TaxTMI 
TaxTMI 
2021 (12) TMI 993
X X X X Extracts X X X X
X X X X Extracts X X X X
....e proceed to deal with the contentions raised before us by either side. The appellant is a company incorporated under the provisions under the Indian Companies Act during 1976 and engaged in business of electrical maintenance and contract jobs, erection of power plants etc. The appellant company has undertaken job works for several public sector undertakings throughout the country. The assessee approached the Settlement Commission on account of deficiencies in the final account which were filed and that return filed by the company did not reflect the true state of affairs, and, therefore, the application dated 31st May 2007 was filed under Section 243C of the Act. This application was allowed to be proceeded in terms of Section 245D(2A) as the appellant had filed the same on 31st May, 2007 and the additional tax and interest thereupon was paid before 31st July 2007. The Settlement Commission took up the matter for consideration and a report in terms of Rule 9 of the Settlement Commission Procedure Rules was filed on 7th February 2008 and taking into consideration of the said report the Commission proceeded to decide the matter. On going through the order passed by the Commission we....
X X X X Extracts X X X X
X X X X Extracts X X X X
....der Sub Section 2B or sub Section 3 of Section 245D and as such could not be added as income in the order passed under sub Section 4 of Section 245D. Further, it is submitted that if the commission was desirous of passing an order by settling the case under Section 245, it should have ordered for an investigation under sub Section 3 and call for a report from the commissioner in respect of the sum of Rs. 6.97 crores, should afford an opportunity to the assessee to deal with such report and make submissions and such procedure was not followed by the Commission. Further, it is submitted that the assessee's consistent case was that the said sum of Rs. 6.97 crores was a balance sheet item and was not a matter covered by the Settlement Commission in respect of which assessee had offered itself to be assessed and mere mentioning of the statement of fact about the treatment of the said Act in the revised amount filed by the assessee before the Commission did not make a matter covered by the application for settlement. Further it is submitted that the learned Writ Court ought not to have seen that the assessee had stated before the Commission that the said advances of Rs. 6.97 cr....
X X X X Extracts X X X X
X X X X Extracts X X X X
....earned standing counsel appearing for the respondent has drawn our attention to the statement of fact as recorded in the Settlement application dated 31st May, 2007 filed under Section 245(C) of the Act. Further for completion of fact the learned standing Counsel had referred to the report submitted under Rule 9 dated 7th February, 2008 and the findings recorded by the Commission and contended that learned Writ Court after taking note of the fact that the Commission had considered the materials as well as the report and rendered a finding, rightly dismissing the writ petition finding that there is nothing to be interfered by a Writ Court. With the aforestated submission learned standing counsel sought to sustain the order passed in the writ petition. We have elaborately heard the learned Counsel for the parties, carefully considered the materials perused and referred to. First, we need to take note of the legal position of the scope of this Court under Article 226 of the Constitution to interfere with the orders passed by the Settlement Commission. This issue is no longer a res integra and one of the decisions in the case of Jyotendrasinhji Vs. S.I. Tripathi reported in [....
X X X X Extracts X X X X
X X X X Extracts X X X X
....of Section 245D(3) of the Act, the Settlement Commission may call for the records from the Principal Commissioner or Commissioner and after examination of such records, if the Settlement Commission is of the opinion that any further enquiry or investigation in the matter is necessary, it may direct the Principal Commissioner or Commissioner to make or caused to be made such further enquiry of or investigation and furnish a report on the matters covered by the application and any other matter relating to the case and the Principal Commissioner or the Commissioner shall furnish a report within a period of 90 days of the receipt of the communication from the Settlement Commissioner. In terms of the above provision the Commission is empowered to not only consider the matter which is covered by an application by directing further enquiry or investigation but also any other matter relating to the case. Thus if the commission is to venture into any other matter relating to the case or in other words a matter not covered by the application then the pre requisite is an enquiry or investigation is required to be done. Thereafter on receipt of the report, the assessee/application is entitl....
X X X X Extracts X X X X
X X X X Extracts X X X X
....vestigate the whole case through principals/beneficiaries and obtain correct picture of the business activities and interest income and factual position of assets of transparency and find out the income accurately. Further the assessing officer qualifies the communication by stating that the submission furnished is in the form of a report based on records without cross-checking or verification. Furthermore, the assessing officer states that due to lack of fairness on the part of the assessee in disclosing income, the Settlement Commissioner may reject the application. Thus by reading the said communication dated 27/30th December, 2013 it is clear that is not a report in terms of sub Section 3 of Section 245D which mandates that Commission should direct the Commissioner to submit a report which has never been done by the Commissioner. All those which we have pointed out above would go to show that the order passed by the Commissioner flows from serious illegality and irregularity calling for interference. That apart the alleged report dated 27th December, 2013 as admittedly been filed only on 15th January, 2014, the date on which the application was finally been heard by the Comm....