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TaxTMI 
TaxTMI 
TaxTMI 
2020 (3) TMI 636
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....ntoried at Page NO.43 to 45 of the Annexure A-9. These loose papers were found during the course of search proceedings at the residence of the assessee which contained the valuation report dated 07.10.2010 for the Financial Year 2009-10. According to the valuation report, total value of jewelery was Rs. 2,04,88,650/-. According to Mrs.Bhatt, the assessee did not disclose this valuation of the jewelery as per the valuation report seized during the course of search proceedings in the application filed before the Settlement Commission. It was, therefore, submitted that there is no true and full disclosure by the assessee. 3. Reliance was placed on the decision of the Supreme Court in the case of Ajmera Housing Corporation Vs. Commissioner of Income Tax [(2010) 326 ITR 642 (SC) dated 20th August, 2010 to submit that as there is no true and full disclosure by the assesseee, the order passed by the Settlement Commission is required to be quashed and set aside. 4. With regard to the aforesaid submission, it would be necessary to refer the findings of the Settlement Commission with regard to above issue, which is reproduced herein below:- "9.2 The Second issue pertain to the unexpla....
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..... Shankarlal Nebhumal Uttamchandani vide judgment and order dated 07.01.2020 passed in Special Civil Application No.13251 of 2019 and allied matters, which were having similar facts as in the present case, has observed and relied thus:- "6. Per contra, learned Senior Advocate Mr. S.N. Soparkar assisted by learned advocate Mr. Bandish Soparkar for the respondent assessee submitted that the facts of the present case are different than the facts before the Supreme Court in case of Ajmera Housing Corpn. (supra). Reliance was placed upon the decision of Apex Court in case of Jyotendrasinhji v. S.I. Tripathi reported in (1993) 201 ITR 611 (SC) dated 2nd April, 1993 to submit that this Court is required to consider the legality of the procedure followed by the Commission and not the validity of the order. He relied upon the following observations made by the Apex Court in the said decision : "15. It is true that the finality clause contained in Section 245-I does not and cannot bar the jurisdiction of the High Court under Article 226 or the jurisdiction of this court under Article 32 or under Article 136, as the case may be. But that does not mean that the jurisdiction of this Court ....
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....is behalf may be had to the decision of this Court in RB Shreeram Durga Prasad & Fatechand Nursing Das v. Settlement Commission (1989) 176 I.T.R. 169, which too was an appeal against the orders of the Settlement Commission. Sabyasachi Mukharji J., speaking for the Bench comprising himself and S.R. Pandian, J. observed that in such a case this Court is " concerned with the legality of procedure followed and not with the validity of the order.' The learned Judge added 'judicial review is concerned not with the decision but with the decision-making process." Reliance was placed upon the decision of the House of Lords in Chief Constable of the N.W. Police v. Evans, [1982] 1 W.L.R.1155. Thus, the appellate power under Article 136 was equated to power of judicial review, where the appeal is directed against the orders' of the Settlement Commission. For all the above reasons, we are of the opinion that the only ground upon which this Court can interfere in these appeals is that order of the Commission is contrary to the provisions of the Act and that such contravention has prejudiced the appellant The main controversy in these appeals relates to the interpretation of the settl....
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.... not profit. He would however, strenuously contend that revised declaration of on money should be enough to establish that initial disclosures made by the assessees were not full or true disclosures of such income. In this context, we had called for the letter written by the applicants making such revised offers. Copies of such letters dated 6.2.2014 written by the partners of the firm are produced on record. In such letters, it was conveyed that the applicants had filed a petition for settlement in which offered a sum of Rs. 7,75,000/at the rate of 12 per cent on peak balance of funds deployed in money lending activity. It was further stated that the applicant during the course of hearing under section 245D(4), in the spirit of settlement, agreed to further additional income of Rs. 39,12,667/which is computed on the basis stated hereinbelow: a. interest in money lending activity @ 15% p.a.; b. Amount deployed in money lending activity Rs. 50,00,000/- c. Income out of on money receipt @ 15%. 12. Similar declarations were made in the case of other applicants as well. It can thus be seen that these revised offers of tax was in the nature of spirit of settlement and cannot....
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....pply the ratio laid down by the Supreme Court in case of Ajmera Housing (supra) and to hold that the initial disclosures themselves were untrue projecting the additional disclosures for all years the assessees had sought settlement, we find the Commission committed no error in accepting them and in proceeding to pass final order on such settlement applications." 6.4) Reliance was also placed on the recent decision of this Court in case of Principal Commissioner of Income Tax, Central v. Income Tax Settlement Commission dated 22nd October, 2019 in Special Civil Application No. 9883/2019, wherein it is held as under : "50. In the above backdrop, the decision of the Supreme Court in the case of Ajmera Housing Corporation v. Commissioner of Income-tax (supra), on which reliance has been placed by the learned counsel for the petitioner would, in the opinion of this court, have no applicability to the facts of the present case, inasmuch as, in the facts of the said case, the assessee had filed application under section 245C before the Settlement Commission disclosing an amount of Rs. 1,94,33,580/- for the relevant assessment year in addition to the income declared in the return of ....
