TaxTMI 
TaxTMI 
2025 (6) TMI 1330
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....sidential premises, business premises and in the bank where assessee had locker facility. The search revealed suppression of substantial professional fee receipts, which did not form part of books of accounts/professional income for Assessments Years from 2006-07 to 2011- 12. Search also revealed substantial investments in jewellery, some of which were purchased without bills and not accounted for. The total value of gold and diamond jewellery found was Rs. 14,74,99,880/-, of which jewellery valued at Rs. 7,27,78,150/- was seized. Cash of Rs. 1.80 crores was also seized. 3. Assessee, thereafter, filed a Settlement Application on 19.02.2011 before the ITSC for AY 2006-07 to AY 2012-13, which was allowed to be proceeded with vide order dated 27.02.2013 under Section 245D(1) of the Act. By an order dated 31.03.2013, the ITSC held the application not to be invalid under Section 245D(2C) of the Act. Subsequently, after hearing the parties and calling for submissions from the Revenue, the Settlement Application was disposed and an order dated 05.08.2013 under Section 245D(4) of the Act was passed. It is this order which was challenged by the Revenue in the writ petition and it is this o....
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....ication to proceed further. The Department furnished the Rule 9 report in No.2715/CIT(Central-2)/ Settlement Commission/2012-13 dated 15.05.2013 before the 1st respondent in terms of Rule 9 Sub-rule (1) of Income Tax Settlement Commercial (Procedure) Rules 1997. In terms of Rule 9 Sub-rule (3), appellant was furnished with a copy of Rule 9 report of the Department and appellant/assessee filed their detailed comments in respect of Rule 9 report of department vide submissions dated 19.06.2013 to which Department filed their rejoinder dated 28.06.2013. The Department preferred verification on certain aspects through their letter in F.No.996/ TN/CIT(DR)/2012-13 and appellant duly filed their detailed comments and replies to the verification report vide their reply dated 30.07.2013. The Commission in terms of Section 245D(4) of the Act heard appellant/assessee and CIT (DR) of the Department finally on 31.07.2013. The Commission, in terms of Section 245D(4) of the Act, vide order dated 05.08.2013, provided the terms of settlement in terms of Section 245D(6) of the Act. f) The fact that the Settlement Commission was satisfied with true and full disclosure is evident by the fact that the....
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....ssessee nor an issue in the settlement application filed before the Commission. Hence, the expenses at 7% of undisclosed suppressed receipt of Rs. 35.30 crores would be only Rs. 2,47,14,448/- and not Rs. 7,96,87,335/- as held by Commission. 6. The submissions of Mr.Srinivas can be disposed by observing that the learned Single Judge in the impugned judgment has, after considering all these submissions of Mr.Srinivas, proceeded on the basis that the assessee had not made true and full disclosure as required under the provisions of the Act. In our view, that was not even the case of the Department that there was no true and full disclosure because, if there was no true and full disclosure, the Commission itself would not have proceeded beyond the stage of Section 245D(2C) of the Act. The Commission was satisfied that assessee has made a true and full disclosure. On this ground alone, the impugned order requires to be quashed and set aside. 7. Moreover, if what Mr.Srinivas submitted as noted above has to be accepted, then nothing prevented the department to go back to ITSC and bring to their notice the error, because it is a pure calculation error by the ITSC as submitted by Mr.Srini....
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....as to be borne in mind. Paragraphs 24 to 31 of the judgment in Commissioner of Income-tax, Central-II (supra) read as under: "24. As held in Jyotendrasinhji (supra), even if the interpretation placed by the ITSC on the documents seized is not correct, it would not be a ground for interference since a wrong interpretation of documents cannot be said to be a violation of the provisions of the Act. Further, as held in Kotak Mahindra Bank Ltd. (supra) sufficiency of the material and particulars placed before the Commission based on which the Commission proceeded to pass its orders are beyond the scope of judicial review. The High Court should not also scrutinize order of the ITSC as an appellate court because as held in Brij Lal And Others (supra), the orders of the Settlement Commission under Section 245D(4) of the Act is different from the nature of orders under Section 143(1), 143(3) and 144 of the Act. 25. Mr. Suresh Kumar relied on the judgment of the Bombay High Court in Harish Textile Engrs. Ltd. vs. Deputy Commissioner of Income Tax, Special Range-18 to buttress his submission that the ITSC should have ordered enquiry on the expenditure incurred by assessee. Said judgment i....
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.... N. Krishnan (supra), it is in the nature of statutory arbitration to which a person may submit himself voluntarily and the scope of interference is much more restricted than the power of the court to interfere with an arbitration award. 29. Unsettling reasoned orders of the Settlement Commission, as noted by the Hon'ble Apex Court in Kotak Mahindra Bank Ltd. (supra), may erode the confidence of bona fide assessee, thereby leading to multiplicity of litigation where settlement is possible and this larger picture has to be borne in mind. 30. Moreover, we also should note that Section 245B(3) of the Act provides that Chairman, Vice Chairman and other members of the Settlement Commission shall be appointed by the Central Government from amongst persons of integrity and outstanding ability, having special knowledge of, and, experience in, problems relating to direct taxes and business accounts. Therefore, the members of the ITSC have been appointed because of their integrity and outstanding ability and for the special knowledge and experience in problems relating to direct taxes and business accounts. It is rather unfortunate that the Central Government questions the findings of th....