otherwise such  orders may  be come  vulnerable if  properly challenged.      Thus, a  holistic perspective  in the correct statutory setting makes  the conclusion  irresistible that  the appeal must be  allowed, that  the Settlement  Commission should be inhibited  from  proceeding  with  the  application  of  the assessee and the appeals by the assessee before the I.T.A.T. must  be   revived  and   disposed  of   expeditiously.  The departmental appeals,  having been  admitted by  the  C.I.T. himself to be very weak and frivolous, should not be revived as it  will be only a waste of public time and public money. The appeals  are allowed,  but in  the circumstances  of the case, the parties will bear their costs. N.V.K.                                      Appeals allowed. 1165

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