INCOME TAX ACT, 1961

Section 245D

Settlement Commission - Admissibility of application - No full and true disclosure by assessee -

CIT had challenged the order passed by the Settlement Commission under Section 245D on the ground that Commission passed the impugned order though there was no true and full disclosure by the assessee in the application for settlement filed before the Commission. CIT submitted that the report of the Commissioner under Rule 9 of the Settlement Rules was submitted before the Settlement Commission on the basis of the certain loose papers which were seized and inventoried. These loose papers were found during the course of search proceedings at the residence of the assessee which contained the valuation report. According to the valuation report, total value of jewellery was Rs. 2,04,88,650. Assessee did not disclose this valuation of the jewellery as per the valuation report seized during the course of search proceedings in the application filed before the Settlement Commission. It was, therefore, submitted that there was no true and full disclosure by the assessee. Thus, the Court was required to examine and inquire as to whether the order of Commission was contrary to any of the provisions of the Act or not. Held: Merely because assessee had disclosed additional income of Rs. 12 Crore during the course of settlement, it could not be said that Commission had not followed the procedure prescribed under the Act of 1961. When comparing the disclosure made by assessee to the tune of Rs. 11,33,02,651 in the application filed before the Settlement Commission and the grievance made by the writ-applicant with regard to the amount of Rs. 2,04,88,560, the same was very marginal as compared to the disclosure made by the assessee. Accordingly, when the assessee had agreed for addition of Rs. 1,02,44,280 to put quietus to the issue and to settle the matter, no interference was called for in the impugned order passed by the Settlement Commission.

Distinguished:Ajmera Housing Corporation v. CIT, [(2010) 326 ITR 642 (SC) dated 20-8-2010

REFERRED : PCIT v. Shankarlal Nebhumal Uttamchandani vide judgment and Order, dated 07-1-2020; CIT-I v. Income Tax Settlement Commission (2017) 390 ITR 306 (Gujarat) dated 12-7-2016; CIT v. Income Tax Settlement Commission and Anr. (2017) 244 Taxman 156 (Gujarat) dated 2-9-2016; of Principal Commissioner of Income Tax, Central v. Income Tax Settlement Commission dated 22-10-2019 in Special Civil Application No. 9883/2019

FAVOUR : In assessee's favour

A.Y. :

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