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Issues involved:
The petitioner asserted a right to be dishonest in his application to the Settlement Commission, seeking settlement for assessment years 1976-77 to 1986-87. The Commission rejected the application on the grounds of inadequate disclosure of income, leading to a legal challenge. Details of the Judgment: Issue 1 - Disclosure of Income: The petitioner claimed that the investment in his factory for synthetic gems was sourced from agricultural and dairy income, but the Assessing Officer found over Rs. 50 lakhs unexplained. The petitioner offered to settle by paying tax on Rs. 30 lakhs, subject to specific conditions, which the Commission rejected due to insufficient disclosure. Issue 2 - Settlement Commission's Authority: The petitioner argued that the Commission acted illegally by rejecting the application, contending that rejection should only occur for non-cooperation or complex investigations. However, the court held that full and true disclosure is a prerequisite for approaching the Commission, emphasizing that dishonest conduct cannot be continued while seeking benefits from the Commission. Issue 3 - Legal Provisions: Sections 245C(1) and 245D of the Income-tax Act mandate full and true disclosure for settlement applications. The Settlement Commission has the discretion to allow or reject applications based on the nature and circumstances of the case. In this case, the Commission's rejection was deemed valid due to the petitioner's failure to disclose adequately. Conclusion: The court upheld the Commission's decision, stating that the rejection was justified given the lack of full disclosure by the petitioner. The writ petition was dismissed, and costs were imposed. The judgment highlights the importance of honesty and compliance with legal requirements in seeking settlements before the Settlement Commission.
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