Court restores Income Tax Settlement Commission order for fresh disposal, emphasizing need for addressing objections.

The court set aside the order of the Income Tax Settlement Commission and restored the application for assessment years 2011-12 to 2013-14 for fresh disposal. The court found the original order to be non-speaking as it failed to address objections raised by the Revenue, emphasizing the need for the Settlement Commission to consider objections with reasons. The petitioner's concerns regarding lack of pending proceedings and income disclosure discrepancies were acknowledged, leading to the decision to reconsider the application under Section 245D(2C) of the Income Tax Act.

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Issues:
Challenge to order of Income Tax Settlement Commission under Section 245D (2C) of the Income Tax Act, 1961.

Analysis:
1. The petition challenged the order dated 19/05/2014 by the Income Tax Settlement Commission (Settlement Commission) under Section 245D (2C) of the Income Tax Act, 1961. The order allowed the respondent's settlement application for assessment years 2011-12 to 2013-14 to proceed further.

2. The respondent filed a settlement application for assessment years 2011-12 to 2013-14 under Section 245C(1) of the Act. The Settlement Commission admitted the application, and the Revenue later filed a report objecting to the application's validity. The objections included jurisdictional issues and lack of full disclosure by the respondent.

3. The petitioner contended that the impugned order was non-speaking as it did not address the objections raised by the Revenue. The order allowed the application to proceed without discussing the sustainability of the objections.

4. The petitioner raised objections regarding the lack of pending proceedings, discrepancies in income disclosure, and failure to make a full and true disclosure. The impugned order, however, found that all conditions for the application's validity were met and allowed it to proceed further.

5. The Court noted that the Settlement Commission must consider objections raised by the Revenue with reasons. Without such consideration, the process under Section 245D(2C) would be rendered redundant, displaying a lack of application of mind.

6. The respondent's counsel agreed to set aside the impugned order and have the issue reconsidered by the Settlement Commission under Section 245D(2C) of the Act. It was clarified that the Settlement Commission had exclusive jurisdiction over the matter until final disposal.

7. The Revenue's counsel acknowledged the exclusive jurisdiction of the Settlement Commission and agreed not to take further penalty proceedings until the application was either rejected or finally disposed of by the Commission.

8. Consequently, the Court set aside the impugned order and restored the application before the Settlement Commission for fresh disposal under Section 245D(2C) in line with principles of natural justice. The petition was allowed, with no costs imposed.

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