Case Laws & Commentary · Income-tax Act, 1961 (as amended by the Finance Act, 2026) · bharattax.co Treatise
Provision: Definition clause for Chapter XIX-A. Defines “Bench”, “case”, “Income-tax authority”, “Interim Board”, “Member”, “Settlement Commission” and “Vice-Chairman”, and contains the Explanation deeming the date of commencement and conclusion of assessment, reassessment, recomputation and fresh-assessment proceedings.
Heading: Definitions.
Finance Act, 2026: Not amended. No clause of section 245A is touched by the Finance Act, 2026.
Operational status: Live as a definition clause, but read with section 245C(5) the substantive machinery is closed for applications made on or after 1 February 2021; the defined term “Interim Board” (clause (da), inserted by the Finance Act, 2021) carries the residual scheme.
Authorities digested: 5 (candour rule — the definitions are rarely litigated in isolation; the contested expression is “case”, i.e. the pendency of an assessment proceeding, and the governing authorities are noted under that head).
A. SECTION COMMENTARY
1. Function of the clause
Section 245A is the gateway to Chapter XIX-A. Every operative section in the Chapter — the right to apply (section 245C), the procedure (section 245D), the powers of the Commission (section 245F) and the finality of the order (section 245-I) — turns on the defined expression “case”. The settlement machinery can be invoked only while a “case”, that is, “any proceeding for assessment… which may be pending before an Assessing Officer on the date on which an application under sub-section (1) of section 245C is made”, is alive. The definition therefore fixes the temporal window of the jurisdiction: there must be a proceeding, it must be one for assessment, and it must be pending on the date of the application.
2. “Pending” — the contested edge
The litigation under this Chapter has clustered around the word “pending”. An assessment proceeding commences when the return is filed or a notice under section 142(1)/143(2) is issued, and it ceases to be pending when the assessment order is passed and served. The Explanation now codifies, for reassessment under section 147, the deemed dates of commencement (date of issue of the section 148 notice) and conclusion (date of the order), removing much of the earlier debate over when a reassessment is “pending”. Read with the proviso to section 245C(1), the practical effect is that an application can be filed only after the proceeding has commenced and before it has been concluded.
3. “Interim Board” — the post-2021 graft
Clause (da), inserted by the Finance Act, 2021 with effect from 1 February 2021, introduces the “Interim Board for Settlement constituted under section 245AA”. After the Commission was made inoperative, the defined expressions “Settlement Commission” and “Bench” survive only for the disposal of the residue: pending applications are routed to the Interim Board, and the powers of the erstwhile Commission are exercised by it (see sections 245AA, 245D and 245M). The definitions thus continue to do work, but for a winding-up function rather than a live remedy.
4. Other defined terms
“Bench”, “Member”, “Vice-Chairman” and “Settlement Commission” are structural definitions read with sections 245B to 245BD. “Income-tax authority” is defined to mean an authority specified in section 116, and is material to section 245F (under which the Commission, once seized, exercises the exclusive jurisdiction of an income-tax authority) and to section 245G (inspection of reports).
5. Candour note
A definitions section is not, in itself, a fertile ground for litigation; courts construe the defined terms when applying the operative sections, not in the abstract. The authorities below are therefore the leading decisions in which the meaning and reach of “case”, and the object of the Chapter that informs the definition, were expounded. They are properly authorities on section 245A read with section 245C.
B. STATUTORY POSITION (verbatim text)
The text of the section, as it stands in the Act (FA-2025 base), is set out below.
245A. In this Chapter, unless the context otherwise requires,— (a) "Bench" means a Bench of the Settlement Commission; (b) "case" means any proceeding for assessment under this Act, of any person in respect of any assessment year or assessment years which may be pending before an Assessing Officer on the date on which an application under sub-section (1) of section 245C is made.
