TaxTMI 
TaxTMI 
2016 (9) TMI 817
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....rch and seizure operations were conducted by the Investigating Wing under Section 132 of the Income Tax Act on 21/09/2012 at the premises of M/s. Saakar Reality, its partners and family members. The other major firms of the Group are M/s. S.T. Associates, M/s Maa Vaishno Real Estate and M/s S.S. Associates. 4. It has been further stated that group is owned, managed and controlled by Shri Gopal Goyal and Shri Sanjay Dasot. Shri Gopal Goyal and Shri Sanjay Dasot partners of the firm have voluntarily admitted additional undisclosed income of Rs. 30 crores on behalf of Saakar Group during the search proceedings. 5. The cases were centralised with the then DCIT (Central), Indore and notices were issued under Section 153A / 153 C for the Assessment Years 2008-2009 and 2013-2014. Notice was issued under Section 143(2) for the Assessment year 2014-2015 on 30/06/2014. The assessee has filed an application before the Settlement Commission on 23/03/2015. The application of the assessee was processed by the Settlement Commission in SA No. MP/BCC/128 to 131/2014-15/IT and an order was passed under Section 245 D(1) on 31/03/2015. 6. It has been further stated that on receipt of order of....
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....on Bench of this Court at Principal seat in the case of Pr.Commissioner of Income Tax (Central) Bhopal vs. Dilip Buildcon Limited in W.P.No.20818 of 2015. It has also been stated that the Hon'ble Supreme Court of India has taken similar view in the case of K.Jaiprakash Narayanan reported in (2009)184 TAXMAN 85(SC). The respondent No.1 has prayed for dismissal of the writ petition. 11. Heard learned Counsel for the parties at length and perused the record. 12. In the present case, the undisputed facts reveal that respondent No.1 was subjected to Search and Seizure operations conducted by the Investigating Wing under Section 132 of the Income Tax Act on 21/09/2012. It has also been an admitted fact that the Group has voluntarily admitted additional disclosed income of Rs. 30 crores. 13. It is also an undisputed fact that respondent No.1 has submitted an application before the Settlement Commission on 23/03/2015 and the matter was processed by the Settlement Commission,. The Principal Chief Commissioner of Income Tax (Central) Bhopal has submitted a detailed report in the matter under Section 245D(2B) on 05/05/2015 and a prayer was made to reject the application submitted....
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.... thereof reliance is placed on the cases of Bombay High Court and Delhi Court: Commissioner of Income Tax (Central) Vs. Income Tax Settlement Commissioner (ITSC), (2014) 267 CTR 0007 (BOM); and, Marc Bathing Luxuries Limited Vs. Income Tax Settlement Commission and Another, (2013) 94 DTR 0241 (DEL), to say that the order passed under section 245-D(2C) without taking note of the Report of the Department is unsustainable and the prayer made is that the matter be remanded back and proceeded with. Writ Petition Nos:: 20817/2015, 20818/2015 & 20892/2015. 4- Refuting the aforesaid Shri Sumit Nema, learned counsel for the respondent, invites our attention to an order passed by the Supreme Court in the case of Commissioner of Income Tax Vs. K. Jayaprakash Narayanan, (2009) 184 TAXMAN 85 (SC), to say that interference at this stage is not called for. The proceedings are still pending before the Settlement Commissioner and, therefore, the Department can raise all such question before the Settlement Commissioner, where the matter is pending and the Settlement Commissioner can still take note of the same. 5- Further reliance is placed on a Division Bench Judgment of this Cour....
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.... "1. Delay condoned. 2. This Special Leave petition is filed against the decision of the Settlement Commission admitting the application of the assessee under Section 245D of the Income-Tax Act, 1961. It is the case of the Department that the assessee had failed to make full and true disclosure in the first instance and that the said declaration made at a later date by way of second declaration cannot be the ground for admitting the application under Section 245D. Since this Special Leave petition is filed only against the order of the Settlement Commission admitting the application of the assessee under Section 245D, we do not wish to interfere at this Stage. However, we make it clear that on the point of maintainability of the Application, it would be open to the Department to raise the contention before the Settlement Commission who would be entitled to examine that question at the final hearing of the matter." 16. The Division Bench of this Court in the case of Commissioner of Income Tax-I, Indore vs. Asian natural Resources India Ltd., has again decided a similar controversy. Paragraph 21-29 of the aforesaid judgment reads as under:- 21. The Division....
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....he Settlement Commission may, at any stage till it passes a final order under Section 245D(4), examine the issues and if there is sufficient material on record, determine the question of full and true disclosure and the manner in which the undisclosed income was derived conclusively and, depending on such a decision, the applications may be thrown out or they may be proceeded with further. 24. We are of the view that the order of the Supreme Court in K. Jayaprakash Narayanan (supra) and the decision of the Division Bench of this Court in True Woods Pvt. Ltd. (supra) clinch the issue in favour of the respondents. As such, this Court ought not to interfere with the impugned orders. However, we need to examine the decision of the Supreme Court in the case of Ajmera Housing (supra) which has been strongly relied upon by the learned counsel for the petitioner. In fact, the learned counsel for the petitioner went to the extent of submitting that in view of the decision of the Supreme Court in Ajmera Housing (supra), the orders/decisions in K. Jayaprakash Narayanan (supra) and True Woods Pvt. Ltd. (supra) would no longer be good law. 25. In Ajmera Housing (supra), an ord....
