TaxTMI 
TaxTMI 
TaxTMI 
2017 (6) TMI 787
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....anted some relief in the assessment and other defaults. When an assessee volunteers to approach the Settlement Commission, he does so to his prejudice. The Settlement Commission, therefore, should make every effort to have the matter settled before it. Adverting to the present case he has submitted that, the Settlement Commission did not undertake a process of settlement contemplated under the various provisions of Chapter XIXA of the Income Tax Act, 1961. The impugned order of the Settlement Commission does not return a finding as to the quantum of tax which the assessee is liable to pay. Not having arrived at the quantum of tax liability of an assessee and not having asked the assessee to pay the same, according to him, the Settlement Commission had failed to exercise jurisdiction vested in it by law. According to him, the Settlement Commission ought to have arrived at the tax liability of the assessee and ought to have called upon the assessee to pay the same. In the event, the assessee did not accept the assessment and did not offer to pay the same, the Settlement Commission could have proceeded to pass such order as deemed necessary under Chapter XIXA of the Income Tax Act, 19....
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....cords and the reports of the Commissioner. Not having done so, it could not pass an order either rejecting or accepting the settlement. It ought to have called for the records and report from the Principal Commissioner. Relying upon 2011 Volume 1 Supreme Court Cases page 1 (Brij Lal & Ors. v. Commissioner of Income Tax, Jalandhar) learned Senior Advocate for the petitioners has submitted that, the Supreme Court had noted the various provisions of the of the Income Tax Act, 1961 including the provisions relating to Chapter XIXA of the Act of 1961. He has submitted that, the Supreme Court has noted that, Section 245D has two distinct stages. He has submitted that, assessment in law is different from assessment by way of settlement. The procedure under Sections 245C and 245D in Chapter XIXA of the Act of 1961 is a special procedure. It requires a special type of computation of total income. The Settlement Commission is empowered to do so. Learned Senior Advocate for the petitioners has referred to the various provisions of Chapter XIXA of the Income Tax Act, 1961 particularly to the Sections 245D(2C) and 245D(3) of the Income Tax Act, 1961. He has submitted, in reference to the vario....
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....proceed to pass an order under Section 245D(4). He has referred to the order of the Settlement Commission passed under Section 245D(3) and has submitted that, such order does not say that, the records were called for. Such order refers to a letter dated November 26, 2015 by which the Principal Commissioner was requested to submit a report under Rule 9. Moreover, such letter was not disclosed to the petitioners at the relevant point of time. The report under Rule 9 called for is not the same as envisaged under Section 245D(3) of the Act of 1961. He has referred to the sequence of events happening before the Settlement Commission and has submitted that, the report under Rule 9 was also not furnished within the time stipulated by the statute. In any event, it cannot be construed to be one under Section 245D(3). Adverting to the facts of the present case, learned Senior Advocate for the petitioners has submitted that, the Settlement Commission has found that, the petitioners allegedly have come with unclean hands and did not make true and full disclosure of its income. The Settlement Commission had identified three transactions in the impugned order. He has referred to three transactio....
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....n return the findings as noted in the impugned order. Learned Senior Advocate for the petitioners has submitted that, on the three issues the Settlement Commission could have adjudicated the tax liability of the assessee and could have called upon the assessee to pay such tax in the manner as directed rather than coming to a finding that the transactions cannot be adjudicated upon. In such view, he has submitted that, the impugned order of the Settlement Commission should be set aside. The matter may be remanded to the Settlement Commission for a decision afresh. Learned Advocate appearing for the department has submitted that, an assessee approaching the Settlement Commission is required to make a true and full disclosure of his income. In the present case, the assessee did not do so. According to him, every reference to the Settlement Commission need not result in an order of settlement being passed. It is open to the Settlement Commission to accept the proposal for settlement, give orders on such settlement or to reject the application for settlement. In the present case, the Settlement Commission on appreciation of the facts and materials made available to it, has come to a f....
