2021 (10) TMI 177 - HC - Income Tax

Settlement Commission order - unaccounted excess stock - Directions for verification of the Computer Server - HELD THAT - As the scope of the directions issued by the Commission for verification of the Computer Server, the Commissioner added two more paragraphs to his communication dated 11.07.2013, which were, in fact, the stand taken by the Revenue before the AO stating that the delivery challans did not contain the signature of the customers and in the absence of receipts issued by the assessee to different customers from whom they have claimed to have received the old Gold, the authenticity of the receipt of Gold from the customers is not fully verifiable. In fact, the last two paragraphs in the communication dated 11.07.2013 was precisely the stand taken by the Revenue before the Commission, which was taken note of, and the Commission, with a view to examine as to whether there has been full and true disclosure, had directed verification of the Computer Server. The findings rendered by the Commission is not a concession extended by the CIT(DR), it is in fact, accepting the verification report which was submitted. Therefore, the Department, on a wrong premise that the Settlement Commission has recorded as if a concession was given, had approached the Writ Court, which, in our view, was unnecessary, as the Commission has not recorded any concession, but taken up the matter, considered the case of the assessee as well as the Department, and settled the case based upon the increased offer made by the assessee. There is no procedural error committed by the Commission, warranting interference by the Writ Court. We make it clear that the quoted paragraph of the order of the Commission is not to be construed as a concession given by the CIT(DR), but a finding rendered by the Commission with regard to the verification of the data from the impounded Computer Server. Thus, when there is no procedural irregularity, we would not be justified in interfering with the order of the Settlement Commission, which has attained finality and given effect to. That apart, in a writ proceedings, we are not expected to re-appreciate the facts. As we are fully convinced that there is no procedural error committed by the Commission, the order of the Commission does not call for any interference. WP allowed.

Summary

Issues:
Challenge to order of Settlement Commission, Scope of interference by Writ Court, Delay in filing writ petition, Alleged concession by Department Representative, Discrepancies in excess stock computation, Verification of data from Computer Server, Procedural error by Commission, Finality of Settlement Commission's order.

Analysis:
The case involved a Writ Appeal against the order passed by the Settlement Commission, challenged by the Department. The Writ Court was to consider the correctness of the decision-making process, not the decision itself. The delay of over six months in filing the writ petition was considered significant, but the Writ Court allowed it based on the issue raised by the Department. The primary ground for the writ petition was the alleged concession by the Department Representative during settlement proceedings.

The dispute centered around discrepancies in the excess stock computation. The Department contended that no evidence justified the increase in book stock or customer gold. The assessee argued that the excess stock was due to accepting old gold from customers for remaking, not accounted for correctly. The Commission directed verification of data from the Computer Server, which confirmed the stand taken by the Revenue. The Commission's findings were not a concession but based on the verification report submitted.

The Court found no procedural error by the Commission, stating that the quoted paragraph was not a concession but a finding on the verification report. As there was no procedural irregularity and the Commission's order was final, the Court declined to interfere. The Writ Appeal was allowed, setting aside the order passed in the writ petition, which was dismissed without costs. The connected Miscellaneous Petition was closed, concluding the matter.