1994 (6) TMI 192 - Commission - Income Tax

Summary

Issues Involved:
1. Whether the application for settlement u/s 245C(1) of the Income-tax Act, 1961, must contain some disclosure of additional income for each and every assessment year comprised in the petition when the petition is for several assessment years.

Summary:
Issue: Disclosure of Additional Income for Each Assessment Year
The Special Bench was constituted to address whether an application for settlement u/s 245C(1) must disclose additional income for each assessment year included in the petition. The cases of Airteck Pvt. Ltd., Hari Chand, and Messrs. Damani Bros. were considered.

Arguments by Shri C. S. Aggarwal:
- Section 245C(1) only requires disclosure of income in respect of a case, not necessarily for each assessment year.
- The term "case" defined in section 245A(b) includes proceedings for multiple years.
- Proviso (b) to section 245C(1) refers to "income disclosed in the application," indicating no need for year-wise disclosure.
- Income can include losses, and the aggregate tax payable for the years with additional positive income should exceed Rs. 50,000.

Arguments by Dr. V. Balasubramanian (Department):
- Each assessment year is self-contained; thus, applications should be year-specific.
- Proviso (a) to section 245C(1) mentions "the return of income," implying a singular year focus.
- The additional tax payable should exceed Rs. 50,000 for each year, not in aggregate.
- The provisions of sections 245C(1A) to (1D) are procedural and do not alter the substantive requirement of section 245C(1).

Arguments by Shri D. M. Harish:
- Section 245C(1) requires disclosure of income in the application as a whole, not for each year.
- Provisions of sections 245C(1B) and 245C(1D) support the view that applications can cover multiple years with disclosures for one or more years.
- The form for application (Form No. 34B) allows for a single application for multiple years.

Judgment:
- The Special Bench concluded that a single application for settlement can cover multiple assessment years.
- The application must disclose income not previously disclosed to the Assessing Officer.
- The additional tax payable on the disclosed income must exceed Rs. 50,000 for the application as a whole.
- There is no requirement for disclosure of additional income for each assessment year included in the application.

Clarification:
- The term "income" in section 245C(1) refers to positive income, not losses. The application must disclose additional positive income for the years taken together.

Disposition:
- The applications in the cases of Airteck Pvt. Ltd., Hari Chand, and Messrs. Damani Bros. were sent back to their respective benches for appropriate orders u/s 245D(1).