TaxTMI 
TaxTMI 
2018 (9) TMI 1697
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....ns are decided and disposed of together by this common judgment and order. 2. By way of these petitions under Article 226 of the Constitution of India, the common petitioner - Department i.e. the Commissioner of Income tax (Central) (Circle-II), Ahmedabad, has prayed for an appropriate writ, direction or order to quash and set aside the impugned order(s) dated 04.12.2007 and 27.12.2012 insofar as it does not allow the Settlement Application preferred by respondent No.2 to be proceeded with for all Assessment Years as stated in the settlement application and to direct respondent No.1 Settlement Commission to pass final orders under Section 245D(4) with regard to the said remaining Assessment Years. The petitioner has also prayed to quash and set aside the order dated 19.06.2013 rendered under Section 154 read with Section 245D(6B) of the Act and to direct the Settlement Commission to allow the same and to hear the settlement application on merits insofar as the remaining assessment years are concerned. 3. The facts leading to the present Special Civil Application in nutshell are as under: For the sake of convenience, the facts in Special Civil Application No.17177/2013 are ....
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....thereafter, respondent No.1 as learned Settlement Commission, Mumbai, passed an order under Section 245D(4) on 27.12.2012 in respect of the above applications and it was found that the said order has been passed considering only some of the assessment years incorporated in each of the applications whereas, the remaining assessment years of the respective applications have not been considered and decided in the said order passed under Section 245D(4) dated 27.12.2012. The assessment years for which such orders were passed in respect of the applications are as below:- Sr. No . Name of the applicant A.Y.s for which application allowed to be proceeded and final orders were passed u/s.245D(4) Date of Order u/s.245D(2 A) and 2(C) 1 M/s.Jay Bee Distributors Pvt. Ltd. 2004-05 04.12.2007 2 M/s.Jay Bee Distributors Pvt. Ltd. 2005-06 04.12.2007 3 2003-04 04.12.2007 4 M/s.Tad Pharma Ltd. 2001-02 04.12.2007 5 Shri Jagjitsingh Channa 2003-04 & 2005- 06 04.12.2007 6 Mrs.Satvinder Paul Kaur Sethi 2003 -04 to 2004-05 04.12.2007 7 Shri Kuldeep Singh Mehta 1999-2000 to 2004-05 04.12.2007 8 ....
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....lications in respect of some of the Assessment Years only and not for all the Assessment Years for which the applications were filed is absolutely illegal, wholly without jurisdiction and contrary to the provisions of the Act. 3.7 It appears that thereafter, the Revenue / Department submitted the application(s) before the Settlement Commission under Section 154 read with Section 245D(6) of the Act and requested to consider the settlement application(s) for the remaining years for which the order(s) are not passed under Section 245D(1) of the Act. That the learned Settlement Commission vide order dated 19.06.2013,has rejected the said applications holding that the order under Section 245D(6B) to rectify the order under Section 245D(4) dated 27.12.2012 would tantamount to review/ recall which is not permissible under the provisions of law. 3.8 Hence, the Revenue has preferred the present Special Civil Applications for the aforesaid reliefs. At this stage, it is required to be noted that the Department has also amended the petition making averments challenging the order passed under Section 245D(4) on merits. However, there is no prayer to quash and set aside the order(s) pas....
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....be proceeded with. The only requirement thereupon is that if an additional income is disclosed before the Settlement Commission, which was earlier not disclosed before the Assessing Officer, then the additional tax and interest thereon was required to be paid on or before 31.07.2007. Thus, the Section clearly indicates that in view of the deeming provision, no adjudication was required on the part of the Settlement Commission to decide as to whether any application was required to be allowed to be proceeded further or to be rejected. At the cost of repetition, it is reiterated that once the three conditions enumerated in Section 245D(2A) stood fulfilled, the entire application with regard to all the years which is the subject matter of such application, is required to be treated as deemed to have been allowed to be proceeded further. 4.4 It is further submitted by Shri M.R.Bhatt, learned Senior Advocate appearing on behalf of the Revenue that the main contention of the respondent-assessee appears to be that in respect of the Assessment Years for which the application is not allowed to be proceeded further, there was no additional disclosure and, therefore, no tax and interest th....