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....that in view of the aforesaid legal pronouncements and settled legal position, considering the facts of the case of the respondent before the Commission, the decision of the Apex Court in case of Ajmera Housing Corpn. (supra), cannot be made applicable to the facts of the present case. It was further submitted that the Commission is convinced by the item-wise explanation submitted by the respondent assessee in response to the income of Rs. 113 Crore suggested by the petitioner. It was therefore submitted that in view of the decision of the Apex Court in case of Jyotendrasinhji (supra), Commission is not required to give any reason, as the Commission has acted in accordance with the provisions of the Act of 1961. He further submitted that as the scope of the inquiry is very limited, no interference is required to be made in the impugned order passed by the Commission. 7. Having considered submissions made by learned counsel for the respective parties and the order passed by the Commission, only question which arises for consideration in facts of the present case is that whether additional income disclosed to the tune of Rs. 12 Crore by the respondent assessee during the course of....
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....sioner and further report shall be called from the Commissioner. The Settlement Commission can also direct the Commissioner to make further enquiry and investigations in the matter and furnish his report. Thereafter, after examining the record, Commissioner's report and such further evidence that may be laid before it or obtained by it, the Settlement Commission is required to pass an order as it thinks fit on the matter covered by the application and in every matter relating to the case not covered by the application and referred to in the report of the Commissioner under sub-section (1) or sub-section (3) of the said Section. It bears repetition that as per the scheme of the Chapter, in the first instance, the report of the Commissioner is based on the bare information furnished by the assessee against item No. 10 of the prescribed form, and the material gathered by the revenue by way of its own investigation. It is evident from the language of Section 245C(1) of the Act that the report of the Commissioner is primarily on the nature of the case and the complexities of the investigation, as the annexure filed in support of the disclosure of undisclosed income against item No. ....
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....s. In our opinion, the scheme of said Chapter is clear and admits no ambiguity. 27. It is trite law that a taxing statute is to be construed strictly. In a taxing Act one has to look merely at what is said in the relevant provision. There is no presumption as to a tax. Nothing is to be read in, nothing is to be implied. There is no room for any intendment. There is no equity about a tax. (See: Cape Brandy Syndicate Vs. Inland Revenue Commissioners (1921) 1 KB 64 and Federation of A.P. Chambers of Commerce & Industry & Ors. Vs. State of A.P. (2001) 247 ITR 36 (SC) In interpreting a taxing statute, the Court must look squarely at the words of the statute and interpret them. Considerations of hardship, injustice and equity are entirely out of place in interpreting a taxing statute. (Also see: Commissioner of Sales Tax, Uttar Pradesh Vs. The Modi Sugar Mills Ltd. AIR 1961 SC 1047. 28. As afore-stated, in the scheme of Chapter XIX-A, there is no stipulation for revision of an application filed under Section 245C(1) of the Act and thus the natural corollary is that determination of income by the Settlement Commission has necessarily to be with reference to the income disclosed in t....
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....p 259 dictum, noted in the passage extracted below :" Given that a document or transaction is genuine, the court cannot go behind it to some supposed underlying substance. This is the well-known principle of Inland Revenue Comrs v Duke of Westminster [1936] AC 1, [1935] All ER Rep 259, 19 Tax Cas 490. This is a cardinal principle but it must not be overstated or over-extended. While obliging the court to accept documents or transactions, found to be genuine, as such, it does not compel the court to look at a document or a transaction in blinkers, isolated from any context to which it properly belongs. If it can be seen that a document or transaction was intended to have effect as part of a nexus or series of transactions, or as an ingredient of a wider transaction intended as a whole, there is nothing in the doctrine to prevent it being so regarded; to do so is not to prefer form to substance, or substance to form. It is the task of the court to ascertain the legal nature of any transactions to which it is sought to attach a tax or a tax consequence and if that emerges from a series or combination of transactions, intended to operate as such, it is that series or combination whi....
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....des, the High Court has also commented that having come to the conclusion that the penalty leviable worked out to be Rs. 562.87 lakhs, the Settlement Commission had no reason for levying a token penalty of Rs. 50 lakhs, which was not even 10% of the minimum leviable penalty. Ultimately the High Court observed that : (i) since the Settlement Commission had not supplied annexure filed on 19th September, 1994, declaring additional income of Rs. 11.41 crores, due opportunity had not been given to the revenue to place its stand properly; (ii) huge amount of unexplained expenses, unexplained loans and unexplained surplus, total of which was more than Rs. 14 crores, was not taken into consideration while passing the final order and (iii) the Settlement Commission had imposed token penalty of Rs. 50 lakhs while on its own assessment leviable penalty would have been Rs. 562.87 lakhs. Further, if the amount which had not been taken into consideration while assessing the total undisclosed income was to be taken into account, the amount of leviable penalty would have been much more. In light of these facts, the High Court formed the opinion that it would be in the interest of justice to set as....