TaxTMI 
TaxTMI 
2016 (7) TMI 960
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....d prosecution. 2. Taking us at length through the impugned order passed by the Settlement Commission, learned counsel for the department submitted that the Settlement Commission has not recorded proper reasons for accepting offer of settlement by the assessees. The Settlement Commission has not provided any basis or yardstick for estimating income of the assessees and finally the Settlement Commission has allowed the assessees to revise their offers which would indicate that initially the disclosures made by the assessees were not full and true disclosures. The Settlement Commission should not have permitted the assessees to revise such offers as is held by the Supreme Court in the case of Ajmera Housing Corporation & another vs. Commissioner of Income Tax, reported in 326 ITR 642. 3. In addition to relying on the said case of the Supreme Court in the case of Ajmera Housing Corporation (supra), counsel referred to the following decisions: (1) Commissioner of Incometax, Jalpaiguri vs. Om Prakash Mittal, reported in 273 ITR 326 in which the full bench of Calcutta High Court observed that though the Settlement Commission has sufficient elbowroom in assessing the income of the appl....
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....order passed by the Settlement Commission is quite restricted, is no longer a new or unknown proposition. It is held by series of judgments by the Supreme Court as well as by High Courts that though finality given to an order of Settlement Commission would not bar a writ petition before High Court, the scope of judicial review would be restricted to considering whether order is contrary to any provisions of the Income Tax Act. Reference in this respect made be made to the decision of the Supreme Court in the case of Jyotendrasinhji (supra) in which it was observed that 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 to see whether the order of the Commission is contrary to any of the provisions of the Act and if so, apart from the ground of bias and malice which constitute a separate and independent category as it prejudices the applicant. In the case of Saurashtra Cement Ltd. and others vs. Commissioner of Customs and another reported in 2012(3) GLH 235, Division Bench of this Court made following observations:....
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....onfines of judicial review of the decision of the Settlement Commission, it is undeniable that the jurisdiction under Article 226 of the Constitution is not totally ousted. In a given situation if the Settlement Commission has taken into consideration irrelevant facts and such consideration has gone into its decision-making process resulting into grave injustice and prejudice to the party then within the narrow confines of the judicial review, interference would still be open." 6. With this background, we may revert to the facts of the case. The Settlement Commission had in the impugned order examined material on record in the context of the declarations made by the applicants for settlement including certain transactions of the applicants of lending their on money on short term basis. The Settlement Commission had thereafter come to the conclusion that the offers of the assessees for settlement considering their disclosure of 15 per cent return on the revised figure of on money of Rs. 50 lakhs, Rs. 50 lakhs and Rs. 75 lakhs respectively required to be accepted. We may recall that the initial declaraltion of such sums of Rs. 25 lakhs, Rs. 21 lakhs and Rs. 30 lakhs respectively and....
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....assessees should not be settled at less than Rs. 223.55 crores. The arguments on the question whether Settlement Commission should allow the application to proceed further were concluded and order was reserved at which stage, the assessee filed revised settlement application declaring additional income of Rs. 11.41 crores. The Settlement Commission thereafter passed an order on 17.11.1994 deciding to proceed with the application of settlement. The Settlement Commission thereupon asked the Commissioner to furnish a further report. The Commissioner in his report dated 30.8.1995 contended that the income disclosed by the assessee should not be treated as true and correct and asserted that the total unaccounted income of the assessee was to the tune of Rs. 187.09 crores. Hearing of the case commenced before the Settlement Commission. During the course of such hearing, the assessee made a further disclosure of unaccounted income of Rs. 2.76 crores. Ultimately on 29.1.1999 the Settlement Commission passed an final order determining total income of the assessee for the said assessment years at Rs. 42.58crores. 8. This order was challenged by the Commissioner before Bombay High Court. Agg....
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....r, we say nothing more on this aspect of the matter as the Commissioner, for reasons best known to him, has chosen not to challenge this part of the impugned order." 9. We may recall that such observations were made by the Supreme Court being conscious of the fact that the Revenue had not preferred any appeal against judgment of the High Court on the question of full and true disclosures. Despite which the Supreme Court examined the issue threadbare and made above-noted observations. 10. It can thus be seen that on the issue of true and full disclosure, stage at which such disclosures should be made and the effect of making further disclosures by revising initial offers of settlement was examined by the Supreme Court in the case of Ajmera Housing Corporation (supra). The manner in which the Supreme Court has dealt with such issue and has made elaborate and conclusive observations, it cannot be stated contrary to what was argued before us that the above-noted portion of the judgment should not be seen as ration of the judgment of the Supreme Court. Ratio of this judgment is that the true and full disclosure of the income must be made at the initial stage and large scale remissions....