TaxTMI 
TaxTMI 
2016 (12) TMI 675
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....ction of buildings, roads, dams, canals and power projects. The turnover of the petitioner is in the range of Rs. 150 - 165 crore in the past six years. Petitioner has been filing its return of Income Tax since its incorporation. 3. A search under Section 132 of the Income Tax Act had taken place in the business premises of the petitioner on 16th February 2012 up to 10th April 2012. Several documents and materials, such as hard discs of various computers, have been seized during the course of search. The respondent No.3 issued notices under Section 153A of the Act for the said Assessment Year calling upon the petitioner to file a return of income. Accordingly, return of income was filed on 24th January 2014 returning the same income as was originally returned under Section 139 of the Act. 4. Subsequently, petitioner filed an application in Form 34-B of the Act before the first respondent for the Assessment Years making full and true disclosure of the income disclosing additional undisclosed income. It stated in their returns what was the source of such incomes and what was the modes of earning such income. Petitioner also paid the taxes due and interest thereon on the additional ....
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....r its order dated 27th May 2016. On the application filed by the petitioner under Section 245D(6D) of the Act the respondent No.1 has passed an order on 11th August 2016 rejecting the application on untenable grounds. 8. Respondent No.1 did not apply for certified copy immediately and hence the time limit has to be reckoned only from the date of pronouncement. The date of order alone should be taken for the purpose of limitation. The period for which the copy of the order is not ready, cannot be excluded in the present case and it is applicable only when a further appeal is to be filed. It is stated that the letters submitted by the petitioner cannot be construed as the consent and further consent cannot confer jurisdiction which did not exist or extend the limitation. It is also settled position of law that the order should leave the control of the officer before the limitation day. The order was received on 2nd June 2016 which merely demonstrates that it did not leave the control of the Settlement Commission even on 27th May 2016 by which date the order had already been barred by time. 9. It is submitted, the digital evidence referred to is an alleged mirror image of the comput....
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....he entire cash withdrawals in their assessments. If the entire cash withdrawal is used for sundry payment, the projects, which are all labour intensive, could not have been completed. The allegations of the Department referred to in paragraph 15.2 at page 62 of the order dated 27th May 2016 are proved to be imaginary and without basis. The Department is blowing hot and cold together. On the one hand the department is taking a stand that the so called sundry payments have been made from out of the cash withdrawals made by M/s. Murudeshwara Ceramics Ltd, and nine partnership firms and withdrawals in petitioner's books (which means the sources are available), but, on the other hand, the department clams that the expenditure had been incurred for which there are no sources available. 12. The respondents No.2 and 3 or any other officer of the Department before seeking the services of lab systems, should have called for objections from the petitioner. Due to the breach of standard operating procedure, the report from a private party is to be ignored. Having failed to get the acquisition and analysis done by a competent person, the report obtained from lab systems is not reliable. Petiti....
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....e petitioner is facing financial difficulties. The order passed by the Settlement Commission discloses that majority of the addition is in respect of the illegal payments made by the petitioner to various political parties, leaders, and the Government officials for taking official favour. Those payments are opposed to the public policy and are specifically not to be allowed in view of Explanation to Section 37 of the Act. The apprehension of the petitioner to the show-cause notice is premature. The contention of the petitioner that the order passed by the Settlement Commission is barred by limitation is not correct. The limitation provided under Section 245D(4A) of the Act would be directory and not mandatory. At each and every stage of the proceedings the petitioner has been extended due opportunity and at no point of time the petitioner has been denied any opportunity and all the materials placed by the petitioner has been taken note of by the Commission. The digital evidence is not an admissible evidence and the procedure followed in relation to digital evidence is unsustainable and agency is not competent, is not sustainable. The provisions of Evidence Act and the Information T....
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....tion of the revenue that the order passed by the settlement commission is within the time limit provided under Section 245D(4A) of the Act. Without prejudice to the said contention, it is submitted that the limitation under Section 245D(4A) of the Act is directory and not mandatory and hence even if it is presumed that the order under Section 245D(4) of the Act is not passed within the time, the order passed by the Income Tax Settlement Commission does not abate under Section 245HA(1)(iv) of the Act. The Revenue has relied upon the above decision of the Bombay High Court particularly paras 31, 32, 33, 39, 49, 51, 53 & 54 and contended that the limitation provided under Section 245D(4A) of the Act is directory. It is contended that though controversy in the said judgment was with reference to Section 245D(4A)(i) of the Act, in view of the interpretation being placed on Section 245HA(1)(iv) of the Act, the principle laid down therein would apply to Section 245D(4A)(iii) of the Act also. The learned Additional Solicitor General thus prays for rejecting the writ petitions. 18. The point that arises for consideration is: "Whether or not the order dated 27.5.2016 passed by the Settlem....
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....6. The order passed on 27.5.2016 is well beyond the limitation prescribed under Section 245D(4A)(iii) of the Act and by operation of Section 245HA(1)(iv) of the Act, the proceedings before the Settlement Commission was abated much earlier to 27.5.2016 and therefore the order passed by the Settlement Commission on 27.5.2016 is not sustainable in the eye of law. In the said circumstances, the Settlement Commission ought to have entertained the rectification application filed by the petitioner to set at naught the order dated 27.5.2016 which is barred by time, which is an error of law apparent on the face of the records. 20. The Revenue has vehemently contended that the order passed by the Settlement Commission is within the time of limitation provided under Section 245D(4A) of the Act. The said submission has not been substantiated by the Revenue. However, as an alternative contention, the Revenue has contended that the limitation provided in Section 245D(4A) of the Act is directory and it is not mandatory and hence even if it is presumed that the order is not passed within the time, the proceedings before the Income tax Settlement Commission does not abate. In this regard, the Reve....
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....ault of the applicant. It does do some violence to the language, but at the same time the constitutionality of the provision can be upheld. To do otherwise would be to punish an applicant for the inability of the Settlement Commission to fulfill its statutory obligation, for matters completely beyond the applicant's control..." 54. From the above discussion having arrived at a conclusion that fixing the cut-off date as 31st March, 2008 was arbitrary the provisions of s.245HA(1)(iv) to that extent will be also arbitrary. We have also held that it is possible to read down the provisions of s.245HA(1)(iv) in the manner set out earlier. This recourse has been taken in order to avoid holding the provisions as unconstitutional. Having so read, we would have to read s.245HA(1)(iv) to mean that in the event the application could not be disposed of for any reasons attributable on the part of the applicant who has made an application under s.245C. consequently only such proceedings would abate under s.245HA(1)(iv). Considering the above, the Settlement Commission to consider whether the proceedings had been delayed on account of any reasons attributable on the part of the applicant. If it ....