Notice under Section 245D(6B)

Section 245D(6B):

“The Settlement Commission may, to rectify any mistake apparent from the record, amend any order passed by it under sub-section (4) at any time within six months from the end of the month in which the order was passed, provided that an amendment which has the effect of modifying the liability of the applicant shall not be made unless the Settlement Commission has given notice to the applicant and the Commissioner and has allowed them an opportunity of being heard.”

Understanding Section 245D(6B)

1. Rectification of Mistakes:
   • The Settlement Commission is empowered to rectify any mistake apparent from the record in its orders. This ensures that any apparent errors can be easily identified without detailed examination or arguments are corrected promptly.
2. Time Limit:
   • The rectification must be made within six months from the end of the month the original order was passed.
3. Opportunity to Be Heard:
   • If the rectification involves modifying the applicant’s liability (taxpayer), the Settlement Commission must notify the applicant and the Commissioner, allowing them to be heard before making the amendment.

Example:

Suppose the Settlement Commission passes an order on 15th January 2023 and later identifies a mistake apparent from the record. In that case, the rectification must be completed by 31st July 2023 (six months from the end of January 2023).

Purpose:

Section 245D(6B) ensures that the Settlement Commission’s orders are accurate and error-free. This provision helps maintain the integrity of the settlement process and ensures that justice is served by correcting mistakes apparent from the record.

Legal Implication:

Failure to rectify an apparent mistake within the stipulated time frame can result in the error remaining uncorrected, which may affect the fairness and correctness of the order. If the rectification involves an increase in the taxpayer’s liability, it cannot be done without providing an opportunity for the taxpayer to present their case.

Legal Recourse:

1. Filing Objections:
   • If a taxpayer receives a notice under Section 245D(6B), they can file objections with the Settlement Commission challenging the proposed rectification.
2. High Court:
   • If the rectification order does not favour the taxpayer, they can approach the High Court for judicial review of the decision on grounds of law or procedural lapses.
3. Supreme Court:
   • For significant questions of law, the taxpayer can approach the Supreme Court.

Penalties and Prosecution:

1. Penalties:
   • Generally, rectification of mistakes under Section 245D(6B) itself does not directly involve penalties. However, if the rectification results in the discovery of concealed income or inaccurate particulars, penalties under Section 271(1)(c) (for concealment or inaccurate particulars) could be applicable.
2. Prosecution:
   • Prosecution under Sections 276C (wilful attempt to evade tax) and 277 (false statement in verification) could arise if the rectification uncovers wilful evasion or fraudulent activities, with penalties including imprisonment and fines.

What to Do If Notice Is Received:

1. Review the Notice:
   • Carefully review the notice to understand the reasons for the proposed rectification and the documents or information required.
2. Consult a Tax Professional:
   • Seek advice from a qualified tax consultant or chartered accountant to understand the implications and prepare a response.
3. Prepare Documentation:
   • Gather all relevant documents, records, and evidence to support your case.
4. File a Response:
   • Respond to the notice within the stipulated time frame, providing all required information and documentation.
5. Attend Hearings:
   • If required, attend any hearings scheduled by the Settlement Commission and present your case clearly and accurately.
6. Keep Records:
   • Maintain copies of all correspondences, submissions, and notices for future reference.

Conclusion

Grasping the provisions and implications of Section 245D(6B) is not just beneficial, but crucial for taxpayers involved in settlement proceedings. This understanding empowers you to take prompt and appropriate action, including seeking professional advice, to effectively manage the rectification process and ensure compliance with the legal requirements. Moreover, being aware of the potential penalties and prosecution risks can help you prepare adequately and avoid severe consequences, further enhancing your control over your tax affairs.