Full and true disclosure in settlement proceedings can be tested at the final stage despite an earlier clearance to proceed.

Full and true disclosure under the settlement scheme requires the applicant to disclose undisclosed income and the manner of its derivation with sufficient particulars, not merely a broad source or head of income. The Commission may examine whether receipts and expenses have been fully and truthfully disclosed at the final stage, and a prior order permitting the application to proceed does not prevent later rejection under the continuing statutory requirement. The Bombay HC upheld rejection of the settlement application because non-disclosure of relevant particulars could amount to failure of full and true disclosure, and no writ interference was warranted.

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Issues: Whether the Settlement Commission could reject the settlement application at the stage of Section 245D(4) for want of full and true disclosure of undisclosed income, including the particulars of facilitation receipts and expenses, and whether the earlier order under Section 245D(2C) precluded such rejection.

Analysis: The requirement under Section 245C(1) is that the applicant must make a full and true disclosure of income not earlier disclosed and the manner in which it was derived. The disclosure of the manner of earning income is not satisfied by stating only the broad source or head of income; when particulars are sought, the applicant must supply the relevant details. The Commission was therefore entitled to examine whether the disclosure was complete and truthful, and its view that non-disclosure of particulars of receipts and expenses could amount to failure of full and true disclosure was a possible view. The prior decision to allow the application to proceed under Section 245D(2C) did not bar rejection later under Section 245D(4), because the statutory requirement of full and true disclosure continues to apply until final disposal of the settlement application.

Conclusion: The rejection of the settlement application on the ground of failure of full and true disclosure was upheld, and no interference in writ jurisdiction was warranted.

Ratio Decidendi: A settlement application may be rejected at the final stage if the applicant fails to make a full and true disclosure of undisclosed income and the manner of its derivation, and an earlier order allowing the application to proceed does not preclude such rejection.

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