Settlement Commission's Order Upheld on Additional Disclosure

The court upheld the Settlement Commission's order, determining that the additional disclosure of Rs. 12 Crore was not a fresh disclosure but an extension of the initial one. The court found that the Commission followed proper procedures and did not err in accepting the additional disclosure. Consequently, the court dismissed the petitions without costs.

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Issues Involved:
1. Legitimacy of the Settlement Commission's order regarding the assessee's disclosure of income.
2. Whether the additional disclosure made by the assessee during the proceedings was substantial and fresh.
3. Applicability of the Supreme Court's decision in Ajmera Housing Corporation v. Commissioner of Income Tax to this case.
4. Scope of judicial review under Article 226 of the Constitution of India concerning the Settlement Commission's order.

Issue-wise Detailed Analysis:

1. Legitimacy of the Settlement Commission's Order:
The petitioner challenged the Settlement Commission's order dated 25th July 2018, arguing that the respondent did not make a "true and full disclosure" of income. The petitioner claimed that a substantial portion of the income was suppressed. The Settlement Commission had accepted the respondent's additional income disclosure of Rs. 12 Crore during the proceedings under section 245D(4) of the Income Tax Act, 1961, and settled the case based on this disclosure.

2. Substantial and Fresh Additional Disclosure:
The petitioner argued that the initial disclosure of Rs. 22.09 Crore by the respondent was not true and full, as evidenced by the subsequent disclosure of Rs. 12 Crore, which was more than 50% of the original declaration. The petitioner cited the Supreme Court's decision in Ajmera Housing Corporation, which emphasized that an assessee must make a full and true disclosure at the initial stage and cannot revise it later. The respondent countered that the additional disclosure was made in the spirit of settlement and was not a fresh disclosure, but rather an extension of the initial one.

3. Applicability of Ajmera Housing Corporation Decision:
The petitioner relied on the Ajmera Housing Corporation case, where the Supreme Court held that an assessee cannot revise their disclosure before the Settlement Commission. However, the respondent argued that this case was different from Ajmera Housing Corporation. The respondent cited several other judgments, including Jyotendrasinhji v. S.I. Tripathi, where the Supreme Court stated that the High Court's review should focus on the legality of the procedure followed by the Commission, not the validity of the order itself.

4. Scope of Judicial Review Under Article 226:
The court examined whether the Settlement Commission's order was contrary to any provisions of the Income Tax Act and whether it prejudiced the petitioner. The court noted that the Commission had followed the detailed procedure under sections 245C and 245D of the Act, providing proper opportunities for hearing to both parties. The court found that the Commission's acceptance of the additional Rs. 12 Crore disclosure was in the spirit of settlement and did not constitute a fresh disclosure as per the Ajmera Housing Corporation decision.

Judgment:
The court concluded that the Settlement Commission had followed the correct procedure and that the additional disclosure of Rs. 12 Crore was not a fresh disclosure but an extension of the initial one. The court held that the Commission's order did not call for interference and dismissed the petitions, discharging the rule with no order as to costs.

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