TaxTMI 
TaxTMI 
2017 (9) TMI 1107
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....The three writ petitions, all at the behest of the Income Tax Department, involve similar issues and have been heard analogously. The parties have treated W.P. No. 33 of 2016 as the lead case and have advanced their respective submissions thereon. Additional Solicitor General appearing for the writ petitioners has submitted that, the impugned order is perverse. It does not give any reasons as to why the Settlement Commission has added the quantum of expenditure as done in the impugned order. There is no basis for adding such small quantum given the nature of the transactions that the Settlement Commission has considered in the Impugned Order. The Settlement Commission did not consider the report of the Department filed under Rule 9 of the....
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.... would be appropriate that, the matter be remanded to it for fresh consideration. Remand is possible. Learned Additional Solicitor General has relied upon 2010 Volume 8 Supreme Court Cases page 739 (Ajmera Housing Corporation & Anr. v. Commissioner of Income Tax) in support of such contention. Relying upon 2011 Volume 1 Supreme Court Cases page 1 (Brijlal & Ors. v. Commissioner of Income Tax, Jalandhar) learned Additional Solicitor General has submitted that, since the Settlement Commission has deviated from the procedure and has acted as an assessing officer, the impugned order stands vitiated. For the grounds as canvassed, the impugned order should be quashed and the matter may be remanded to the Settlement Commission for fresh considerat....
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....ations are possible, the Writ Court should not substitute its view with that of the Settlement Commission unless it is so outlandish so as to be categorized as arbitrary or perverse. Does the impugned order passed by the Settlement Commission dated June 10, 2014 warrant an interference under Article 226 of the Constitution of India, in the facts of the present case, is the issue falling for consideration in the present writ petition. The private respondent claims to be engaged in the business of developing and operating coal mines. It claims to have formed five Joint Venture (JV) Companies with various Public Sector Power Utility Companies. The private respondent and its promoters claim to hold 74% shares in such Joint Venture Companies w....
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....e companies which the private respondent has done. According to the revenue, the four companies are actually shell companies. The person in control and management of the private respondent is in control and management of these four companies as also other legal entities. Such person had utilized the four companies as the first layer and the other entities as the second layer to escape Income Tax liability of huge amount. The Settlement Commission has considered the rival contentions. It has noted that, the four companies are companies incorporated under the Companies Act, 1956 and that, they are subject to assessment as separate assessees. It has also noted that, the four companies did not resort to settlement under Chapter XIXA of the Ac....
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....res for the Assessment Year 2013-2014 aggregating to Rs. 36 Crores. It has not given any reason as to why such a quantum is arrived at. On the percentage of gross profit, the Settlement Commission has taken its own calculation. Again the reasons are specious. H.M. Esufali H.M. Abdulali (supra) has considered the distinction between a best judgment assessment and assessment based on the accounts submitted by an assessee. It has held that, when the assessing officer comes to the conclusion that, no reliance can be placed on the accounts maintained by the assessee, he has to proceed to assess on the basis of a best judgment. In doing so, the assessing officer may take such assistance of the accounts of the assessee that it may afford. The ass....
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....ores has not been added to the income of the private respondent. In the facts of the present case, it cannot be said that, the Settlement Commission has applied the principles of best judgment. The impugned order is, therefore, arbitrary and capricious. Gopal Gupta (supra) has held that, where two interpretations are possible, the Writ Court should not substitute its view in place of that of the Settlement Commission. The issue in the present case, is not one of substitution or non-acceptance of one possible view. The issue is of no reasons being given for the calculation of the sum of Rs. 36 Crores by the Settlement Commission as the amount required to be added to the income of the private respondent for each of the four shell companies. ....