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....passed as contemplated under Section 245D(2C) of the Act. It is submitted that the only communication received was dated 04.12.2007 (page 163) which required the petitioner to furnish a report on the "matters covered by the application". It is submitted that admittedly, matters covered under the Settlement application preferred by the assessee were for various years. In support of his above submissions, Shri M.R.Bhatt, learned Senior Advocate appearing on behalf of the Revenue has heavily relied upon the decision in the case of Principal Commissioner of Income-tax (Central) v. Settlement Commission reported in 386 ITR 660 (Gujarat). 4.8 It is further submitted by Shri M.R.Bhatt, learned Senior Advocate appearing on behalf of the Revenue that in the instant case,there is no order under Section 245D(2C) of the Act communicated to the petitioner. It is submitted that therefore, as per the Scheme of the Act,it is only at the time of hearing i.e. 245D(4) that the grievance with regard to nonadmission of the settlement application for few years was raised (page 41) and the decision of the settlement application is at page 51. 4.9 It is further submitted by Shri M.R.Bhatt, learne....
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....ted under Section 245C(1D), in view of the deeming provision of Section 245D(2A), the entire application was deemed to have been allowed to be proceeded further. 4.13 It is further submitted by Shri M.R.Bhatt, learned Senior Advocate appearing on behalf of the Revenue that in the present case, as such, the petitioner came to learn about non-admission of the application for few years at the time of hearing under Section 245D(4). That thereafter, when the Department submitted the application under 154 read with Section 245D(6), the same ought to have been allowed by the Settlement Commission. 4.14 It is further submitted by Shri M.R.Bhatt, learned Senior Advocate appearing on behalf of the Revenue that even the orders passed by the Settlement Commission allowing certain claims of the assessee which are the subjectmatter of Special Civil Application Nos.17177/2013, 17181/2013 and 17185/2013, are erroneous. 4.15 It is further submitted by Shri M.R.Bhatt, learned Senior Advocate appearing on behalf of the Revenue that in the case of M/s.Comed Chemicals Limited - Special Civil Application No.17177/2013, the learned Settlement Commission allowed deduction under Section 80IA in re....
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....6, has been pleased to hold in similar circumstances that since disclosure revised by the assessee was substantial, the order of the Settlement Commission on this aspect accepting the additional disclosure was liable to be set aside. That the respondent-assessee has relied upon the decision in the case of CIT v. ITSE reported in (2016)75 taxmann.com 103. It is submitted that however, the fact situation available in the said reported decision is entirely different inasmuch as in the reported decision, additional disclosure was very marginal. 4.19 It is submitted by Shri M.R.Bhatt, learned Senior Advocate appearing on behalf of the Revenue that therefore, even on merits also, the order passed under Section 245D(4) of the Act deserves to be quashed and set aside. Making above submissions, it is requested to allow the present petitions. 5. Shri Mihir Joshi, learned Senior Advocate appearing on behalf of the respondent-assessee has vehemently submitted that as such,the petitioner - Commissioner has no locus to make a grievance against an order of the Settlement Commission holding that the settlement application would not be proceeded with in respect of certain assessment years.....
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....ion of the Department that the order under Section 245D(2C) of the Act can only be regarding invalidity, while in the instant case the subject order refers to validity of certain applications is untenable since an order which holds application in respect of three years to be valid, by necessary implication holds the application for the balance years as invalid and the form of expression cannot govern the substance which is as contemplated under the relevant provision. 5.3 It is further submitted by Shri Mihir Joshi, learned Senior Advocate appearing on behalf of the respondentassessee that it is obvious from the Scheme of the Act that out of the various eventualities contemplated for invalidation, if no additional income is disclosed for the year in question and no additional tax comes to be paid in respect of such year, the settlement application insofar as that year is concerned would be rendered invalid because the requirement of an application for settlement is for disclosure hitherto undisclosed income and payment of additional tax thereon. It is submitted that a conjoint reading of Section 245C(1) and Section 245C(1A) and Section 245(1D) of the Act makes it clear that the ....
