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TMI Blog2017 (6) TMI 877X X X X Extracts X X X X X X X X Extracts X X X X ..... acted as a broker in respect of certain entries made in the seized diary. However, this by itself cannot be clinching evidence, nor can the petitioner contend that such factor cannot be discarded without cross examination of the deponents. The affidavits of such persons would certainly be a relevant factor to be taken into account by the Commission but can neither be sole nor a conclusive factor. In the present case the Commission, as noted earlier, has taken into account all the relevant factors and given cogent reasons to hold that the petitioner’s theory that he had acted as a broker in certain transactions was not correct. We find the reasons are quite convincing. It was precisely to demonstrate this that we have taken note of various facts and circumstances taken into account by the Commission. For example, Commission noted that though Bharat Thakkar, according to the petitioner, was a sub-broker in majority of these transactions, the petitioner had not disclosed his identity in his statement under Section 132(4) recorded two months after the search and did so for the first time while filing settlement application nearly two years later. Petition dismissed. X X X X Extracts X X X X X X X X Extracts X X X X ..... as been explained during the course of hearing and also in the S.O.F. filed before the Commission. As regards the issue of true and full disclosure, we are of the opinion that, at present, there is no material in our possession which warrants the conclusion that true and full disclosure has not been made by the applicants. We, therefore, hold that true and full disclosure of income has been made by the applicants. 8. In view of the above, we allow both the applications to be proceeded with further." 2.2 In response to notice issued, the department appeared before the Settlement Commission and opposed the disclosures made by the petitioner in the settlement application as not being true and full disclosures. Of the many transactions contained in the rough diary seized by the department during the search operations, according to the petitioner, 29 names or codes represented the direct transactions carried on by the petitioner himself or through his relatives and the rest were as a broker. It was on this basis that the assessee had declared the additional income in the settlement application of a sum of ₹ 21.91 crores (rounded off). According to the department, this theory ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... all dated 18.06.2016 in which these deponents owned up the transactions referred to in the seized diary. 2.4 The department thereupon filed a further report dated 12.07.2016 and inter alia contended as under: "(6) The assessee has claimed transactions of ₹ 36.67 crs. were on account of main broker namely Mr. Sanjiv. Assessee has filed confirmations from certain people who were stated to be brokers discussed on pages 12 to 25, sub-brokers in para 5.2 of Report. Only general discussion is done with respect to the same. Further evidences to prove the non-genuineness of these confirmations need to be filed on this issue." 2.5 The petitioner filed application dated 19.07.2016 before the Settlement Commission and pointed out that the petitioner has filed affidavits of the said sub-brokers and the claim of the assessee that these transactions were as a broker cannot be brushed aside without carrying out inquiries or verification by the department from such sub-brokers. It was, therefore, prayed that the Settlement Commission should direct the department to carry out verification as to the ownership of the transactions carried out by the assessee on brokerage basis. 2.6 The Se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rsons who confirmed that the transactions in question were supplied by them to the petitioner and the petitioner had merely acted as a broker and they were the sub-brokers. Main thrust of the counsel's contention was that all such materials were discarded by the Settlement Commission without proper inquiries. If at all such affidavits were to be disbelieved, least that was needed was to cross examine such deponents and to make further inquiries. The counsel would also rely on the observations made by the Settlement Commission in the earlier orders allowing the settlement applications to proceed further. According to him, the Settlement Commission found no adverse material at that stage to reject the application of the petitioner. No further material was brought on record by the department thereafter to enable the Settlement Commission to reject the application at the stage of passing order under Section 245D(4) of the Act. 3.1 Counsel relied on a decision of the Supreme Court in case of Mehta Parikh & Co. vs. Commissioner of Incometax reported in [1956] 30 ITR 181 (SC) to contend that the affidavits filed by the assessee before the Settlement Commission could not be even rejected ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tlement filed by the petitioner, his case is that the seized diary represented off market commodity transactions entered into by the petitioner in his personal capacity as well as a broker. The department hotly disputed this stand of the petitioner. The Settlement Commission accepted the stand of the department and rejected the application for settlement on the ground that true and full disclosures were not made. 6. At the threshold, we may note that the earlier orders passed by the Settlement Commission allowing the settlement to proceed further would not in any manner curtail the jurisdiction of the Commission to examine the application of the petitioner including on the anvil of true and full disclosures. The first order passed on 24.02.2015 was an exparte order at which stage the department had no role to play. The subsequent order even after notice to the revenue passed on 13.04.2015 under Section 245D(2C) of the Act was in the nature of a summary proceeding. It was, if we understand correctly, not even the contention of the counsel for the petitioner that passing of these orders or the contents thereof in any manner curtailed the jurisdiction of the Commission to examine the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... njiv/Sanjeev/Sonuji if they happened to be code names. 