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....ition. The following issues have arisen for consideration in the present writ petition:- (i) Is the impugned order of the Settlement Commission dated January 24, 2017 vitiated due to jurisdictional errors in conduct of the proceedings before the Settlement Commission? (ii) To what relief or reliefs, if any, are the parties entitled to? A partnership firm, being the first petitioner herein, had made an application for settlement before the Settlement Commission for the assessment years 2013-2014, 2014-2015 and 2015-2016 on September 9, 2015. The same was taken up for consideration by the Settlement Commission on September 15, 2015. By an Order dated September 15, 2015, the Settlement Commission had found the requirements of the provisions of Section 245C to be fulfilled. The application for settlement was allowed to be proceeded with under Section 245D(1) of the Act for the three assessment years concerned. The Principal Commissioner was required to submit a report under Section 245D(2B) to the Settlement Commission. The Principal Commissioner had submitted a report dated October 9, 2015 under Section 245D(2B) before the Settlement Commission. In the report, various issues were ....
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....allowed to complete the enquiry. The report of the enquiry was directed to reach the Settlement Commission by October 4, 2016. The assessee had participated in the enquiry. The assessee did not raise any objections to the enquiry conducted or the subject matter of the enquiry. The Principal Commissioner had submitted a report dated October 10, 2016 with regard to the enquiry. The assessee through its Advocate's letter dated October 9, 2016 had responded to the queries raised by the Settlement Commission. The Principal Commissioner by a report dated October 24, 2016 had stated before the Settlement Commission that, the enquiry directed by the Order dated September 2, 2016 could not be completed as various details called from diverse parties were not made available to it within time. It had sought another three months time to complete the enquiry. The assessee through its Advocate's letter dated October 25, 2016 had dealt with the report of the Principal Commissioner dated October 4, 2016. It had sought to explain the queries raised by the Principal Commissioner. The Principal Commissioner by its report dated December 26, 2016 had submitted its views on the enquiry directed by the Or....
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....ible inference of such a conduct is that, such a party has waived its rights with regard to such jurisdictional issues and has submitted to the jurisdiction unconditionally. It is not a case of inherent lack of jurisdiction. The complaint of the petitioners is limited to procedural irregularities which had allegedly infringed upon the jurisdiction propriety of the conduct of the proceedings by the Settlement Commission. Virgo Steels, Bombay & Anr. (supra) has held that, a mandatory requirement of a statute can be waived by the party concerned, if the statute seeks to confer a privilege on the party. It has noted four Supreme Court decisions and a decision of the Privy Council on the issue. It has held that, even though a provision of law is mandatory in its operation, if such provision is one which deals with the individual rights of the person concerned and is for his benefit, such person can always waive such a right. Johri Mal (supra) has held that, while exercising the power of judicial review, the Court is more concerned with the decision making process rather than the merit of the decision itself. It has also held that, while examining and scrutinizing the decision making p....
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....eliberately fails to make a full and true disclosure of its income. Smt. Sudha Patil & Anr. (supra) has held that, merely because no appeal has been provided against the order of the Settlement Commission, the same does not enlarge the scope of supervisory power of the High Court nor can the High Court exercise powers as an appellate authority. Rashmi Infrastructure Developers Ltd. (supra) on the facts of that case has found that, the petitioner is not in a position to substantiate that the finding of the Settlement Commission that, the assessee did not make full and true disclosure, was perverse. The writ petition was not entertained. An assessee is entitled to approach the Settlement Commission for the purpose of settlement of tax liability or any other liability that may arise under the provisions of the Income Tax Act, 1961. An assessee is, however, required to make a full and true disclosure of its income, the manner in which the income has been derived, the additional amount of income tax payable on such income and such other particulars as may be prescribed to the Settlement Commission. The Principal Commissioner immediately on receipt of the Order dated September 15, 2015....