R.B. SHREERAM DURGA PRASAD & FATEHCHANDNURSING DAS vs SETTLEMENT COMMISSION (IT & WT) & ANR.

The Supreme Court held that under Section 245C of the Income Tax Act, 1961, an assessee is entitled to a hearing before the Settlement Commission rejects an application for settlement. The Court emphasized that the principles of natural justice must be adhered to, particularly the right to be heard as mandated by Section 245D(1). The Court overturned the Settlement Commission's order rejecting the application for settlement for the years 1948-49 to 1959-60 due to the violation of these principles, thereby allowing the appeal.