7.1 The Commission further noted that similar facts were involved with respect to the remaining three sub-brokers also. It was noticed that all these sub-brokers had filed the returns for the assessment years 2012-13 and 2013-14 on a single date i.e. 31.03.2014 and from the same IP address. The returns were not filed within the due dates. In case of Bharat Dahyalal Thakkar, the return for the assessment year 2012-13 was filed on 21.12.2012 i.e. after the date of search and even after the date of statement by the petitioner under section 132(4) of the Act. Shri Bharat Dahyalal Thakkar had shown income of ₹ 4.32 lakhs and ₹ 4.43 lakhs for the assessment years 2012-13 and 2013-14 respectively. The Commission also noted that all the affidavits filed by the said so-called subbrokers were identically worded. The Commission also examined minutely the dummy or the code names used in the seized diary allegedly representing one or the other of the four sub-brokers but did not find any connection. It was noticed that the details filed along with the confirmations of the four sub-brokers as well as their affidavits dated 18.06 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the material on record leads to the inference that the statements made by the sub brokers and the applicant in the affidavit cannot be held to be true in asmuch as the claim of transactions of off market commodity futures were made on behalf of sub brokers. It is respectfully submitted that the relied upon case of L.Sohanlal Gupta V/s CIT 33 ITR 786 (All.) is similarly distinguishable. It is also added that the applicant has inter alia relied on Glass Lines Equipments Co. Ltd. V/s CIT 119 Taxman 813 (Guj.). In that case, a portion of the affidavit was ignored. However, in the present case, no cognizance is being taken of the entire affidavit of the four sub brokers. The applicant has stated that he has filled up various deficiencies and incompleteness and removed incorrectness in the seized documents through statements and affidavit including his affidavit. The seized material clearly shows that the transactions recorded therein are in the nature of own transactions and not transactions carried out in the capacity of broker and the acceptance by the applicant of only 29 code names transactions of off market commodity futures is without any basis." 8. It can thus be seen that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2(3) G.L.H. 235, scope of judicial review by the Supreme Court against the order of Settlement Commission was examined in light of various decisions of the Apex Court and following observations were made : "15. It is well settled that no finality clause in a statute would oust the jurisdiction of the High Court under Article 226 of the Constitution or that of the Supreme court under Article 32 or 136 of the Constitution. Nevertheless, the parameters of judicial intervention in a decision rendered by an administrative tribunal are well recognised and well laid down. Ordinarily, the court would interfere if the Tribunal has acted without jurisdiction or failed to exercise jurisdiction vested in it or the decision of the Tribunal is wholly arbitrary or perverse or malafide or is against the principles of natural justice or when such decision is ultra vires the Act or the same is based on irrelevant considerations. 16. When examining the scope of judicial review in relation to a decision of Settlement Commission, we must further bear in mind that the Settlement Commission is set up under the statute for settlement of revenue claims. Its decision is given finality and it also has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and such consideration has gone into its decisionmaking process resulting into grave injustice and prejudice to the party then within the narrow confines of the judicial review, interference would still be open. 19. When the Settlement Commission examines an application in terms of statutory powers and finds that such application does not satisfy the legal requirements, as contained in section 245C(1) of the Act, in our view, unless such decision of the Commission is contrary to the statutory provisions contained in the Act, interference in exercise of writ jurisdiction under Article 226 of the Constitution of India would not be warranted. The counsel for the petitioners, as recorded earlier, made strenuous efforts to convince us that the Commission ought not to have summarily dismissed the application. We are afraid this cannot be the ground on which we would reverse the Commissions order. If on the basis of material on record, the Commission could have come to the conclusion that application was not valid, it had every authority to reject the same even at the stage of first screening under section 245D(1) of the Act. We are not convinced with the petitioners contention that i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... late Assistant Commissioner of the entries in the cash book of the appellants. The cash book of the appellants was raccepted and the entries therein were not challenged. No further documents or vouchers in relation to those entries were called for, nor was the presence of the deponents of the three affidavits considered necessary by either party. The appellants took it that the affidavits of these parties were enough and neither the Appellate Assistant Commissioner, nor the Income tax Officer, who was present at the hearing of the appeal before the Appellate Assistant Commissioner, considered it necessary to call for them in order to cross- examine them with reference to the statements made by them in their a affidavits. Under these circumstances it was not open to the Revenue to challenge the correctness of the cash book entries or the statements made by those deponents in their affidavits. This being the position, the state of affairs, as it obtained on 12th January 1946, had got to be appreciated, having, regard to those entries in the cash books and the affidavits filed before the Appellate Assistant Commissioner, taking them at their face value. The entries in the cash book ..... X X X X Extracts X X X X X X X X Extracts X X X X
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