Full and true disclosure in settlement applications is mandatory; rejection stands when undisclosed income is not credibly explained.

An application for settlement may be rejected where the applicant fails to make a full and true disclosure of income and the manner of its derivation, including a credible basis for apportioning undisclosed income. The Court upheld rejection because the applicant could not satisfactorily explain the discrepancy between unaccounted sales and the income computed by the Department, and failed to show a convincing basis for splitting sales, expenditure, and income between himself and the company. The finding that he had not approached the settlement forum with clean hands was therefore sustained.

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Issues: Whether the rejection of the application for settlement on the ground that the applicant failed to make a full and true disclosure of income and the manner of its derivation warranted interference.

Analysis: The application under the settlement scheme required disclosure of full and true particulars of income and the manner in which it was derived and apportioned. The record showed a discrepancy between the unaccounted sales and income computed by the Department and the figures put forward by the applicant, and the applicant was unable to furnish a convincing basis for apportioning unaccounted sales, expenditure, and income between himself and the company. In the absence of a satisfactory explanation, the finding that the applicant had not approached the settlement forum with clean hands and had not made the required disclosure was upheld.

Conclusion: The rejection of the settlement application was justified and no interference was called for.

Ratio Decidendi: An application for settlement can be rejected where the applicant fails to make a full and true disclosure of income and its source or manner of derivation, including a credible basis for apportionment of undisclosed income.

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