Amended and updated notes on section 245K of Income Tax Act 1961 as amended by the Finance Act 2022 and Income-tax Rules, 1962. Detail discussion on provisions and rules related to Bar on subsequent application for settlement.
Chapter XIXA (Sections 245A to 245L) of the Income Tax Act 1961 deals with the provisions related to settlement of cases. Section 245K of IT Act 1961 provides for Bar on subsequent application for settlement.
Recently, we have discussed in detail section 245J (Recovery of sums due under order of settlement) of IT Act 1961. Today, we learn the provisions of section 245K of Income-tax Act 1961. The amended provision of section 245K is effective for financial year 2022-23 relevant to the assessment year 2023-24.
In this article, you will learn detail of the provisions of section 245K of the Income Tax Act, 1961 Bare Act read with the Income-tax Rules, 1962 as provided by Ministry of Law and Justice, Government of India.
Section-245K: Bar on subsequent application for settlement
Section 245K(1) of Income Tax Act
Where—
- (i) an order of settlement passed under sub-section (4) of section 245D provides for the imposition of a penalty on the person who made the application under section 245C for settlement, on the ground of concealment of particulars of his income; or
- (ii) after the passing of an order of settlement under the said sub-section (4) in relation to a case, such person is convicted of any offence under Chapter XXII in relation to that case; or
- (iii) the case of such person was sent back to the Assessing Officer by the Settlement Commission on or before the 1st day of June, 2002,
then, he or any person related to such person (herein referred to as related person) shall not be entitled to apply for settlement under section 245C in relation to any other matter.
Section 245K(2) of Income Tax Act
Where a person has made an application under section 245C on or after the 1st day of June, 2007 and if such application has been allowed to be proceeded with under sub-section (1) of section 245D, such person or any related person shall not be subsequently entitled to make an application under section 245C.
Explanation: For the purposes of this section, “related person” with respect to a person means,—
(i) where such person is an individual, any company in which such person holds more than fifty per cent of the shares or voting rights at any time, or any firm or association of persons or body of individuals in which such person is entitled to more than fifty per cent of the profits at any time, or any Hindu undivided family in which such person is a karta;
(ii) where such person is a company, any individual who held more than fifty per cent of the shares or voting rights in such company at any time before the date of application before the Settlement Commission by such person;
(iii) where such person is a firm or association of persons or body of individuals, any individual who was entitled to more than fifty per cent of the profits in such firm, association of persons or body of individuals, at any time before the date of application before the Settlement Commission by such person;
(iv) where such person is a Hindu undivided family, the karta of that Hindu undivided family.