Full and true disclosure requirement defeated settlement applications where material foreign account details and fund trails were withheld.

An application for settlement under the income-tax settlement scheme is maintainable only on full and true disclosure of income, its source, and the manner in which it was derived. Here, the applicants omitted material details on foreign bank accounts, sources of credits, and the trail of funds, and did not fully cooperate during the proceedings. Those omissions were held to go to the root of maintainability, so the Settlement Commission was justified in rejecting the applications. The writ petitions failed, and the Revenue was left free to proceed in accordance with law.

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Issues: Whether the rejection of the settlement applications for want of full and true disclosure under the settlement scheme was valid.

Analysis: The statutory precondition for invoking the settlement mechanism is a full and true disclosure of income, the manner in which it was derived, and the relevant particulars. The record showed that the applicants failed to disclose material details relating to foreign bank accounts, sources of credits, and the trail of funds, and also did not cooperate fully during the proceedings. The Court accepted the Settlement Commission's finding that the omissions were not minor but went to the root of maintainability, and that the applications could not be entertained when the disclosure was incomplete and not fully corroborated.

Conclusion: The rejection of the settlement applications was upheld and the challenge failed.

Final Conclusion: The writ petitions were dismissed because the applicants did not satisfy the mandatory disclosure requirements for settlement, leaving the Revenue free to proceed in accordance with law.

Ratio Decidendi: An application for settlement under the Income-tax settlement provisions is maintainable only when the applicant makes a full and true disclosure of income and its source, and failure to disclose material facts or the manner of earning the income justifies rejection.

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