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TMI Blog2016 (2) TMI 273X X X X Extracts X X X X X X X X Extracts X X X X ..... & 2745-2750 of 2015 (T-IT) - - - Dated:- 18-1-2016 - ANAND BYRAREDDY, J For the Petitioner : Shri K.V.Aravind, Adv. For the Respondent : Shri A. Shankar, Advocate for Shri S. Sukumar, Adv. and Shri Krishna S Dixit, Additional Solicitor General JUDGEMENT The facts leading up to these petitions are as follows:- The respondent is said to be an assessee within the jurisdiction of the petitioner. A search is said to have been conducted at the business premises of the respondent and the residential premises of its Directors, by the Income Tax Department, in exercise of power under Section 132 of the Income Tax Act, 1961 (Hereinafter referred to as the IT Act', for brevity) as on 16.2.2012. It transpires that incriminating material regarding undisclosed income was found and seized. The assessing officer is said to have initiated proceedings under Section 153A of the IT Act, for the Assessment years 2006 -07 to 2011-12, by a notice dated 7.12.2012. The respondent is said to have filed a return of income pursuant thereto. And further, during the pendency of the said proceedings, the assessee is said to have filed an application under Section 245C of the IT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd without jurisdiction. It is contended that the total short fall in the declaration made by the respondent in the application before the Settlement Commission with reference to the seized material available with the Assessing Officer is ₹ 105,13,76,527/-. The short fall in declaration would clearly demonstrate that the declaration in the application before the Settlement Commission is not a true and full disclosure of the additional income. Reliance is placed on the following authorities by the learned counsel for the petitioner in seeking that the petition be allowed. 1. Commissioner of Income Tax vs. Income Tax Settlement Commission, (2014) 365 ITR 0087 (Bom); 2. Commissioner of Income Tax (Central) vs. Income Tax Settlement Commission (ITSC), (2014) 361 ITR 068 (Bom); 3. Ajmera Housing Corporation and another vs. Commissioner of Income Tax; (2010) 326 ITR 3. On the other hand, the learned counsel Shri A.Shankar appearing for respondent no.1 would point out that Section 245D(2C) enjoins the Settlement Commission to declare an application as invalid on the basis of the report of the Commissioner. It does not contemplate rejection of the applicati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2. It is clear that disclosure of full and true particulars of undisclosed income and the manner in which such income had been derived are the prerequisites for a valid application under Section 245C(1) of the Act. Additionally, the amount of income tax payable on such undisclosed income is to be computed and mentioned in the application. It needs little emphasis that Section 245C(1) of the Act mandates full and true disclosure of the particulars of undisclosed income and the manner in which such income was derived and, therefore, unless the Settlement Commission records its satisfaction on this aspect, it will not have the jurisdiction to pass any order on the matter covered by the application. The Settlement Commission has examined the application and has opined thus in its order at Annexure -B to the petition: DECISION 10. We have carefully considered the submissions of the learned A.R and the facts available on record. It cannot prima facie be inferred at this stage that the disclosure made in the Settlement Application is not full and true. So far as other conditions are concerned, they stand satisfied by the Applicant. We, therefore, allow the Settlemen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or sub-section (3) of the said section. It bears repetition that as per the scheme of the Chapter, in the first instance, the report of the CIT is based on the bare information furnished by the assessee against item No.10 of the prescribed form, and the material gathered by the Revenue by way of its own investigation . It is evident from the language of section 245C(1) of the Act that the report of the CIT is primarily on the nature of the case and the complexities of the investigation, as the annexure filed in support of the disclosure of undisclosed income against item No.11 of the form and the manner in which such income had been derived are treated as confidential and are not supplied to the CIT. It is only after the Settlement Commission has decided to proceed with the application that a copy of the annexure to the said application and other statements and documents accompanying such annexure, containing the aforesaid information are required to be furnished to the CIT. In our opinion even when the Settlement Commission decides to proceed with the application, it will not be denuded of its power to examine as to whether in his application under Section 245C(1) of the Act, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lained by the Board of Direct Taxes vide Circular no.621, dated 21.12.1991, thus: Simplification of procedure subsequent to the receipt of an application by the Settlement Commission 65. Under the existing provisions of sub-section (1) of section 245D of the Income-tax Act, the Settlement Commission, on receipt of an application under section 245C, has to call for a report from the Commissioner and on the basis of the materials contained in such report and having regard to the nature and circumstances of the case, etc., the Settlement Commission may allow the application to be proceeded with or reject the application. Further, sub-section (IA) of Section 245D provides for filing of objection by the Commissioner against proceeding with the application made under section 245C. 65.1 The above provisions cause delay, at times, in the disposal of applications filed before the Settlement Commission under section 245C. In order to expedite the disposal of such applications, sub-section (1) of section 245D has been amended to provide that the Commissioner shall furnish the report within a period of one hundred and twenty days of the receipt of communication from the Settle ..... X X X X Extracts X X X X X X X X Extracts X X X X
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