TaxTMI 
TaxTMI 
2010 (5) TMI 659
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....t (for short "the Income-tax Act"), vide order dated June 14, 2000, as per annexure B. Consequently, the first respondent issued show-cause notice to the first respondent as to why they should not be prosecuted under sections 276C(1), 277 read with section 276(b) of the Income-tax Act as per annexure C. Further notice under section 148 of the Income-tax Act was issued to reopen the completed assessments of previous years. At that stage, the first respondent filed an application under section 245C(1) of the Income-tax Act before the second respondent, Settlement Commission for the assessment years 1995 to 2000 in the prescribed Form 34B dated July 10, 2000, as per annexure Y. Before the Settlement Commission, the first petitioner entered appearance and objected for admitting the application filed by the first respondent on the ground that it has no jurisdiction to entertain the application filed by the first respondent. The second respondent, after hearing both the parties, passed an order on December 11, 2000, admitting the application of the first respondent as per annexure E. The petitioners questioned the order of the Settlement Commission at annexure E before this court in W. P....
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....sp; (b) CIT v. B. N. Bhattachargee [1979] 118 ITR 461 (SC) ; (c) Chief Conservator of Forests, Government of A. P. v. Collector [2003] 3 SCC 472 ; (d) CIT v. ITSC [2009] 310 ITR 10 (Mad) ; and (e) Raja Ram Industries v. Settlement Commission [1995] 81 Taxman 505 (ITSC). 6. Per contra Sri Ashok A. Kulkarni, learned counsel for the first respondent contends that the Government of India constituted a committee (for short "COD") to resolve the disputes of every nature that is, between one wing of the Government and another wing of the Government including intra-departmental disputes. Only after an application has been made to COD and its approval is obtained, wherever necessary, legal proceedings can be initiated by one authority against another authority of the Central Government and not otherwise. In the instant case, the petitioners on one hand and the second respondent on the other hand are the wings of the Central Government and in the absence of clearance obtained from the COD the present writ petition is not maintainable. If the writ petition is not maintainable against the....
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....covery of the concealed income ? (4) Whether the impugned order passed by the Settlement Commission is in accordance with law ? On point No. I 9. The first petitioner and the first respondent are the parties before the second respondent, Settlement Commission. The impugned order at annexure G is passed by the second respondent. The prayer of the petitioners in this writ petition is to quash the impugned order at annexure G. The final outcome in this writ petition will not have any bearing on the second respondent. There is no prayer against the second respondent. The second respondent is only a formal party. The lis is not between petitioners and the second respondent. On the other hand, the lis is between the petitioners and the first respondent. The clearance from the COD is necessary only if there is a lis between two wings of the Central Government. Though the petitioners and the second respondent are the wings of the Central Government there is no lis between them. As such clearance from the COD is not necessary to maintain the present writ petition. The decisions relied on by the first respondent are not applicable to the facts....
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....basis of the recommendations made by the Wanchoo Committee for establishing a Settlement Commission. The relevant portion of the recommendations reveals the legislative background and also the salient aspects of the provisions providing for establishment of the Settlement Commission and they read as under : "This, however, does not mean that the door for compromise with an errant taxpayer should, for ever, remain closed. In the administration of fiscal laws whose primary objective is to raise revenue, there has to be room for compromise and settlement. A rigid attitude would not only inhibit a one-time tax-evader or an unintending defaulter from making a clean breast of his affairs, but would also unnecessarily strain the investigational resources of the Department in cases of doubtful benefit to revenue, while needlessly proliferating litigation and holding up collections. We would, therefore, suggest that there should be a provision in the law for a settlement with the taxpayer at any stage of the proceedings." 13. The provisions under Chapter XIX-A of the Income-tax Act came to be amended in the years 1979, 1991 and 2007. It is relevant t....
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....5C is meant for those assessees who seek to disclose income not disclosed before the officer including the manner in which such income has been derived. If the Department already knows and has gathered particulars of such income and the manner in which it has been derived, then there is no disclosure by the assessee". 15. The Supreme Court in Express Newspapers Ltd.'s case [1994] 206 ITR 443 (SC) specifically observed that it is not considering the effect of the legislative change brought in 1991 to sections 245C and 245D of the Income-tax Act. In the said decision, the Supreme Court construed the provisions of section 245C of the Income-tax Act in conjunction with section 245D(1) of the Income-tax Act as those sections stood prior to its amendment by the Finance (No. 2) Act of 1991. Admittedly, in the instant case, the first respondent filed an application before the Settlement Com- mission under section 245C(1) of the Income-tax Act on July 10, 2000, for the assessment years 1994-95 to 1999-2000. On the face of it, the claim of the first respondent before the Settlement Commission was subsequent to the amendment in the year 1991. The amendment of the year 1991 to section 245C(1....
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....me to tax liability, impose penalty and initiate prosecution proceedings. This power is also available with the Settlement Commission. If the Settlement Commission holds that there is deliberate concealment of income by the assessee then it has got the power to bring the concealed income, to impose interest, penalty and to order for prosecution. Therefore, it cannot be contended that in the event of detection by the Assessing Officer an application under section 245C(1) of the Income-tax Act is not maintainable. If such an interpretation is given then the very object of establishing a machinery called Settlement Commission will be defeated. Accordingly, I answer point No. 3 in the negative. On point No. IV 19. The contention of the petitioner that the first respondent had only disclosed negative income for certain assessment years is unacceptable to me. The Settlement Commission in the impugned order directed the first respondent to pay tax on undisclosed income with interest. Except this contention no other contention is urged with regard to the merits of the impugned order. 20. On the question of granting immunity from penalty and prosecution, the reasonin....