TaxTMI 
TaxTMI 
2021 (5) TMI 373
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....mission entertained the application in violation of the provisions of the Act and further, passed an order, which is not in consonance with the powers conferred to the Settlement Commission under the Income Tax Act. 3. The learned Senior standing counsel appearing on behalf of the petitioner Income Tax Department made a submission that the 2nd respondent/M/s.Sri Krishna Tiles and Potteries (Madras) Private Limited 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 the 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. It had neither filed a return under the Wealth Tax Act nor paid any tax under the Wealth Tax Act in respect of the land, for the period prior to its sale. Hence, a notice under Section 17 of the Wealth Tax Act was issued for the assessm....
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....d in a routine manner and except on exceptional circumstances. It is contended that the Court cannot substitute its views in the place of the first respondent/Settlement Commission, particularly on the question of full and true disclosure and complexity of the case. It is contended that the petitioner has never stated about the complexity involved in the present case and the question of law warranting interference of the Hon'ble High Court under Article 226 of the Constitution of India. Thus, the writ petition is liable to be dismissed on the ground of maintainability. 7. The second respondent states that he is the owner of 34.04 acres of immovable property situated at Anna Nagar and further admitted that the 2nd respondent sold two acres of the property during the financial year 2002-03 and the remaining 32.04 acres of land was sold during the financial year 2005-06 for Rs. 206.34 crores. The property was sold after obtaining prior permission for sale under Section 281 of the Income Tax Act from the Department. On a notice being served under Section 17 of the Wealth Tax Act for the Assessment years 1999-2000 to 2005-06, the 2nd respondent has filed return of wealth, taking in....
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....ed with an adjudication and based on the adjudication, the order was passed on merits and therefore, the writ petition is liable to be dismissed. 10. The learned counsel for the petitioner mainly contended that in the eventuality of identifying the fact that the assessee has not disclosed true and full income in the application filed under Section 245(C) of the Act, jurisdiction of the Settlement Commission stands ousted and they are estopped from entertaining any such application. Even after admission of the application at any stage of the proceedings on account of the objections raised or on identification of facts, if the Settlement Commission is able to identify that there was no true and full disclosure of income or any additional income has been submitted by way of filing an additional statement etc., then it is to be construed that the application filed at the initial stage under Section 245(C) of the Act was not with full and true disclosure and accordingly, it is liable to be dismissed in limini. Even regarding the point of maintainability raised by the respondent/assessee, through the learned Senior counsel that facts recorded by the Settlement Commission cannot be dispu....
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....ent 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 conclusive as to the matters stated therein and no matter covered by such order can be reopened in any proceedings under the Act or under any other law for the time being in force; and (ii) in the absence of any illegality in the procedure followed by the Settlement Commission, the power of judicial review could not be exercised by the High Court to interfere with the findings of fact recorded by the Settlement Commission. To buttress his proposition that judicial review is concerned only with the decision-making process and not with the final decision, learned counsel ....
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....rpret 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. 11.41 crores as additional undisclosed income in the revised annexure, filed on 19-9-1994 alone was sufficient to establish that the application made by the assessee on 30-9-1993 under Section 245-C(1) of the Act could not be entertained as it did not contain a "true and full" disclosure of their undisclosed income and "the manner" in which such income had been derived. However, we say nothing more on this aspect of the matter as the Commissioner, for reasons best known to him, has chosen not to challenge this part of the impugned order." 12. The learned Senior standing counsel appearing on behalf of the petitioner solicited....
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....he Assessing officer's report have completely been omitted by the assessee from the computation of net wealth in the settlement application. Since the flats were not held by the assessee as stock in trade, the value of the flats is includable in the net wealth. The market value of the flats on hand has been worked out by the AO on the basis of sales near the respective valuation dates and the value is given in page 8 of AO's report. The applicant has no justification for omitting the market value of the said flats from the net wealth and this fact alone militates against one of the prerequisite of the Settlement Application (i.e.) full and true disclosure. It is requested that in the order under Section 22D(4), the market value of the flats as worked out by the department may be included in the assessee's net wealth on the various valuation dates." 16. Without considering the additional wealth offered by the second respondent, which has been disclosed before the Assessing Officer, the Settlement Commission proceeded with the Settlement in violation of the provisions of the Income Tax Act and beyond the jurisdiction of the Settlement Commission. The revised statement of....
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....s. 206.34 crores on 02.03.2008 to M/s.Ozone Projects Private Limited. In order to determine the market value for W.T.Purposes, the value of the property on various valuation dates was the sole consideration. Since the value of the property in question is subjected to various litigations, it has to be suitably adjusted as the litigations would depress the value of the property on different valuation dates. In para 5,6,7,8 and 9 of the order Under Section 22D(1) the A.R. pointed out various impediments which had the result of depressing the value of the property on various dates. In para 11 and 12 of the 22D(1) order the arguments and objections of the CIT(DR) were narrated. In para 13 of the said order, the rejoinder of the A.R. Is given. Other issues such as validity of the application were discussed and dealt with. In para 15 of the said order, the confidential part heard by the Settlement Commission was discussed and in para 16,17 and 18 the objections of the CIT(DR) were dealt with. Also in para 18 the Commission came to a prima facie view that enhancement of valuation for the A.Y.2004-05 at Rs. 25 crores and Rs. 35 crores for A.Y.2005-06 over and above the additional wealth d....