Explanation.—For the purposes of this clause— (i) a proceeding for assessment or reassessment or recomputation under section 147 shall be deemed to have commenced— (a) from the date on which a notice under section 148 is issued for any assessment year; (b) from the date of issuance of the notice referred to in sub-clause (a), for any other assessment year or assessment years for which a notice under section 148 has not been issued, but such notice could have been issued on such date, if the return of income for the other assessment year or assessment years has been furnished under section 139 or in response to a notice under section 142; (ii) [***] (iii) a proceeding for making fresh assessment in pursuance of an order under section 254 or section 263 or section 264, setting aside or cancelling an assessment shall be deemed to have commenced from the date on which such order, setting aside or cancelling an assessment was passed; (iiia) a proceeding for assessment or reassessment for any of the assessment years, referred to in clause (b) of sub-section (1) of section 153A in case of a person referred to in section 153A or section 153C, shall be deemed to have commenced on the date of issue of notice initiating such proceeding and concluded on the date on which the assessment is made; (iv) a proceeding for assessment for any assessment year, other than the proceedings of assessment or reassessment referred to in clause (i) or clause (iii) or clause (iiia), shall be deemed to have commenced from the date on which the return of income for that assessment year is furnished under section 139 or in response to a notice served under section 142 and concluded on the date on which the assessment is made; or on the expiry of the time specified for making assessment under sub-section (1) of section 153, in case where no assessment is made; (c) "Chairman" means the Chairman of the Settlement Commission; (d) "income-tax authority" means an income-tax authority specified in section 116; (da) "Interim Board" means the Interim Board for Settlement constituted under section 245AA; (e) "Member" means a Member of the Settlement Commission, and includes the Chairman and a Vice-Chairman; (ea) "Member of the Interim Board" means a Member of the Interim Board; (eb) "pending application" means an application which was filed under section 245C and which fulfils the following conditions, namely: — (i) it was not declared invalid under sub-section (2C) of section 245D; and (ii) no order under sub-section (4) of section 245D was issued on or before the 31st day of January, 2021 with respect to such application; (f) "Settlement Commission" means the Income-tax Settlement Commission constituted under section 245B; (g) "Vice-Chairman" means a Vice-Chairman of the Settlement Commission and includes a Member who is senior amongst the Members of a Bench.
Clause (ii) of the Explanation to clause (b) carries the omission marker [***]; words omitted by amendment are not reproduced.
C. AUTHORITIES
Section 245A is construed through the operative provisions. The decisions below settle the object of the Chapter and the meaning of a “case” that is “pending” — the jurisdictional fact on which the whole Chapter rests.
Cluster 1 — Object of the Chapter and the meaning of a “case”
These decisions explain what the settlement machinery is for and when a “case” exists to be settled.
Citation: (1979) 118 ITR 461 (SC); decided 4 May 1979.
Facts: The assessee sought to invoke the then newly-introduced settlement machinery; a question arose as to the scope and object of Chapter XIX-A and whether pending appeals stood in the way of the Commission's jurisdiction.
Held: The Supreme Court explained the object of the Chapter — to enable a tax-evader to make a clean breast of his affairs and buy quietus by settlement — and held that an “appeal” for these purposes means not merely the filing of a memorandum of appeal but its effective pursuit; the Commissioner's objection to a settlement was a “potent interdict” on the Commission's jurisdiction in the scheme as it then stood.
Relevance: The foundational Supreme Court statement of the purpose of Chapter XIX-A; it informs the construction of “case” in section 245A and the threshold of section 245C. Frequently relied on for the proposition that settlement is a privilege hedged with conditions, not a right at large.
CIT v. Express Newspapers Ltd., (1994) 206 ITR 443 (SC)
Citation: (1994) 206 ITR 443 (SC).
Facts: Concerned the entertainability of a settlement application and the scope of the “case” that a settlement could embrace, where the matter sought to be settled did not fall within the assessment proceeding contemplated by the Chapter.
Held: The Court delineated the boundary of a “case” capable of settlement under the Chapter, holding that the settlement jurisdiction is confined to the assessment proceeding pending before the Assessing Officer and cannot be enlarged to matters outside that proceeding.
Relevance: Authority on the outer limit of the defined term “case” in section 245A(b); a settlement cannot travel beyond the pending assessment proceeding. Applied by High Courts (e.g. Shaw Wallace & Co. Ltd. v. Settlement Commission, (2003) 263 ITR 285 (Cal)) to refuse settlement of matters not forming part of the assessment.
Cluster 2 — “Interim Board” and the closure of the live remedy
Clause (da) and the post-2021 architecture; the leading decision reading down the cut-off so that genuinely pending “cases” are not extinguished.
Jain Metal Rolling Mills v. Union of India, (2023) 156 taxmann.com 513 / (2024) 461 ITR 423 (Mad)
Citation: (2023) 156 taxmann.com 513 / (2024) 461 ITR 423 (Mad); Revenue's SLP dismissed, Union of India v. Velammal Chennai Educational Trust, (2024) 467 ITR 169 (SC).
Facts: After the Finance Act, 2021 made the Commission inoperative from 1 February 2021, CBDT (Press Release dated 7 September 2021 / Order under section 119) permitted applications to be filed before the Interim Board up to 30 September 2021 but only where the case was pending and eligible as on 31 January 2021. Assessees whose cases arose between 1 February 2021 and 31 March 2021 challenged the retrospective cut-off.
