TaxTMI 
TaxTMI 
2020 (5) TMI 518
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....rned loss for A.Y.1999-2000 was issued vide intimation issued under Section 143(1) on 30.06.2000 and revision order dated 23.10.2003. Thus total refund issued was Rs. 20,61,963/- which included interest under Section 244 A. Under proviso (ii) to section 245C(1), tax and interest payable would be such tax and interest which would have been paid under the provisions of the Act had the income disclosed in the application been declared in the return of income before the Assessing Officer on the date of filing of application. The tax payable, therefore, would have been as follows: Amount in Rs. Total income as disclosed 14,96,469 Tax payable thereon: 5,23,764 TDS: 18,00,086 Refund due 12,76,322 Interest under Section 244 A 1,91,445 Total Refund due 20,61,963 Balance payable 5,94,196 Amount actually paid by the applicant 5,23,800 Amount of shortfall in tax 70,396 3. Operative portion of the impugned order reads as under:- "3. The applicant had entered into agreement with BSAL for carrying out a turn-key project for Rs. 102 Crores. For execution in the project, initially an amount of Rs. 20.14 crores was required for import of machinery from Germany.....
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...., it is seen that other amounts shows are stated to have been transferred to head office. We do not agree that amount transferred to head office by BSAL is a payment to the applicant. It is only transfer to the head office of BSAL. In any case the applicant has nothing to do with such transfer. In view of the above, we do not see any reason to make any adjustment to the offer made by the applicant on account of BSAL. 9. Next issue raised in the Rule-9 report is purchase of windmills from applicant by First Leasing Company of India Ltd. (FLCIL). The CIT in Rule-9 report has stated that FLCIL claimed to have purchased 13 windmills from the applicant for Rs. 13 Crores (In A.Yr.1997-98 which is not before the Commission). He further stated that in case of FLCIL, lease rent has been disallowed. 10. The A/R stated that the applicant had never sold any mills to FLCIL. The applicant had agreed to construct windmissls for FLCIL for which the applicant received Rs. 3.32 crores as advance. Subsepuently, the contract was cancelled and the FLCIL encashed the bank guarantee given to the applicant and recovered back the advance. Since the contract was cancelled, we do not see any reason to ma....
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.... is that the 2nd respondent had entered into dubious transactions wherein without carrying out any work the petitioner had raised invoices on Bellary Steel and Alloys Ltd. (BASL)and had received payments but had suppressed the taxable income by raising invoices for fictitious supply and services to write of such payment as expenditure during the assessment years 1998-1999 and 1999 -2000. 6. Since assessment orders were passed which called upon the 2ndthe 2nd respondent to pay differential tax, the 2nd respondent filed application to settle the case under the provisions of the Income Tax Act, 1961 before the 1st respondent Income Tax Settlement Commission by not correctly declaring the tax liability. 7. According to the petitioner, despite the petitioner filing of a report on 12.10.2005 under Rule 6 and 9 of the Income-tax Settlement Commission (Procedure) Rules, 1997 ,the 1st respondent proceeded to admit the case of the 2nd respondent contrary to section 245D Income Tax Act, 1961 after its amendment by Finance Act, 2007. 8. According to the petitioner the 1st respondent ought not to have proceeded with the aforesaid application filed by the 2nd respondent in as much as the 2nd ....
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.... and has concluded that the 2nd respondent was eligible for a refund of Rs. 2,08,256 /- and therefore alleged shortfall in payment of Rs. 70,396/- in payment of admitted tax liability on the additional amount cannot be countenanced. 15. It is therefore submitted that the impugned order was neither irregular nor without jurisdiction as the 2nd respondent had paid the admitted tax liability on 23.7.2007 which was much before the cut off date as per the amended Section 245D of the Income Tax Act, 1961 in the year 2007. 16. 2nd respondent further submits that the present writ petition is nothing but an abuse of court proceedings in as much as the petitioner is re agitating the issues on merits and that same is impermissible under article 226 of the Constitution of India as this court is not sitting as an appellate court. 17. It is submitted that this court is not really concerned with the decision of the 1st respondent but with the decision making process adopted by the 1st respondent and since there is no error in the decision-making process, there is no scope for interference. It is therefore the present writ petition is liable to be dismissed with cost. 18. It is further submitt....
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....additional amount of income-tax payable on the income disclosed in the application and shall furnish proof of such payment to the Settlement Commission. 25. However, after amendment, Sub-clause (ii) to sub-section (2A) was substituted. An application filed under sub-section (1) of section 245C before the 1st day of June, 2007shall be deemed to have been allowed to be proceeded with if the additional tax on the income disclosed in such application and the interest was paid on or before the 31st day of July, 2007 if an order under the provisions of subsection (1) of the said section as it stood prior to their amendment by the Finance Act, 2007 was not made before the 1st day of June, 2007. 26. Since no order of admission was passed prior to the aforesaid date, the application shall be deemed to have been admitted if the an applicant pays the additional amount of tax on the additional amount admitted in the application before 31st day of July, 2007. In the present case, there is payment of additional amount of tax before 31st 27. Therefore, the 1st respondent Settlement Commission had jurisdiction to proceed further with the application filed by the 2nd respondent under Sect....
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....t further submitted that it encountered difficulty in sourcing of materials required for additional work. Therefore, the 2nd respondent agreed with BSAL for latter to directly identify the suppliers of materials for the additional work. 36. At the same time in paragraph 7 of the application, the 2nd respondent has stated that up to 31.3.1999, the said BSAL had transferred an amount of Rs. 35.77 crores through banking channels and these amounts were paid for contractual payments. 37. According to the 2nd respondent, the value of such additional materials were agreed, identified by BSAL which amounted to Rs. 43.05 crores. Since procurements were directly made by BSAL, the expenses aggregating to the aforesaid sum of Rs. 43.05 crores were debited towards such purchases and credit was given in the account of BSAL. 38. The 2nd respondent has also stated that as against the total invoice value of Rs. 72.43 crores, a sum of Rs. 21.05 represents the value of machineries imported directly by BSAL which was paid by BSAL directly and a Rs. 22.05 crores was invoiced fictitious transactions totaling to Rs. 44.05 crores out of The Aforesaid Amount of Rs. 72.43 Crores. 39.Thus, there are not ....