TaxTMI 
TaxTMI 
2021 (2) TMI 106
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....idavit directed to be filed and the order imposing penalty was stayed; it was however clarified that the proceedings before the Settlement Commission shall go on, uninfluenced by the pendency of this petition. 3. No counter affidavit has been filed inspite of two opportunities. The counsel for the respondent states that a counter affidavit has been filed but has not come on record. The counsel for the petitioner states that he has received advance copy of the same. The counsel for the respondent draws attention to CM No.34968/2020 filed by the respondent, for vacation of the stay granted on 10th January, 2020 and expresses urgency, contending that the petitioner has obtained stay of the order imposing penalty, by misrepresenting / suppressing facts. We have however enquired from the counsel for the petitioner, whether not the hearing on the application for vacation of stay as well as on the main petition itself, would be substantially similar. The counsel for the petitioner then states that the writ petition itself can be heard today, without the counter affidavit coming on record in as much as the outcome of the writ petition depends upon the interpretation of the statutory pro....
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....n, on 1st November, 2019 approached the Income Tax Settlement Commission for assessment years 2012-13 and 2013-14 to 2019-20; (j) the petitioner, in accordance with the provisions of the Act, on 1st November, 2019 itself also informed the Assessing Officer about the filing of the application before the Settlement Commission; (k) the petitioner, though not required to, by way of abundant caution, vide e-mail dated 4th November, 2019, at 9:46 AM, also informed the respondent of having approached the Settlement Commission; (l) the respondent however proceeded to thereafter pass the impugned penalty order dated 4th November, 2019 and communicated the same to the petitioner from the same e-mail ID, at around 10:30 AM i.e. immediately on receipt of petitioner's e-mail; (m) vide the impugned penalty order, penalty under Section 271DA for the assessment years 201819 and 2019-20 has been imposed on the petitioner, ignoring the fact that the petitioner had already preferred an application before the Settlement Commission; (n) the respondent, vide e-mail dated 7th November, 2019 informed the petitioner that the Settlement Commission assumes jurisdiction only after it allows the application to....
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.... which are vested "in an Income Tax Authority under this Act" and in Sub-Section (2) thereof inter alia provides: "(2) Where an application made under section 245C has been allowed to be proceeded with under section 245D, the Settlement Commission shall, until an order is passed under sub-section (4) of section 245D, have, subject to the provisions of sub-section (3) of that section, exclusive jurisdiction to exercise the powers and perform the functions of an income tax authority under this Act in relation to the case: Provided that where an application has been made under Section 245C on or after the 1st day of June, 2007, the Settlement Commission shall have such exclusive jurisdiction from the date on which application was made." Section 245H titled "Power of Settlement Commission to grant immunity from prosecution and penalty" empowers the Settlement Commission to, if satisfied that the applicant has co-operated with the Settlement Commission in the proceedings and has made a full and true disclosure of his income and the manner in which such income has been derived, "grant to such person, subject to such conditions as it may think fit to impose for ....
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....he said definition to contend that the same would not cover a violation of Section 269ST of the Act. The contention of the counsel for the respondent is that the Settlement Commission is concerned only with assessment of undisclosed income and penalties and prosecutions with respect thereto and the penalty under Section 269ST of the Act is independent thereof. On enquiry, whether even in the case of disclosed income, the provisions of Section 269ST of the Act would be attracted, the counsel for the respondent answers in the affirmative and on further enquiry whether the said aspect can be referred to the Settlement Commission, if there is no case of undisclosed income, the counsel for the respondent replies in the negative. 9. We may at this stage record that Section 269ST prohibits receiving an amount of Rs. 2 lacs or more, in aggregate from a person in a day or in respect of a single transaction or in respect of transactions relating to one event or occasion, from a person, otherwise than by an account payee cheque or an account payee bank draft or use of electronic clearing system to a bank account. We may further record that the notice dated 30th September, 2019 was issued, ....
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....n its application to the Settlement Commission has brought only the case pursuant to notices under Section 153A admittedly issued to it, but the powers of the Settlement Commission under Section 245D(4) to pass such order as it thinks fit are not confined to matters covered by the application but also extend to "any other matter relating to the case not covered by the application, but referred to in the report of the Principal Commissioner or Commissioner" presented to the Settlement Commission under Section 245D(3) of the Act. B. We have thus enquired from the counsels, whether the Principal Commissioner / Commissioner, in the present case, in response to the application of the petitioner to the Settlement Commission, has submitted any report and if so, whether in the said report the aforesaid aspect of violation of Section 269ST of the Act has been reported; if it is so, the Settlement Commission would have jurisdiction to pass orders with respect to violation alleged of Section 269ST also. However neither counsel has instructions on the said aspect. C. It is not deemed necessary to adjourn the hearing to enable counsels to take instructions on the aforesaid aspect, because....
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....Section 245F and Section 245H are with respect to assessment of undisclosed income only, but (i) Section 245F vests exclusive jurisdiction in the Settlement Commission, to exercise the powers and perform the functions "of an Income Tax Authority under this Act in relation to the case"; and, (ii) Section 245H vests the Settlement Commission with the power to grant immunity from "imposition of any penalty under this Act with respect to the case covered by the settlement". The words "of an Income Tax Authority under this Act in relation to the case" and "immunity from; imposition of any penalty under this Act with respect to the case covered by the settlement" are without any limitation of imposition of penalty and immunity with respect thereto only in the matter of undisclosed income and in our view would cover also penalties under other provisions of the Act, detection whereof has the same origin as the origin of undisclosed income. H. Not only so, the words "in relation to the case" and "with respect to the case" used in the aforesaid provisions, are words of wide amplitude and which, in our opinion, in the facts of the present case may allow the Settlement Commission to, notwit....
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....5) 12 SCC 558 and Maxopp Investment Ltd. Vs. Commissioner of Income Tax (2018) 15 SCC 523. 13. The stand of the respondent in its e-mail dated 7th November, 2019 that the Settlement Commission assumes jurisdiction from the day when an order under Section 245D(1) is made when the application under Section 245C(1) is ordered to be proceeded with further, and which in the present case was on 8th November, 2019 and before the said date the Settlement Commission did not have exclusive jurisdiction and the respondent remained entitled to impose penalty, was / is not only contrary to the provisions of the proviso to Section 245F(2) but also contrary to the law laid down by this Court in Commissioner of Income Tax Vs. Income Tax Settlement Commission (2014) 360 ITR 407 (Delhi). 14. Once it is so, the Settlement Commission, under the proviso to Section 245F(2), with effect from 1st November, 2019 when the petitioner admittedly made the application under Section 245C before it, had the exclusive jurisdiction to deal with the matter relating to violation of Section 269ST of the Act also and the respondent, on 4th November, 2019 did not have the jurisdiction to impose penalty for violati....