Held: The Madras High Court read down section 245C(5) by substituting 31 March 2021 for the retrospective date of 1 February 2021, holding that the object of the retrospective amendment was to send pending applications to the Interim Board, not to extinguish genuinely pending cases that arose up to 31 March 2021; the eligibility condition introduced by the circular could not defeat the statute.
Relevance: The leading decision on the transitional regime that gives content to the defined term “Interim Board” (clause (da)) and to section 245C(5)/section 245M. Affirmed in effect by the Supreme Court's dismissal of the Revenue's SLP.
Cluster 3 — Candour: the definition as construed in the finality and disclosure cases
Where the meaning of “case” and the structure of the Chapter were elaborated incidentally to the leading section 245C/245D/245-I decisions.
Ajmera Housing Corporation v. CIT, (2010) 326 ITR 642 (SC)
Held / relevance: In holding that full and true disclosure is the foundation of a maintainable settlement “case”, the Court explained the integrated scheme of the Chapter of which section 245A is the definitional part; digested in full under section 245C.
Jyotendrasinhji v. S.I. Tripathi, (1993) 201 ITR 611 (SC)
Citation: (1993) 201 ITR 611 (SC).
Held / relevance: Expounded the nature of the Commission's function and the conclusiveness of its order under section 245-I, which presupposes a “case” within section 245A; digested in full under section 245-I.
Compiled for the bharattax.co Treatise on the Income-tax Act, 1961 (as amended by the Finance Act, 2026). Statutory text is reproduced from the Income-tax Act, 1961 (text as printed in the local Act, base text amended up to the Finance Act, 2025), with the publisher's footnote apparatus and amendment-marker brackets removed; three asterisks (***) denote words or a provision omitted by amendment and retained only to mark the omission. The Income-tax Settlement Commission ceased to operate for applications made on or after 1 February 2021 (Finance Act, 2021); pending applications stand transferred to the Interim Board for Settlement (section 245AA). Finance Act, 2026 makes no change to any section of Chapter XIX-A. Citations are stated as reported; orders of the Tribunal and High Courts are flagged as such. Where a section has not been judicially construed, that is stated candidly and the nearest governing authority is given. This material is for professional reference and is not legal advice.
CHAPTER XIX-A — SETTLEMENT OF CASES
Section 245A — Definitions
Case Laws & Commentary · Income-tax Act, 1961 (as amended by the Finance Act, 2026) · bharattax.co Treatise
Provision: Definition clause for Chapter XIX-A. Defines “Bench”, “case”, “Income-tax authority”, “Interim Board”, “Member”, “Settlement Commission” and “Vice-Chairman”, and contains the Explanation deeming the date of commencement and conclusion of assessment, reassessment, recomputation and fresh-assessment proceedings.
Heading: Definitions.
Finance Act, 2026: Not amended. No clause of section 245A is touched by the Finance Act, 2026.
Operational status: Live as a definition clause, but read with section 245C(5) the substantive machinery is closed for applications made on or after 1 February 2021; the defined term “Interim Board” (clause (da), inserted by the Finance Act, 2021) carries the residual scheme.
Authorities digested: 5 (candour rule — the definitions are rarely litigated in isolation; the contested expression is “case”, i.e. the pendency of an assessment proceeding, and the governing authorities are noted under that head).
A. SECTION COMMENTARY
1. Function of the clause
Section 245A is the gateway to Chapter XIX-A. Every operative section in the Chapter — the right to apply (section 245C), the procedure (section 245D), the powers of the Commission (section 245F) and the finality of the order (section 245-I) — turns on the defined expression “case”. The settlement machinery can be invoked only while a “case”, that is, “any proceeding for assessment… which may be pending before an Assessing Officer on the date on which an application under sub-section (1) of section 245C is made”, is alive. The definition therefore fixes the temporal window of the jurisdiction: there must be a proceeding, it must be one for assessment, and it must be pending on the date of the application.
2. “Pending” — the contested edge
The litigation under this Chapter has clustered around the word “pending”. An assessment proceeding commences when the return is filed or a notice under section 142(1)/143(2) is issued, and it ceases to be pending when the assessment order is passed and served. The Explanation now codifies, for reassessment under section 147, the deemed dates of commencement (date of issue of the section 148 notice) and conclusion (date of the order), removing much of the earlier debate over when a reassessment is “pending”. Read with the proviso to section 245C(1), the practical effect is that an application can be filed only after the proceeding has commenced and before it has been concluded.
