2018 (12) TMI 1348 - HC - Income Tax

Settlement Application - Held that - The Writ Petition challenging the order of the Commission is pending for hearing. After hearing Advocates of both sides, Court would choose its option whether to admit the Petition or not, and if admitted, with or without interim relief. For the time being, we are concerned only with the question of granting or refusing the request for amending the Petition. We, therefore, confine our observations to this issue. As noted, the Commission has rejected the Petitioner s request for Settlement of the cases for the Assessment Years 1998-99 to 2014-15. The notice issued by the Competent Authority under the Act of 2015, is an independent issue and a fresh proceeding instituted against the Petitioner under the said Act whether the order of the Commission and the ultimate outcome of the Petition, would cast a shadow on the proceedings instituted under the said Act, is neither possible nor necessary for us to pronounce at this stage. We are, however, make it clear that the said notice dated 22nd November, 2017 is an independent cause of action and is based on the materials mentioned in the notice itself. It is always open for the Petitioner to take recourse of legal options in connection with the said notice. However, in the present Petition, we are not inclined to allow the amendment by bringing on record such additional developments and the interim prayer against the notice dated 22nd November, 2017. The Petition, as noted above, would proceed after hearing Advocates on both sides, at which stage, the Court would also examine whether interim protection should be granted to the Petitioner or not.

Summary

Issues:
1. Amendment of the petition by adding averments and prayer clauses.
2. Challenge to the dismissal of Settlement Application by the Commission.
3. Notice issued under the Black Money Act regarding undisclosed foreign income and assets.
4. Request for stay on the notice pending adjudication of the Writ Petition.
5. Argument for and against the proposed amendment.
6. Independence of the notice under the Black Money Act from the Settlement proceedings.
7. Decision on granting or refusing the request for amending the petition.

Analysis:
The Chamber Summons filed sought to amend the Petition by adding averments and prayer clauses, which was strongly opposed by the Respondents' counsel. The Petitioner, an individual, had previously moved a Settlement Application before the Commission for the Assessment Years 2008-09 to 2014-15, which was dismissed due to lack of full disclosures of income. This dismissal was challenged in the main Petition. Subsequently, the Petitioner received a notice under the Black Money Act regarding undisclosed foreign income and assets, specifically mentioning undisclosed bank accounts in a Swiss Bank. The proposed amendment aimed to bring these developments on record and requested a stay on the notice pending the Writ Petition's adjudication.

The Petitioner's counsel argued that allowing the amendment would prevent prejudice and avoid multiplicity of proceedings, emphasizing the challenge to the Commission's order. Conversely, the Respondents' counsel contended that the notice under the Black Money Act was independent, based on separate material, and unrelated to the original cause of action. The Court deliberated on whether to admit the Petition, with or without interim relief, focusing solely on the amendment request at that stage.

The Court noted the Commission's rejection of the Settlement request and emphasized the independence of the notice under the Black Money Act as a fresh proceeding against the Petitioner. It clarified that the outcome of the Petition challenging the Commission's order would not impact the proceedings under the Act. Ultimately, the Court ruled against granting the requested amendment, stating that the notice was an independent cause of action based on its own materials. The Chamber Summons was disposed of, leaving the Petitioner to explore legal options concerning the notice separately as the main Petition progressed.