TaxTMI 
TaxTMI 
TaxTMI 
2014 (12) TMI 685
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....ome of Rs. 78,210/- for the block period. After considering the cash flow statement furnished by the respondent, the assessment was completed against the respondent, by an assessment order dated 21.3.2002, by working out the tax and interest payable at Rs. 99,84,516/-. A demand notice was also issued to the respondent pursuant to the said assessment. During the pendency of the block assessment proceedings, however, the respondent assessee had filed an application before the Settlement Commission, Chennai. The Settlement Commission proceeded with the application in terms of the Chapter XIX-A of the IT Act and finally passed its order, under Section 245D (4) of the Act. While passing final orders in the matter, the Settlement Commission took into account additional amounts that were offered by the assessee at the instance of the Settlement Commission and added this amount to the total amount that had to be paid by the assessee for the purposes of settlement. The Settlement Commission also took into account the cooperation by the assessee during the proceedings before the Settlement Commission and granted immunity from penalty and prosecution in terms of Section 245H of the IT Act. It....
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....ax - [2010 (326) ITR 642 (SC)]. It is further contended by senior counsel for the petitioner that the Settlement Commission did not enter a finding with regard to the existence of a declaration containing a true and full disclosure of undisclosed income of the assessee, as also the manner in which such income was derived and the additional amount of income tax payable on such income, for the purposes of settlement. It is also pointed out that, as regards the grant of immunity from penalty and prosecution under the IT Act, there was no finding entered into by the Settlement Commission regarding the compliance by the assessee of the requisite preconditions namely, the 'full and true disclosure' of income and the manner of deriving such income and the cooperation by the assessee during the proceedings before the Settlement Commission, for the purposes of grant of immunity from penalty and prosecution. 6. Per contra, the learned senior counsel appearing for the respondent would point out that order of the Settlement Commission had been conferred with a statutory finality under the IT Act and this Court would not normally interfere with the final orders passed by the Settlement....
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....sinhji v. S. I. Tripathi and Others - [1993 (201) ITR 611 (SC)], observed as follows at page 623: ".....Be that as it may, the fact remains that it is open to the Commission to accept an amount of tax by way of settlement and to prescribe the manner in which the said amount shall be paid. It may condone the defaults and lapses on the part of the assessee and may waive interest, penalties or prosecution, where it thinks appropriate. Indeed, it would be difficult to predicate the reasons and considerations which induce the Commission to make a particular order, unless the Commission itself chooses to give reasons for its order. Even if it gives reasons in a given case, the scope of enquiry in the appeal remains the same as indicated above, viz., whether it is contrary to any of the provisions of the Act. In this context, it is relevant to note that the principle of natural justice (audi alteram partem) has been incorporated in section 245D itself. The sole overall limitation upon the Commission, thus, appears to be that it should act in accordance with the provisions of the Act. The scop....
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....rroneous finding. So far as the second issue with respect to interest on Rs. 50 lakhs is concerned, the same being a factual issue should not have been gone into by the High Court exercising the writ jurisdiction and the High Court should not have substituted its own opinion against the opinion of the Settlement Commission when the same was not challenged on merits." Hence, it is well settled that the power of judicial review is not to be exercised to decide the issue on facts or on an interpretation of the documents available before the Court." It would follow therefore, that in the instant case, the enquiry by this Court will only be with regard to whether or not the Settlement Commission exercised a jurisdiction that it did not have or, alternatively, if it did have the jurisdiction, whether it erred in the exercise of that jurisdiction. In the latter event, this Court would also have to bear in mind the nature of the jurisdiction exercised by the Settlement Commission, which is akin to a statutory arbitration. 8. The primary contention of the learned senior counsel for the petitioner is that the very fact, that additional amounts were offered by the respondent assessee befor....
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.... judgment of the Supreme Court are to be found in paragraphs 27, 31, 36 and 39 and are extracted hereunder: "27. It is clear that disclosure of "full and true" particulars of undisclosed income and "the manner" in which such income had been derived are the pre-requisites for a valid application under section 245C(1) of the Act. Additionally, the amount of income-tax payable on such undisclosed income is to be computed and mentioned in the application. It needs little emphasis that section 245C(1) of the Act mandates "full and true" disclosure of the particulars of undisclosed income and "the manner" in which such income was derived and, therefore, unless the Settlement Commission records its satisfaction on this aspect, it will not have the jurisdiction to pass any order on the matter covered by the application." 31. It is plain from the language of sub- section (4) of section 245D of the Act that the jurisdiction of the Settlement Commission to pass such orders as it may think fit is confined to the ....
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....t of the application, deprived the commissioner of his right to object to the maintainability of the assessee's application on the ground that the assessee had not made true and full disclosure of their income in the previous application, the foundational requirement of a valid application under section 245C(1) of the Act. Accordingly, we have no hesitation in rejecting the argument." 13. The issue to be considered here is whether, the observations of the Supreme Court in the aforementioned judgment are to be taken to mean that in every case where an applicant makes an offer of additional amounts, even at the instance or suggestion of the settlement commission, it would follow that the original declaration made by the applicant did not contain a full and true disclosure of his income and thereby rendering it invalid and, consequently, denuding the settlement commission of its jurisdiction to proceed further in the matter? In my view, such an interpretation would render meaningless the scheme of settlement that is envisaged under the IT Act. One cannot discount the possibility of the Settlement....