3. “Interim Board” — the post-2021 graft
Clause (da), inserted by the Finance Act, 2021 with effect from 1 February 2021, introduces the “Interim Board for Settlement constituted under section 245AA”. After the Commission was made inoperative, the defined expressions “Settlement Commission” and “Bench” survive only for the disposal of the residue: pending applications are routed to the Interim Board, and the powers of the erstwhile Commission are exercised by it (see sections 245AA, 245D and 245M). The definitions thus continue to do work, but for a winding-up function rather than a live remedy.
4. Other defined terms
“Bench”, “Member”, “Vice-Chairman” and “Settlement Commission” are structural definitions read with sections 245B to 245BD. “Income-tax authority” is defined to mean an authority specified in section 116, and is material to section 245F (under which the Commission, once seized, exercises the exclusive jurisdiction of an income-tax authority) and to section 245G (inspection of reports).
5. Candour note
A definitions section is not, in itself, a fertile ground for litigation; courts construe the defined terms when applying the operative sections, not in the abstract. The authorities below are therefore the leading decisions in which the meaning and reach of “case”, and the object of the Chapter that informs the definition, were expounded. They are properly authorities on section 245A read with section 245C.
B. STATUTORY POSITION (verbatim text)
The text of the section, as it stands in the Act (FA-2025 base), is set out below.
245A. In this Chapter, unless the context otherwise requires,— (a) "Bench" means a Bench of the Settlement Commission; (b) "case" means any proceeding for assessment under this Act, of any person in respect of any assessment year or assessment years which may be pending before an Assessing Officer on the date on which an application under sub-section (1) of section 245C is made.
Explanation.—For the purposes of this clause— (i) a proceeding for assessment or reassessment or recomputation under section 147 shall be deemed to have commenced— (a) from the date on which a notice under section 148 is issued for any assessment year; (b) from the date of issuance of the notice referred to in sub-clause (a), for any other assessment year or assessment years for which a notice under section 148 has not been issued, but such notice could have been issued on such date, if the return of income for the other assessment year or assessment years has been furnished under section 139 or in response to a notice under section 142; (ii) [***] (iii) a proceeding for making fresh assessment in pursuance of an order under section 254 or section 263 or section 264, setting aside or cancelling an assessment shall be deemed to have commenced from the date on which such order, setting aside or cancelling an assessment was passed; (iiia) a proceeding for assessment or reassessment for any of the assessment years, referred to in clause (b) of sub-section (1) of section 153A in case of a person referred to in section 153A or section 153C, shall be deemed to have commenced on the date of issue of notice initiating such proceeding and concluded on the date on which the assessment is made; (iv) a proceeding for assessment for any assessment year, other than the proceedings of assessment or reassessment referred to in clause (i) or clause (iii) or clause (iiia), shall be deemed to have commenced from the date on which the return of income for that assessment year is furnished under section 139 or in response to a notice served under section 142 and concluded on the date on which the assessment is made; or on the expiry of the time specified for making assessment under sub-section (1) of section 153, in case where no assessment is made; (c) "Chairman" means the Chairman of the Settlement Commission; (d) "income-tax authority" means an income-tax authority specified in section 116; (da) "Interim Board" means the Interim Board for Settlement constituted under section 245AA; (e) "Member" means a Member of the Settlement Commission, and includes the Chairman and a Vice-Chairman; (ea) "Member of the Interim Board" means a Member of the Interim Board; (eb) "pending application" means an application which was filed under section 245C and which fulfils the following conditions, namely: — (i) it was not declared invalid under sub-section (2C) of section 245D; and (ii) no order under sub-section (4) of section 245D was issued on or before the 31st day of January, 2021 with respect to such application; (f) "Settlement Commission" means the Income-tax Settlement Commission constituted under section 245B; (g) "Vice-Chairman" means a Vice-Chairman of the Settlement Commission and includes a Member who is senior amongst the Members of a Bench.
Clause (ii) of the Explanation to clause (b) carries the omission marker [***]; words omitted by amendment are not reproduced.
C. AUTHORITIES
Section 245A is construed through the operative provisions. The decisions below settle the object of the Chapter and the meaning of a “case” that is “pending” — the jurisdictional fact on which the whole Chapter rests.
Cluster 1 — Object of the Chapter and the meaning of a “case”
These decisions explain what the settlement machinery is for and when a “case” exists to be settled.
CIT v. B.N. Bhattacharjee & Anr., (1979) 118 ITR 461 (SC)
Citation: (1979) 118 ITR 461 (SC); decided 4 May 1979.
Facts: The assessee sought to invoke the then newly-introduced settlement machinery; a question arose as to the scope and object of Chapter XIX-A and whether pending appeals stood in the way of the Commission's jurisdiction.
