AI Drafter 
TaxTMI 
TaxTMI 
2017 (9) TMI 1740
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....d 27.03.2008 Annexure P-1. 2. The brief facts relevant for adjudication of the present dispute are that a search and seizure proceeding under Section 132 (1) of the Income-tax Act was conducted on the business as well as residential premises of respondent no.2 in each of the writ petitions. During the course of search proceedings, certain incriminating documents, book of accounts and other materials were found and huge unexplained deposits/investments running into several crores were detected. For the purpose of assessment of the undisclosed income, notices under Section 153 BC was issued on 22.11.2000. After sometime, the assessee filed an application before the Settlement Commission on 05.07.2002. The proceedings went on for a considerable period of time. Meanwhile, the Finance Act, 2007 came into force and the newly added Section 245 HA was introduced which envisages the provision of abatement of proceeding before Settlement Commission. In view of the amended provision, if the settlement application was not disposed of by 31st of March, 2008 under the provisions of Section 245 HA of the Act, all such proceedings before the Settlement Commission would have stood abated and ....
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....xamine the records and investigate the case for proper settlement as there is a direction by the High Court, they are inclined to pass an order under Section 245 D(4) of the Income Tax Act. This observation itself is an indication of there being total non application of mind as also the impugned order to have been passed without any sufficient basis rather only on the submissions put forth by respondent no.2 assessee. This procedure for disposing of the settlement proceedings is illegal and per se in direct contravention to the statutory provisions which were mandatorily required to be followed while disposing of settlement proceedings. Once when the Settlement Commission was of the view that it was not practicable for the Commission to examine the record and investigate the case, it ought to have deferred the proceedings or should have brought to the notice of the department for approaching the High Court for a suitable direction. The High Court never intended to direct the Commission that the proceeding be concluded ignoring the statutory provisions. It was thus prayed for quashment of Annexure P-1 and for remitting the matter back to the Settlement Commission for deciding afresh....
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....o submit their report before the Settlement Commission within the prescribed time limit, as per the proviso to Section 245D as amended in 2007, it could proceed to pass an order under Sub Section 4 without such report. In the instant case, though the application for settlement was filed in July 2002 but till March 2008 the Income Tax Department for reasons best known to them did not file their reply/objection/report. Thus, the impugned order cannot be faulted with and the petitions deserve to be rejected. 8. Having considered the contentions put forth by the counsel appearing on either side and on perusal of the record, the issues which require to be adjudicated upon are; i) Whether the writ petitions filed by the petitioners before this High Court are tenable or not or it should have been filed before the High Court of Kolkata. ii) Whether the impugned order passed by the Settlement Commissioner particularly on the basis of the observation in the impugned order of it being practicably not possible to scrutinize the documents on record, can be said to be proper, legal and justified. 9. So far as the first issue of jurisdiction is concerned, undisputedly respondent no.2 in eac....
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....ace where the Settlement Commission locates which in the instant case is Kolkata. Thus, the petitioners had an option of choosing the forum between the High Court of Kolkata and the High Court of Chhattisgarh for challenging the order passed by the Settlement Commission. 12. So far as the objection of the respondent no.2 that the decision of the Settlement Commission was pursuant to a direction given by the High Court of Kolkata is concerned, the same by itself cannot be considered to be a ground and reason to challenge the subsequent development before the same High Court as what is under challenge is the veracity of an order passed invoking the provisions of Section 245 D(4). What is also pertinent to take note is the fact that the writ petition which was filed before the Kolkata High Court by the assessees got dismissed. Since the impugned order under Section 245 D (4) is an independent order passed in exercise of its statutory powers conferred upon the Settlement Commission and where the challenge is on the merits of the order, the Income Tax Department had an option of either approaching the Kolkata High Court or they could have filed it in the High Court of Chhattisgarh wh....
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....ort declare the application in question as invalid and shall send copy of such order to the applicant and to the Commissioner. Sub Section (2D) further envisages a situation where the application which has not been declared invalid and also the application which has been allowed to be further proceeded, the Settlement Commission may call for the records from the Commissioner and after examination of such records may proceed further and pass an appropriate order. Section 245 D (4) provides the method and procedure for the Settlement Commission to act upon after the report of the Commissioner is submitted before it. 16. Keeping all these provisions in mind when we look at the impugned order it clearly reflects that the Settlement Commission perhaps has shown a bit of haste in concluding the proceeding. Paragraph-4 of the impugned order which stands reproduced in the preceding paragraph clearly shows that while passing the impugned order the Settlement Commission had not examined the records nor had it investigated the case but only because there was a direction given by the High Court of Kolkata it proceeded to decide the matter without examination of the records and investigating....