TaxTMI 
TaxTMI 
2021 (5) TMI 332
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....pondent filed an application before the Settlement Commission on 30.05.2008 under Section 245(C) of the Income Tax Act. 4. The 2nd respondent was the owner of 34.04 acres of immovable property situated at Anna Nagar, Chennai, out of which 2 acres were sold on 11.09.2002 and 32.04 acres were sold on 02.03.2006. The 2nd respondent was assessed to tax by an Assessing Officer working under the petitioner both under the Income Tax Act and Wealth Tax Act. The 2nd respondent sold 2 acres of its property in the financial year 2002-2003 and the balance 32.04 acres of property in the financial year 2005-06 for a total consideration of Rs. 4.68 crores and Rs. 206.34 crores respectively. The assessee claimed several inadmissible and unconnected expenses as deduction from the sale price, and also took the base value of the land as on 1981 at an unrealistically high figure to reduce the amount of capital gains. 5. On account of vast contradictions noticed by the Income Tax Department, the Revenue asked before the Settlement Commission that it had no jurisdiction to take up the application filed by the 2nd respondent for Settlement as there was no case pending as on the date of filing the a....
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....d after filing of the application under Section 245(C) on 30.05.2007, it is to be construed that the application initially filed was not in consonance with the requirements as contemplated under Section 245(C) of the Act as there was no true and full disclosure of income. Thus, the application itself is not entertainable by the Settlement Commission and the Settlement Commission erroneously continued the proceedings and passed an order, which is untenable. 10. With reference to the pre-amendment position and after amendment, the Hon'ble Supreme Court of India considered the same in the case of Commissioner of Income Tax Vs. Express Newspaper Limited, reported in [1994] 72 Taxman 438 (SC) is relied upon and paragraph 10 is extracted hereunder: "6. Chapter XIX-A providing for settlement of cases was introduced in the Income Tax Act, 1961 pursuant to the recommendations of the Direct Tax Inquiry Committee headed by Justice Wanchoo. It is necessary to notice a few provisions relevant herein. Section 245-A defines certain expressions occurring in the chapter. Clause (b) defines the expression "case" in the following words- "(b) 'case' means any proceeding under ....
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....(SC)] and the entertainability of the writ petition and the manner in which the application is to be admitted by the Settlement Commission and the sanctity behind the pre-requisite condition of full and true disclosure of income by the assessee are elaborately discussed in the above judgment and the relevant paragraphs extracted hereunder would throw a light on the issues. "8. Dissatisfied with the order passed by the Settlement Commission, the Commissioner challenged it by preferring a writ petition in the High Court of Bombay. Holding that the Settlement Commission had not given any finding as to whether there was full and true disclosure of the income by the assessee, by a strongly worded order, dated 28-7-2000, the High Court allowed the writ petition and set aside the order. 14. Next, it was urged by the learned Senior Counsel for the assessee that the High Court erred in entertaining the writ petition filed by the Commissioner under Article 226 of the Constitution against the order passed by the Settlement Commission because: (i) in terms of Section 245-D(1) of the Act, the order made by the Settlement Commission under subsection (4) of the said section is c....
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....he matter covered by the application. 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 v. IRC [(1921) 1 KB 64] and Federation of A.P. Chambers of Commerce & Industry v. State of A.P. [(2000) 6 SCC 550] ) 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. 28. As aforestated, in the scheme of Chapter XIX-A, there is no stipulation for revision of an application filed under Section 245-C(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 the application filed under the said section in the prescribed form. 31. We are convinced that, in the instant case, the disclosure of Rs. ....
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....f the complex nature of business by the Entrepreneurs, it is possible for such omission, commission, mistakes etc., while filing income tax returns and furnishing other particulars. Thus, the legislative intention of Section 245C is to provide an opportunity to the Assessee to settle the issues, if they found some discrepancy or commissions, omissions in respect of the disclosures made before the Assessing Officer at the first instance. Since such enabling provisions are made with good intention and to provide an opportunity to the assessee to correct the mistakes, it is to be done in the manner prescribed. Section 245(C) unambiguously stipulates that the application filed under Section 245(C) is to be disposed of in the manner provided in the very section itself. Therefore, it is an exclusive provision under the Act, wherein the procedures are also contemplated and certain terms and conditions are also stipulated for the purpose of settling the disputes. 15. Law presumes that every assessee discloses his true and full income at all times. Law mandates that an assessee must file his returns and show the income in a true and correct manner. While the law expects that an assessee ....
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....ng such full and true disclosure made by the assessee, then the Settlement Commission is empowered to go into the facts and circumstances and find out the correctness or truthfulness of the disclosure made by the assessee. Therefore, it is always a mixed question of fact and law and in order to ascertain the entertainability of the writ petition, the High Court is bound to look into the facts as well as the laws. In the absence of examining both the facts and laws, it may not be possible to form an opinion, whether the application filed under Section 245(C) of the Income Tax Act is entertainable or not? 18. Thus, let us consider the scope as well as the powers of the Settlement Commission to entertain an application under Section 245(C) of the Income Tax Act. When the Section in unambiguous terms contemplates that the application in such form and in such manner as may be prescribed containing a "full and true disclosure" alone is entertainable, then it becomes a pre-requisite condition for entertaining an application under Section 245(C). The phraseology 'full and true disclosure of his income' is contemplated in Section 245(C)(1) itself. Thus, it is for the assessee ....
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....umstances, settlements are impermissible and cannot be construed as settlement at all. 22. The very concept of settlement is depending on the mutual consensus and in the absence of element of mutual consensus between the parties, the settlement by the Settlement Commission cannot be unilateral and in such an event, Settlement Commission is usurping the powers of the Assessing Officer under other provisions of the Act. In other words, every authority under the Income Tax Act, 1961 is expected to exercise the powers as contemplated. 23. The question of exercise of excessive powers or jurisdiction would arise, if the authority made an attempt to travel beyond the scope of the provision under which, such powers are conferred to a particular authority. In the instant case, the power of the Settlement Commission is well enumerated under Section 245C and 245D of the Act. The manner in which settlement is to be arrived is also contemplated under the Act. Certain preconditions are also stipulated. Thus, the Settlement Commission cannot enter into the venture of assessment, which is the power of an Assessing Officer under Section 153A of the Act. Therefore, this Court is of an opini....