TaxTMI 
TaxTMI 
TaxTMI 
2012 (12) TMI 1020
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....for assessment year 2008-2009 to 2010-2011 and under section 143(2) of the Act for the assessment year 2011-2012 were pending. On 28.5.2012, the petitioner filed an application under section 245C of the Act before Settlement Commission for the assessment years 2008-2009 to 2011-2012. The petitioner disclosed additional income of Rs. 49,24,14,630/- for different years in the following manner : Assessment Year Additional Income of Rs. 49,24,14,630/- Disclosed in Return/Application filed Return u/s 139 (1) Return u/s 139(5) Revised After Search within the permitted time Return u/s 153A Before Settlement Commission Total Income Disclosed due to Search 2008-09 Nil Nil Nil 6,22,92,000 6,22,92,000 2009-10 Nil 12,32,07,000 31,32,500 17,45,000 12,80,84,500 2010-11 Nil Nil 18,30,000 1,00,000 19,30,000 2011-12 30,00,00,000 Nil Nil 1,08,130 30,01,08,130 Total 30,00,00,000 12,32,07,000 49,32,500 6,42,45,130 49,24,14,630 2.2 We may recall that in the disclosures under section 132(4) of the Act the petitioner had disclosed a total income of Rs. 48 crores. The petitioner had therefore, paid additional tax and interest on the additional disclosures made....
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....dditional material. 4.3 Counsel also took us through the impugned decision of the Commission to contend that the Commission's findings were dehors the material on record and the petitioners having made true and full disclosures, the application for settlement could not have been dismissed. 4.4 Counsel relied on the decision of Division Bench of this Court in case of CIT v. Mahendra C. Shah [2008] 299 ITR 305/172 Taxman 58, wherein in the context of immunity from penalty under section 271(1) (c) of the Act, in terms of explanation (5) thereof, which requires besides other conditions that the assessee should have in his statement under section 132(4) of the Act disclosed the manner in which income was earned, this Court held and observed that even if such statement does not specify the manner in which the income is derived, if the income is declared and the tax thereon is paid, there would be substantial compliance not warranting any further denial of the benefit of immunity. 5. On the other hand, learned senior counsel Shri Manish Bhatt for the Revenue opposed the petitions contending that the scope of judicial review against a decision of Settlement Commission is extremely n....
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....been derived, the additional amount of income-tax payable on such income and such other particulars as may be prescribed, to the Settlement Commission to have his case settled. It is further provided that application shall be disposed of in the manner hereinafter provided. ♦ Section 245D of the Act pertains to procedure on receipt of an application under section 245C. Relevant portion of section 245D reads as under : "245D. (1) On receipt of an application under section 245C, the Settlement Commission shall, within seven days from the date of receipt of the application, issue a notice to the applicant requiring him to explain as to why the application made by him be allowed to be proceeded with and on hearing the applicant, the Settlement Commission shall, within a period of fourteen days from the date of the application, by an order in writing, reject the application or allow the application to be proceeded with : Provided that where no order has been passed, within the aforesaid period by the Settlement Commission, the application shall be deemed to have been allowed to be proceeded with. (2B) The Settlement Commission shall, - (i) in respect of an application wh....
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....i) the provision of sub-section (1) as they stood immediately before their amendment by the Finance Act, 2007, and after giving an opportunity to the applicant and to the commissioner to be heard, either in person or through a representative duly authorized in this behalf, and after examining such further evidence as may be placed before it or obtained by it, the Settlement Commission may, in accordance with the provisions of this Act, pass such order as it thinks fit on the matters covered by the application and any other matter relating to the case not covered by the application, but referred to in the report of the commissioner." 7. From the perusal of the statutory provisions noted above, it can be gathered that an assessee may at any stage of the case relating to him, make an application for settlement to the Commission under sub-section(1) of section 245C. Such application has to be made in a prescribed manner and is required to contain a full and true disclosure of the income of the assessee which had not been disclosed before the Assessing Officer and the manner in which such income had been derived besides such other particulars as may be prescribed. When such applicatio....
