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TMI Blog2003 (9) TMI 72X X X X Extracts X X X X X X X X Extracts X X X X ..... mpany") viz., Ace Investments Limited is the cent per cent. holding company of Express Newspapers Limited, an incorporated company under the Companies Act, 1913, and an existing company within the meaning of the Companies Act, 1956. Express Newspapers Limited is the wholly owned subsidiary of the company. Fifty one per cent. shares of the company are held by Bhagwandas Goenka Educational Institution, which is a public limited company under the provisions of section 25 of the Companies Act, 1956. The company carries on business in finance and also deals in shares and securities. It derives share income as a partner of a firm known as Viswa Udyog another concern of Express Newspapers Limited. The company availed of a loan of Rs. 62,30,000 from N. N. Investment Private Limited, a company carrying on the business of financing and which has two associate companies known as Nirmal and Navin Private Limited and Navin Cold Storage Private Limited. The loans were availed of by the company during the financial year 1985-86 ending March 31, 1986, for the purpose of advancing loan in turn to Express Newspapers Limited on short term basis with interest at the rate of 16 per cent. per annum, as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he alleged creditor and merely on the basis of make believe credit entries in the account no liability to pay the interest accrued in the hands of the company. The petitioners are before this court in this writ petition questioning that portion of the order of the Settlement Commission in sustaining the disallowance of interest. I have heard Mr. V. G. Ramachandran, learned senior counsel for the petitioners and Mr. T. Ravikumar, learned counsel for respondents Nos. 1 to 3 and Mr. T. N. Seetharam, learned counsel for respondents Nos. 6 to 8. The writ petition against respondents Nos. 4 and 5 was dismissed by the orders of this court dated February 22, 2002. I have also perused the counter affidavit filed on behalf of the second respondent, the Commissioner of Income-tax. Mr. V. G. Ramachandran, learned senior counsel appearing for the petitioners, would submit that the petitioners are not questioning the order of the Settlement Commission on the merits, but the order of the Settlement Commission is questioned on the ground of want of jurisdiction. In this context, learned senior counsel heavily relied upon the judgment of the apex court in CIT v. Express Newspapers Ltd. [1994] 206 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iction under article 226 of the Constitution of India unless there is patent illegality in the order. In so far as the power of this court to exercise its jurisdiction under article 226 of the Constitution of India, the law is well settled that the judicial review of this court is not concerned with the decision, but only with regard to the decision making process. The above position of law was reiterated by the apex court in the judgment in R. B. Shreeram Durga Prasad and Fatechand Nursing Das's case [1989] 176 ITR 169 and this proposition of law is also not disputed by learned senior counsel for the petitioners. Equally, the judicial review of this court to interfere in the order of the Settlement Commission is not barred when the order of the Settlement Commission is in contravention of any of the provisions of the Act. The law on this question is settled by the apex court in the judgment in Jyotendrasinhji's case [1993] 201 ITR 611. This proposition of law is also not disputed by learned senior counsel for the petitioners. Equally the power of this court to interfere in the order of the Settlement Commission unless there is patent illegality as held by this court in C. A. Abra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion 245C is thus in the nature of voluntary disclosure of concealed income. Unless the income so disclosed exceeds Rs. 50,000, the application under section 245C is not maintainable." A Division Bench of the Bombay High Court in the case of CIT v. Income-tax Settlement Commission [2000] 246 ITR 63, has ruled that full and true disclosure of income by the assessee is a condition precedent for settlement of cases and for grant of immunity from penalty and prosecution. The law on the issue to sustain an application under section 245C(1) of the Income-tax Act is well settled that unless and until the assessee makes full and true disclosure of income which has not been disclosed before the Assessing Officer, it cannot maintain the application. The facts in this case are not disputed inasmuch as the order of the Settlement Commission also proceeds on the basis that the company had not made full and true disclosure of the facts regarding the real nature of the transactions with Express Newspapers Limited and N. N. Investment Private Limited. Sections 245C and 245H of the Act contemplate full and true disclosure of income by the applicant and the manner in which such income has been der ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the order of assessment. Although a decision of the apex court may not reopen a concluded decision, if before a decision is arrived at the decision of the apex court is rendered, such decision shall be binding on the court or the Commission for that matter. There was no finality arrived at by the Commission on the application of the petitioner as admittedly the same was pending on the date when the apex court declared the law. Therefore, the decision as declared by the apex court is applicable to the pending proceedings before the Settlement Commission. The decision of the apex court, being a declaration of the true and correct position of law becomes applicable to all transactions and proceedings which have not become final and concluded. As a necessary corollary, the true and correct position of law declared by the apex court applies not only to transactions and proceedings subsequent to the decision, but also to transactions and proceedings prior to the decision, but, of course, subject to the rule of finality of proceedings. Since there was no finality arrived at on the application filed by the petitioners, the Commission is bound by the law declared by the apex court in Expres ..... X X X X Extracts X X X X X X X X Extracts X X X X
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