TaxTMI 
TaxTMI 
2017 (6) TMI 877
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.... premises of the petitioner and his relatives on 27.09.2012. Of the premises searched, one of them was that of the nephew of the petitioner, one Ritesh Agrawal. During such search, several documents including a rough note book containing references to various transactions of off market commodities were seized. The petitioner filed return of income in response to notices issued by the department under Section 153A of the Act. During the pendency of such assessment proceedings, the petitioner filed a settlement application as provided under Section 245C(1) of the Act on 19.02.2015. Such application covered the period of assessment years 2007-2008 to 2013- 2014. The Settlement Commission on such application passed an order on 24.02.2015 and allowed the application to proceed further. The Commission made the following observations: "7. We have carefully considered the applications filed before us and have also heard the applicants' representatives. The applicants have declared the additional income before us, which has not been disclosed before the Assessing Officer earlier. The applicants have also paid the additional tax and interest payable with reference to the additional ....
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.... satisfactorily explained the manner of deriving the undisclosed income offered in the settlement applications, in the SOF as well as during the course of the present proceedings before us. No clinching, cogent and direct evidence has been placed on record by the department before us to come to the conclusion that the above applicants have not made true and full disclosure of their income in the settlement applications. We have no adverse material/information in our possession at this stage to hold otherwise. The technical requirements, such as, pendency of proceedings, disclosure of additional income not disclosed before the A.O., due compliance of the threshold limit of tax, payment of additional tax and interest thereon, payment of filing fee and intimation to the A.O. under Section 245C(4) have all been fully complied with. Under the circumstances, we are of the opinion that the above settlement applications cannot be held to be 'invalid'. Accordingly, we allow the applications to be proceeded with further within the meaning of Section 245D(2C) of the Act." 2.3 The department persisted with its opposition of the petitioner's stand that only some of the transactions were ente....
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....further consideration. The main grievance of the petitioner projected before us by his counsel was that the Settlement Commission has discarded the affidavits produced by the petitioner of four persons who confirmed that the transactions referred to in the seized diary were those in which they were the sub-brokers and the petitioner had acted as a broker. According to the petitioner, further and proper inquiry had to be made before discarding such affidavits. 3. Appearing for the petitioner, Senior Counsel Shri Soparkar took us extensively through the documents on record. He drew our attention to the various orders passed by the Settlement Commission including the final order rejecting the application of the petitioner. He submitted that the petitioner had produced materials on record to substantiate his theory that all the transactions mentioned in the seized diary did not represent his own trading in the commodities. To the extent 29 names/entities represented his direct dealings, the petitioner had offered the entire amount to tax in the settlement application itself. In the remaining transactions the petitioner had acted only as a broker and received 0.4% brokerage on the va....
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....ome to factual findings. Such findings are supported by reasons recorded by the Commission. These findings are not perverse. This Court in exercise of writ jurisdiction would not interfere with the factual conclusions of the Settlement Commission when there is nothing on record to suggest that the same were perverse or not supported by any evidence on record. In this regard, counsel relied on the decision of this Court in case of Vishnubhai Mafatlal Patel vs. Assistant Commissioner of Income-tax reported in [2013] 31 taxmann.com 99 (Gujarat). Counsel further submitted that requirement of making true and full disclosure of the unaccounted income is a basic requirement to sustain an application for settlement which flows from sub-section (1) of Section 245C of the Act and such requirement would run through the entire life of the settlement proceedings. Earlier orders passed by the Settlement Commission allowing the settlement proceedings to proceed further were only tentative in nature and would not preclude the Settlement Commission from rejecting the application at a later stage if it is found that the applicant had not made true and full disclosures of the unaccounted income. In t....
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....tesh Agrawal contained the records of off market trading transactions/hedging transactions carried out by his group and that there was no chance that these transactions would have been recorded in the regular books of accounts. The petitioner also agreed to draw the Profit and Loss account in respect of transactions recorded in the said seized diary within 7 days. Though the copies of the entries from the seized diary were supplied to the petitioner, he did not furnish any explanation with regard to the said entries. It was only in the course of his statement under section 132(4) recorded on 5th and 6th of November, 2012, he took a stand that the transactions relating to 29 names were in respect of off market commodity trading done by his group and the remaining entries represented his involvement as a broker. He was asked to give the names, addresses and other details of the persons in respect of whom he had executed such brokerage transactions. He promised to provide such details within ten days but did not do so. The Commission noted that in case of one person namely Sanjeev Kumar, the transactions involved a profit of Rs. 36.67 crores during the period between 09.01.2012 to 21.....
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....ed in Annexure A2 seized from the residence of Shri Ritesh Agrawal also relate to transactions carried out in the capacity of broker is not substantiated and the confirmations and affidavits of the four claimed sub brokers are only self-serving evidence. Therefore, the applicant's request for directions to the department to carry out verification as to the ownership to the transactions carried out to the applicant on brokerage basis cannot be accepted. The applicant has relied on Mehta Parikh and Co. 30 IT 181 (SC). It is respectfully submitted that in Smt. Gunwantibai Ratilal v/s. CIT 146 ITR 140 (MP) special leave petition dismissed by the Supreme Court 156 ITR (St. 43) SC it was held that the Mehta Parikh and Co. case cannot be construed to lay down the proposition that unless the deponent is cross-examined, the affidavit cannot be rejected. That decision lays down that if there is no material whatsoever on record for doubting the veracity of the statements made in the affidavit and if the deponent has also not been subjected to cross examination for bring out the falsity of its statement, then the Tribunal will not be justified in doubting the correctness of the statements made....
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....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. However, limitations recognized by the Courts in exercising powers of judicial review against the orders of the Settlement Commission, in our opinion, would not be of much difference even where an order of the Sett....
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....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 duties and functions. The court shall not ordinarily interfere with a policy decision of the State. Social and econom....
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....brokers for whom the petitioner had acted as a broker in respect of certain entries made in the seized diary. However, this by itself cannot be clinching evidence, nor can the petitioner contend that such factor cannot be discarded without cross examination of the deponents. The affidavits of such persons would certainly be a relevant factor to be taken into account by the Commission but can neither be sole nor a conclusive factor. The Commission was duty bound to take into account all the evidences and documents on record and evaluate for itself the contents of affidavits produced by the petitioner. If on basis of existing materials itself the contention of the petitioner and the contents of the affidavits are found to be unreliable it would always be open for the Commission to adopt such a course. To cause further inquiry including offering such deponents for cross examination at the hands of the department would certainly be one of the options before the Commission. However, it cannot be stated that even if there is reliable, weighty, contrary evidence, the Commission cannot go against the contents of such affidavits without cross examination of the deponents. In case of Mehta P....