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....lls such requirements or not. Such scrutiny of-course would be summary in nature. We may recall that the Settlement Commission upon receipt of such an application within seven days thereof, has to issue notice to the assessee and pass a final order either rejecting the application or allowing the application to be proceeded within fourteen days of the date of application. Proviso to sub-section (1) of section 245D makes it further clear that when no such order is passed rejecting the application within the period prescribed, the application shall be deemed to have been allowed to be proceeded with. 9. Two things therefore, emerge. Firstly, that at the stage of section 245D(1) of the Act, the Commission would have ample powers to examine whether an application of an assessee made under section 245C(1) of the Act fulfills the legal requirements particularly, those provided in section 245C(1) of the Act. Secondly, that such inquiry however, shall have to be summary in nature. The later provisions of sections 245D would also demonstrate that any decision of the Commission to allow the application to be proceeded with would only be prima facie in nature. We would elaborate this aspect ....
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.... such order is passed declaring an application as invalid, the Commission would in terms of provisions of section 245D of the Act, proceed to decide the same on merits. Sub-section (3) thereof envisages calling for the records from the Commissioner and examining such records and carrying out such inquiry or investigation as the Commission thinks it necessary. Sub-section (4) empowers the Commission after giving an opportunity to the applicant and to the Commissioner to be heard, pass such order as it thinks fit on the matters covered by the application and any other matter relating to the case not covered by the application, but referred to in the report of the Commissioner. 12. The twin requirements for an assessee making an application for settlement under section 245C(1) of the Act, of containing full and true disclosure of income which has not been disclosed before the Assessing Officer and the manner in which such income has been derived, are thus of considerable importance and would be open for the Settlement Commission to examine the fulfillment thereof at several stages of the settlement proceedings. If therefore, while at the threshold, considering the question whether su....
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....ess leaders in their domain and the income earned has been mostly applied in the share capital of group companies. It was submitted before the Commission that the applicants used to participate in bidding process for securing the development work from the government, government agencies, public sector undertakings. Over a period of several decades, the applicants had achieved complete knowledge of the procedure, tactics and other technicalities of securing the contract from the Government and Government agencies, for which the applicants would receive remuneration in cash. Such contentions were turned down by the Commission observing that : "10.1 The above submission in the statement of facts was only read out by Learned AR and he admitted that there is not an iota of 'material' to relate to the so called 'manner' of earning income. 10.2 We have considered the facts of the case and also the submissions made by Learned AR. In our view the explanation offered by Learned AR is only a make believe story which is neither credible nor worthy of any credence. We would like to stress that it is not the question of 'sufficiency' of material which could be correlate....
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....tion of true and full disclosure open unable to judge the same. 16. Question is should such conclusion of the Commission be interfered in exercise of writ jurisdiction? The scope of judicial review in exercise of writ jurisdiction under Articles 226 and 227 of the Constitution of India while examining the validity of an order of the Settlement Commission has come up for consideration before various Courts in the past. In case of Jyotendrasinhji (supra), the Apex Court held and observed that the sole overall limitation upon the Commission appears to be that it should act in accordance with the provisions of the Act. The scope of inquiry whether by the High Court under Article 226 or by the Supreme Court under Article 136 is also the same namely, whether the order of the Commission is contrary to any of the provisions of the Act and if so, has it prejudiced the petitioner apart from the ground of bias, fraud and malice, which, of course, constitute a separate and independent category. 17. This view has been reiterated in various later decisions by the Apex Court. It is true that such decisions pertain to the final adjudication of an application for settlement by the Commission. How....
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....r the power is statutory, quasi-judicial or administrative. It was observed that the power of judicial review is not intended to assume a supervisory role. The power is not intended either to review governance under the rule of law nor for the courts to step into the areas exclusively reserved by the suprema lex to the other organs of the State. The court observed that the limited scope of judicial review is (i) Courts, while exercising the power of judicial review, do not sit in appeal over the decisions of administrative bodies; (ii) A petition for a judicial review would lie only on certain well-defined grounds (iii) An order passed by an administrative authority exercising discretion vested in it, cannot be interfered in judicial review unless it is shown that exercise of discretion itself is perverse or illegal. (iv) A mere wrong decision without anything more is not enough to attract the power of judicial review; the supervisory jurisdiction conferred on a Court is limited to seeing that the Tribunal functions within the limits of its authority and that its decisions do not occasion miscarriage of justice. (v) The courts cannot be called upon to undertake the government ....