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TMI Blog2017 (9) TMI 188X X X X Extracts X X X X X X X X Extracts X X X X ..... o not find any reason to interfere in view of the narrow scope of judicial review to substitute our wisdom for the one taken by the Settlement Commission. The petition is, therefore, dismissed. X X X X Extracts X X X X X X X X Extracts X X X X ..... lanation was on two issues. First, on the buying and selling of immoveable properties for and on behalf of third parties. Second on managing of third party funds by making contributions in immoveable properties on their behalf. According to the Principal Commissioner of Income Tax, Surat, the author of the Rule 9 report, the disclosure on behalf of the assessee on such issues was without any supporting material. There was no full and true disclosure of the unaccounted income, in the application before the Settlement Commission. The report recorded the fact that based on the furnished details identification of the said third parties, became extremely difficult. It was, therefore, difficult to find out whether the funds were indeed obtained from third parties. 8. During the course of verification, the statement of Shri Hitesh Savani was recorded under section 131 of the Act. Shri Hitesh Savani in such statement recorded on 11.03.2015 denied any involvement in the land transaction. He also denied receipt of any part of the sale proceeds as stated by the assessee, Shri Baldev Patel. In view of the denial of Shri Savani of having any connection with the assessee the Principal Commissio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oceeded to hear the application on 09.09.2016, 14.09.2016 and 20.09.2016. The hearing was concluded on 26.09.2016 so as to meet the time limit on 30.09.2016. 11. On the question of natural justice, it was Mr. Divetia's contention that Shri Hitesh Savani was examined on 11.03.2015 however a copy of the statement of Shri Hitesh was not provided to him.Shri Savani was also not offered for cross examination. This, according to counsel, amounted to breach of the principles of natural justice. 12. The other contention that Mr. Divetia advanced was on the merits of the order of the settlement commission. It was contended that sufficient evidence was on record by way of entries in the cash books and the ledger accounts to show the connection of Shri Hitesh Savani with the dealing of the lands at Vesu. According to Mr. Divetia, one of the co-owner of the land Shri Parbat, on being questioned, categorically admitted that the assessee and Hitesh Savani had a share of investment to the extent of 14.18%. Shri Divetia during the course of arguments has taken us through the Statement of Shri Parbat which is annexed to the petition. 13. Mr. Divetia also invited our attention to the copies o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ctive parties, the question before us is whether the order of the Settlement Commission in rejecting the application of the petitioner-assessee on the account of he having not made a full and true disclosure deserves interference? 20. Section 245C of the Income Tax Act enables the assessee to make application at any stage of a case relating to him. He can make such application in such form and the manner prescribed. The section further envisages that such an application imposed contain a full and true disclosure of his income which has not been disclosed before the Assessing Officer, the manner in which such income has been derived, the additional amount of income payable on such income and such other particulars as may be prescribed. 21. As far as the assessee in question is concerned, he filed an application under section 245C on 08.04.2015. In the application so far filed, according to him the manner of deriving additional income was classified under various heads. Based on such classification and the manner of disclosure of such income, the assessee came forth to disclose the income before the Settlement Commission as under: Asst. Year Amount of additional income of Rs. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... page No. 12 of the income plus money receivable as share on sale of land at survey no. 223,224 and 225 at Vesu, Surat. None of the dates in BFI 16 page 2 and page 12(backside) tally with the dates on which the share of sale of land of survey No. 223, 224 and 225 at Vesu Surat was received. Therefore, the connection sought to be made by the applicant that the amounts relate to payment of 50% share to Shri Hitesh Himmatbhai Savani is not established. Moreover, no evidence has been brought on record by the applicant to establish that the signatures are of Shri Hitesh Himmatbhai Savani. In the absence of any co-relation, the applicant's submission that section 292C(1)(iii) is applicable in respect of the signatures cannot be accepted. In paras No 11, 12 and 13 the applicant has sought to refers to entries in BFI 16 and claimed that Shri Hitesh Himmatbhai Savani has collected amounts which are distributed among the two partners and that money has also been collected on behalf of both the partners. However, although these entries show transactions relating to Hitesh the connection with the entries of amounts received as per BFI 35-page 12 (discussed above) is not. In para no. 14 of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... since no request for cross examination of Shri Hiteshbhai Savani was made by the applicant. In para no 32 of the report dated 15.07.2016 supra, the Pr CIT has noted that in response to question no.11 where Shri Hitesh Himmatbhai Savani was required to give his comments on the statement of the applicant about their joint share in the purchase and sale of the land at Vesu, the applicant has stated that he had properly read the statement but did not know any person by the name of Shri Baldevbhai Bhikhabhai Patel and was not involved in any joint share in the purchase and sale of the land at Vesu. The applicant has referred to the statement of Shri Parbatbhi one of the co-owners of Vesu land (especially replies to question no 4,5,6 and 9) to support the contention of the applicant that the parties are known to each other. In para no.32 of report dated 15.7.2016 supra the Pr CIT has referred to Shri Hitesh Himmatbhai Savani being also shown the statement of Shri Ravjibhai Karamsingh Sutharia who had stated that Shri Baldevbhai Bhikhabhai Patel and his friend Shri Hitesh Himmatbhai Savani has jointly invested in cash in the purchase of R.S. No 223, 224 and 225 Vesu, Surat and upon sale o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rmations that the investments and further transactions were on behalf of Vince Patel, Piyush