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.... amounts, which were not taken into consideration while assessing the total undisclosed income, are also taken into consideration, the amount of leviable penalty may be much more. Taking into consideration the multiple disclosures and the fact that the respondents had failed to make true and full disclosure initially as well as at the time of second disclosure, we do not find any justifiable reasons to reduce or waive the amount of penalty so drastically. Taking into consideration all these circumstances, in our considered opinion, it will be in the interest of justice to set aside the final order passed by the Settlement Commission and to remand the matter back to the Settlement Commission for hearing parties afresh and to pass orders as per law. Facts and circumstances noted in respect of writ petition No. 2191 of 1999 are also relevant for the remaining writ petitions and, therefore, it will be necessary that the final orders passed in all these proceedings should be set aside." 34. The learned counsel for the petitioner had also taken a point that the settlement applications of respondents 3 and 4 had been rejected for failure to pay the additional tax and the....
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....n 29 August 2013 under the provisions of sub-section (2C) of Section 245D of the Income Tax Act 1961. By the order which has been impugned, the Settlement Commission has held as follows : "In the totality of facts available to us at present, we are satisfied about the true and full nature of the disclosure made. The manner of making undisclosed income, in the facts of the case, as stated, is on sales kept outside the books resulting in understatement to sales. Needless to say, as observed by the Hon'ble High Court in this very case, that if at a later stage of the proceedings, facts come to our knowledge showing suppression of full material facts or mis-statements thereof, the law will take its own course. 2. The Commission has accordingly held that the application filed by the Second Respondent is not an invalid application and should be allowed to be proceeded with further. Following the order which was passed by the Settlement Commission on 29 August 2013, further hearings took place before the Commission on 19 September 2013 and 7 October 2013. The grievance of the Petitioner is that the Commission has without ordering an enquiry by the Commissioner under ....
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....ement Commission setting out that an enquiry under subsection (3) of 245D was necessary in respect of certain specific issues. The grievance of the Petitioner, is that on 19 September 2013 at a hearing before the Commission it wasindicated that the department would be heard on the issue relating to a Section 245D(3) enquiry on 7 October 2013, but as a matter of fact the Commission has not applied its mind to whether an enquiry under Section 245D(3) should be ordered. 5. The learned senior counsel appearing on behalf of the Second Respondent on the other had has submitted that the issue as to whether an enquiry under Section 245D(3) should be ordered by the Settlement Commission has not been finally concluded by the Settlement Commission, and during the course of the proceedings, the Settlement Commission would apply its mind to that aspect. As we have noted earlier, by a letter dated 3 October 2013 to the Settlement Commission, the Commissioner of Income Tax (Central) Pune has drawn the attention of the Commission to the specific issues on which a further enquiry or investigation under Section 245D(3) would be necessary. 6. Sub-section (4) of Section 245D provides....
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....tion (4) that the Settlement Commission is not required in every case to cause an enquiry or investigation to be made under subsection (3).That is evident by the use of the words "if any" in sub-section (4). Moreover, under sub- section (4) the Settlement Commission, besides considering the report, if any, of the Commissioner under subsection (2B) or sub-section (3) is empowered to examine such further evidence as may be placed before it or obtained by it. Evidence placed before the Commission would include evidence which may be produced either by the assessee or by the Commissioner. Evidence obtained by the Commission would include evidence which the Commission has obtained under its own authority. In that sense the powers of the Settlement Commission are wide. Finally, it may be necessary to note that under subsection (4) the Settlement Commission has to pass an order in accordance with the Act as it thinks fit on matters covered by the application. The Settlement Commission may also pass an order on any other matter relating to the case not covered by the application, but which has been referred to in the report of the Commissioner. Hence, if the Settlement Commission intends to....
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....ion at the stage of entertaining the application is whether a prima facie case is made out or not and in that context only subsequent amendments which have been brought in Sections 245C and 245D of the Act had dispensed with even issuing a preliminary notice to the Commissioner of Income Tax leaving it to the absolute discretion of the Settlement Commission to entertain a case or not for its consideration. The reasons for giving such discretion to the Commission cannot be lost sight particularly keeping in view of the objects of establishment of Settlement Commission and to settle the disputes between the taxpayer and the department in an amicable manner. As a matter of fact, the recent legislative efforts in bringing Section 268A of the Act and in issuing various circulars whereby restraining the department officials to file appeals and further appeals in all and sundry cases recognising futility of such exercise may be noticed. A close perusal of the order passed by the Settlement Commission, both at the stage of admission and also at the stage of passing of the final order, we find, as a matter of fact, ample opportunity was given to the Department to file their objections and a....
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.... His next submission is that before passing of order standing counsel of the department should he heard. He also drawn our attention to the news item Annexures P/1 and P/11 and submits that the disclosure made by the respondent No.1 was not full and true and thus, the learned authority has committed an error in accepting the application. In support of the aforesaid contention he placed reliance on the following cases CIT (Central) Calcutta v/s. B.N. Bhattachargee & Anr., 118 ITR 461 (SC), CIT v/s. Anjum M.H. Ghaswala & Ors., 252, ITR 1 (SC), CIT v/s. Express Newspapers Ltd, 1994 (206) 443 (SC), Ajmera Housing Corpn. v.s CIT, 2010 (193) Taxman 193 (SC), Kuldeep Industrial Corporation v. Income-tax Officer & Ors., 223 ITR pg 840 (SC), Commissioner of Income Tax (Central) Pune v/s. Income Tax Settlement Commission (ITSC), 2013 (40) taxmann.com 201 (Bombay), Commissioner of Incometax v/s. Godwin Steels P. Ltd, 2013 (353) ITR 353 (Delhi), Hassan Ali Khan v/s. Settlement Commission, 2008 (168) Taxman 78 (Bom), Commissionerof Incometax v/s. Income-tax Settlement Commission & Anr., 2009 (310) ITR 10 (Mad) and Commissioner of Incometax v/s. Om Prakash Mittal, 2005 (273) ITR pg 326 (SC). ....