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of <h1>Bombay High Court Grants Relief in Tax Settlement Petitions</h1> <h3>Shreem Engineering Industries, United Industries, Shreem Electric Ltd. And Mahan Electrical Industries Pvt. Ltd. Versus Income-Tax Settlement Commission, Additional Bench-1, Mumbai</h3> Shreem Engineering Industries, United Industries, Shreem Electric Ltd. And Mahan Electrical Industries Pvt. Ltd. Versus Income-Tax Settlement Commission, ... Issues:Challenge to order of Income-Tax Settlement Commission under Section 245(D)(4) of the Income-Tax Act, 1961 for rejection of settlement application due to alleged failure to disclose income fully and truly.Analysis:The High Court of BOMBAY HIGH COURT, in the case involving four petitions challenging a common order dated 30th August, 2017 by the Income-Tax Settlement Commission, addressed the issue of rejection of settlement applications for Assessment years 2008-09 to 2014-15. The court noted that the rejection was based on the ground of failure to make a full and true disclosure of income by the petitioners. The court clarified that it intervenes with the orders of the Settlement Commission only if they are contrary to law, perverse, or flawed in the decision-making process. In this instance, the court found the rejection to be contrary to the law established by the court itself, indicating that the failure to disclose income was related to specific financial transactions like Retention money, Purchase of steel, Sub-contracting, and Sales Commissions.Regarding the disclosure of primary facts, the court observed that the petitioners had made a full and complete disclosure of primary facts on all the mentioned heads. The court highlighted that the mere non-acceptance of certain claims before the Commission does not automatically imply a failure to disclose income fully and truly. Citing a previous judgment, the court emphasized that it is essential for the Revenue to prove non-disclosure of primary facts, not just non-acceptance of claims, to establish a failure to disclose income. Additionally, the court mentioned that the petitioners' claim related to retention money was based on a decision of the court in a previous case.Consequently, the court determined that the issues raised required further consideration and granted interim relief in all petitions as per the prayer clause. The court expedited the hearing and provided liberty to apply for further relief. The judgment highlighted the importance of proving non-disclosure of primary facts and emphasized the need for a thorough examination of the grounds for rejection of settlement applications under the Income-Tax Act.
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