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.... with has been received by the Department in some cases as admitted in the application for rectification filed by the Department. That the said orders were part of the annexures filed by the respondent in a writ petition filed before this Court being Special Civil Application No.5208/2008 as Annexure-D thereto. It is submitted that secondly, the petitioner has admittedly received a communication from the Settlement Commission of the same date i.e. 04.12.2007 under Section 245D(3) of the act calling for the report in respect of the subject application which clearly indicates in the subject that the application was in respect of 1999-2000, 2000-01, and 2004-05. This has been admitted to have been received by the petitioner. Moreover, the Settlement Commission has recorded the facts regarding the knowledge of the Department regarding the subject orders. It is therefore submitted that the petitioner had received a copy of the subject orders and in any case must be deemed to have knowledge of the same on account of the fact that the same were part of the record of the Settlement Commission that some orders in respect of the settlement applications which were of the Comed Group as a whol....
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....by the Departmental Representative. Making above submissions and relying upon the above decisions, it is requested to dismiss the present petitions. 6. In rejoinder and on the objection raised on behalf of the respondent-assessee that as there is no specific prayer challenging the order(s) under Section 245D(4), it is submitted by Shri Bhatt, learned Senior Advocate appearing on behalf of the Revenue that as such, the writ petition enumerates the specific ground relatable to the challenge. It is submitted that necessary documents/ facts are available on record. That the petitioner essentially challenges the decision making process on the part of the Settlement Commission. That in such a situation, even in absence of prayer, since all the facts are available and parties have also advanced arguments on merits of the same, this Court may entertain the said challenge. In support of his above submissions and request, Shri Bhatt, learned Senior Advocate appearing on behalf of the petitioner- Revenue has relied upon the decisions of Hon'ble Supreme Court in the case of Godrej Sara Lee Limited v. Assistant Commissioner (AA) And Another reported in (2009)14 SCC 338 (Paragraphs 9, 11, ....
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....on invalid by the Settlement Commission, the Department/ Revenue cannot be said to be aggrieved. On rejecting and/or declaring the settlement application invalid, the consequences shall be that the assessment proceedings/ proceedings initiated against the assessee shall have to be proceeded further as if the assessee has not approached the learned Settlement Commission. If the settlement application is allowed and the order is passed as per Section 245D(4) of the Act and the assessee makes payment of tax, penalty and interest as per the order passed by the Settlement Commission, in that case, the assessee may get the benefit of immunity from prosecution and penalty etc. as per Section 245H of the Act. Therefore, the object and purpose of the proceedings before the Settlement Commission is to put an end to the dispute at the instance of the assessee and the assessee may approach the Settlement Commission for settlement to avoid prosecution and penalty. On the other hand, if the settlement application is rejected and/or declared invalid, the necessary consequences of abatement of proceedings before the Settlement Commission as provided under Section 245HA shall follow. Section 245HA ....
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....ther information produced by the assessee before the Settlement Commission or the results of the inquiry held or evidence recorded by the Settlement Commission in the course of the proceedings before it, as if such material, information, inquiry and evidence had been produced before the Assessing Officer or other income-tax authority or held or recorded by him in the course of the proceedings before him. (4) For the purpose of the time-limit under sections 149, 153, 153B, 154, 155, 158BE and 231 and for the purposes of payment of interest under section 243 or 244 or, as the case may be, section 244A, for making the assessment or reassessment under sub-section (2), the period commencing on and from the date of the application to the Settlement commission under section 245C and ending with "specified date" referred to in subsection (1) shall be excluded; and where the assessee is a firm, for the purposes of the time-limit for cancellation of registration of the firm under sub-section (1) of section 186, the period aforesaid shall, likewise, be excluded." Therefore, considering the Scheme of Section 245HA and the object and purpose of proceedings before the Settlement Comm....