Held: The Supreme Court explained the object of the Chapter — to enable a tax-evader to make a clean breast of his affairs and buy quietus by settlement — and held that an “appeal” for these purposes means not merely the filing of a memorandum of appeal but its effective pursuit; the Commissioner's objection to a settlement was a “potent interdict” on the Commission's jurisdiction in the scheme as it then stood.
Relevance: The foundational Supreme Court statement of the purpose of Chapter XIX-A; it informs the construction of “case” in section 245A and the threshold of section 245C. Frequently relied on for the proposition that settlement is a privilege hedged with conditions, not a right at large.
CIT v. Express Newspapers Ltd., (1994) 206 ITR 443 (SC)
Citation: (1994) 206 ITR 443 (SC).
Facts: Concerned the entertainability of a settlement application and the scope of the “case” that a settlement could embrace, where the matter sought to be settled did not fall within the assessment proceeding contemplated by the Chapter.
Held: The Court delineated the boundary of a “case” capable of settlement under the Chapter, holding that the settlement jurisdiction is confined to the assessment proceeding pending before the Assessing Officer and cannot be enlarged to matters outside that proceeding.
Relevance: Authority on the outer limit of the defined term “case” in section 245A(b); a settlement cannot travel beyond the pending assessment proceeding. Applied by High Courts (e.g. Shaw Wallace & Co. Ltd. v. Settlement Commission, (2003) 263 ITR 285 (Cal)) to refuse settlement of matters not forming part of the assessment.
Cluster 2 — “Interim Board” and the closure of the live remedy
Clause (da) and the post-2021 architecture; the leading decision reading down the cut-off so that genuinely pending “cases” are not extinguished.
Jain Metal Rolling Mills v. Union of India, (2023) 156 taxmann.com 513 / (2024) 461 ITR 423 (Mad)
Citation: (2023) 156 taxmann.com 513 / (2024) 461 ITR 423 (Mad); Revenue's SLP dismissed, Union of India v. Velammal Chennai Educational Trust, (2024) 467 ITR 169 (SC).
Facts: After the Finance Act, 2021 made the Commission inoperative from 1 February 2021, CBDT (Press Release dated 7 September 2021 / Order under section 119) permitted applications to be filed before the Interim Board up to 30 September 2021 but only where the case was pending and eligible as on 31 January 2021. Assessees whose cases arose between 1 February 2021 and 31 March 2021 challenged the retrospective cut-off.
Held: The Madras High Court read down section 245C(5) by substituting 31 March 2021 for the retrospective date of 1 February 2021, holding that the object of the retrospective amendment was to send pending applications to the Interim Board, not to extinguish genuinely pending cases that arose up to 31 March 2021; the eligibility condition introduced by the circular could not defeat the statute.
Relevance: The leading decision on the transitional regime that gives content to the defined term “Interim Board” (clause (da)) and to section 245C(5)/section 245M. Affirmed in effect by the Supreme Court's dismissal of the Revenue's SLP.
Cluster 3 — Candour: the definition as construed in the finality and disclosure cases
Where the meaning of “case” and the structure of the Chapter were elaborated incidentally to the leading section 245C/245D/245-I decisions.
Ajmera Housing Corporation v. CIT, (2010) 326 ITR 642 (SC)
Citation: (2010) 326 ITR 642 / 193 Taxman 193 (SC).
Held / relevance: In holding that full and true disclosure is the foundation of a maintainable settlement “case”, the Court explained the integrated scheme of the Chapter of which section 245A is the definitional part; digested in full under section 245C.
Jyotendrasinhji v. S.I. Tripathi, (1993) 201 ITR 611 (SC)
Citation: (1993) 201 ITR 611 (SC).
Held / relevance: Expounded the nature of the Commission's function and the conclusiveness of its order under section 245-I, which presupposes a “case” within section 245A; digested in full under section 245-I.
Compiled for the bharattax.co Treatise on the Income-tax Act, 1961 (as amended by the Finance Act, 2026). Statutory text is reproduced from the Income-tax Act, 1961 (text as printed in the local Act, base text amended up to the Finance Act, 2025), with the publisher's footnote apparatus and amendment-marker brackets removed; three asterisks (***) denote words or a provision omitted by amendment and retained only to mark the omission. The Income-tax Settlement Commission ceased to operate for applications made on or after 1 February 2021 (Finance Act, 2021); pending applications stand transferred to the Interim Board for Settlement (section 245AA). Finance Act, 2026 makes no change to any section of Chapter XIX-A. Citations are stated as reported; orders of the Tribunal and High Courts are flagged as such. Where a section has not been judicially construed, that is stated candidly and the nearest governing authority is given. This material is for professional reference and is not legal advice.