and Sanjay are not furnished. The complete details of the land have not been made available for determining the identity of the person entirely into the transactions. The entries in the impounded documents do not prove that the transactions are of third parties. None of the receipts or payments in the case of Shri Vince Patel are stated to have relation to any bank account. The main claim appears to be that since Vince Patel [refer pages 202 and 205 of PB-II submitted by the applicant on 23.08.2016]. However, the free English translation of loose paper BFI 8 page 15 (page 208 of applicant's PB submitted on 23.08.2016) shows that on the left side "Vince+Baldevbhai" is noted and therefore it appears that the claim that since Vince is written on top of the page, the transactions relate to him is not correct. The applicant has placed emphasis on BFI 8 pg 47 "returned to Vince (page no. 212 of applicant's PB-II submitted on 23.08.2016). However, the return has to be seen with reference to BFI 8 pg 15 discussed above in which Vince + Baldevbhai is noted. The claim of noting of returning o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the department in later years. The Settlement Commission is not even obliged to give reasons. It thus does not lay down any law of binding nature. It, of course, passes an order which would be effective and binding between the parties of that case. 10. The nature of scope of judicial review of a High Court under Article 226 of the Constitution or of the Supreme Court under Article 32 or 136 of the Constitution calling in question an order of Settlement Commission came up for consideration before the Apex Court in the case of Jyotendrasinhji (supra). The Apex Court while recognising that the finality clause contained in section 245-I of the Income Tax Act under which the Settlement Commission in the said case had passed the order, would not bar the jurisdiction of the High court under Article 226 or of the Supreme Court under Article 32 or 136 of the Constitution still opined that the scope of judicial review would be extremely narrow. The Apex Court held as under:- "16. It is true that the finality clause contained in Section 245-I does not and cannot bar the jurisdiction of the High Court under Article 226 or the jurisdiction of this court under Article 32 or under Article 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lice which, of course, constitute a separate and independent category. Reference in this behalf may be had to the decision of this Court in R.B. Shreeram Durga Prasad and Fatechand Nursing Das v. Settlement Commission (IT and WT) which too was an appeal against the orders of the Settlement Commission. Sabyasachi Mukharji, J., speaking for the Bench comprising himself and S.R. Pandian, J. observed that in such a case this Court is "concerned with the legality of procedure followed and not with the validity of the order". The learned Judge added "judicial review is concerned not with the decision but with the decisionmaking process". Reliance was placed upon the decision of the House of Lords in Chief Constable of the N.W. Police v. Evans. Thus, the appellate power under Article 136 was equated to power of judicial review, where the appeal is directed against the orders of the Settlement Commission. For all the above reasons, we are of the opinion that the only ground upon which this Court can interfere in these appeals is that the order of the Commission is contrary to the provisions of the Act and that such contravention has prejudiced the appellant. The main controversy in these a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee had made certain disclosures in the initial application under section 245C(1) of the Act. Such disclosures were however, revised and additional income was disclosed in the revised annexures. The Apex Court held that the assessee had no right to revise an application under section 245C(1) of the Act and further that such revised annexure making further disclosure of undisclosed income alone was sufficient to establish that the initial application made by the assessee could not be entertained as it did not contain true and full disclosure of the undisclosed income and the manner in which such income had been derived. 13. It is true that the order that the Settlement Commission has to pass under section 245D(1) of the Act comes with a rigid time frame. The scrutiny or the inquiry at that stage, therefore, necessarily shall have to be summary in nature. This however, does not take away the powers of the Settlement Commission to reject the application for settlement which in its opinion does not satisfy the legal requirements and more particularly, those contained in sub-section(1) of section 245C of the Act. 18. In case of Saurashtra Cement Ltd. And ors. v. Commissioner ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tive bodies; (ii)A petition for a judicial review would lie only on certain well-defined grounds (iii) An order passed by an administrative authority exercising discretion vested in it, cannot be interfered in judicial review unless it is shown that exercise of discretion itself is perverse or illegal. (iv) A mere wrong decision without anything more is not enough to attract the power of judicial review; the supervisory jurisdiction conferred on a Court is limited to seeing that the Tribunal functions within the limits of its authority and that its decisions do not occasion miscarriage of justice. (v) The courts cannot be called upon to undertake the government duties and functions. The court shall not ordinarily interfere with a policy decision of the State. Social and economic belief of a judge should not be invoked as a substitute for the judgment of the legislative bodies. (See Ira Munn v. State of Illinois)." 30. That the scope of judicial review under Article 226 to interfere in orders passed by the Settlement Commission was limited was reiterated by this Court in case of Manojkumar Babulal Agrawal vs. Secretary reported in [2017] 83 taxmann.com 139 : "16. Que ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 if such application was allowed to be proceeded, the petitioners would have produced additional materials in support of the requirement that the petitioner made true and full disclosure of undisclosed income and the manner of deriving the same. The petitioners were required to make an application and make such declarations as required under section 245C(1) of the Act. They could not have hoped for or insisted upon a second innings to do so beyond the stage of section 245D( ..... X X X X Extracts X X X X X X X X Extracts X X X X
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