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TMI Blog2017 (9) TMI 1740X X X X Extracts X X X X X X X X Extracts X X X X ..... Court of Chhattisgarh which they have done at high Court of Chhattisgarh and which in the opinion of this Court cannot be said to be in any manner bad in law or without jurisdiction. Thus, the objection pertaining to the jurisdiction of this High Court does not have much force and the same deserves to be and is accordingly rejected. Whether the impugned order passed by the Settlement Commissioner particularly on the basis of the observation in the impugned order of it being practicably not possible to scrutinize the documents on record, can be said to be proper, legal and justified? - Held that:- Once when the Settlement commission itself reaches to the conclusion that it is not practicable for it to examine the record and investigate the case, it ought to have laid its hand off and could have either intimated the Kolkata High Court regarding paucity of time to examine and investigate or could have asked the Department to move an appropriate application for grant of extension of time from the Kolkata High Court. In the absence of either of the steps, closing of a matter and passing an order without examination of the records or without proper investigation would naturally v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vision, if the settlement application was not disposed of by 31st of March, 2008 under the provisions of Section 245 HA of the Act, all such proceedings before the Settlement Commission would have stood abated and the matter would have to be decided afresh by the Assessment Officer. The respondent no.2 in each of the cases preferred a petition before the High Court of Kolkata. One such petition was registered as WP No. 315 of 2008 which came up for hearing on 20.03.3008, on which date, the High Court of Kolkata as an interim measure passed the following order: In the meantime, the Settlement Commission shall dispose of the application of the petitioner pending before the Commission in accordance with the provisions of the Income Tax Act, 1961. 3. Taking aid of the said order passed by the High Court of Kolkata, the Settlement Commission meanwhile issued the impugned order Annexure P-1 dated 27.03.2008 in each of the cases under Section 245D (4) of the Income Tax Act accepting the income as offered by each of the respondent assessees without proper verification or examination of the correctness of the income offered by them. 4. It is this action and order of the Set ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the Commission that the proceeding be concluded ignoring the statutory provisions. It was thus prayed for quashment of Annexure P-1 and for remitting the matter back to the Settlement Commission for deciding afresh. 6. Per contra, learned counsel appearing for respondent no.2 raised objection so far as the maintainability of the writ petitions are concerned. According to him, it is a case where the Settlement Commission has passed the impugned order Annexure P-1 purely in accordance with the provisions of law. Further the order has been passed in the light of an order passed by the Kolkata High Court on 20.03.3008 whereby the High Court of Kolkata had directed the Commission to decide the case by the next date of hearing which was fixed on 28th of March. Since the Commission has decided the case in the light of an order passed by the Kolkota High Court, any subsequent proceeding arising out of the outcome of the direction given by the Kolkata High Court has to be filed in the High Court of Kolkata and not in the High Court of Chhattisgarh. Thus, the present writ petitions are not maintainable for lack of jurisdiction. 7. That the petitioners should not have any griev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r of it being practicably not possible to scrutinize the documents on record, can be said to be proper, legal and justified. 9. So far as the first issue of jurisdiction is concerned, undisputedly respondent no.2 in each of the writ petitions had their business in the State of Chhattisgarh, that the Income Tax Department conducted a search/seizure proceeding at their premises in the State of Chhattisgarh and the territorial jurisdiction for assessment of the tax in respect of respondent no.2 in each writ petition was the Income Tax Department in the State of Chhattisgarh. 10. The admitted facts are that a search proceeding was initiated on 20.08.2000 under Section 132 (1) of the Income Tax Act. A notice under Section 153 BC for the purpose of assessment of undisclosed income was issued on 22.11.2000 to which respondent assessees also filed their return. Pending the assessment proceedings, the respondents assessees filed an application on 05.07.2002 for settlement of the assessment proceedings under Chapter 19A of the Act. The settlement proceedings which were initiated in the year 2002 went on till 2008 when suddenly the respondent assessees filed a writ petition befor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Settlement Commission and where the challenge is on the merits of the order, the Income Tax Department had an option of either approaching the Kolkata High Court or they could have filed it in the High Court of Chhattisgarh which they have done at high Court of Chhattisgarh and which in the opinion of this Court cannot be said to be in any manner bad in law or without jurisdiction. Thus, the objection pertaining to the jurisdiction of this High Court does not have much force and the same deserves to be and is accordingly rejected. 13. So far as the second issue testing the veracity of the impugned order is concerned, what has to be seen is whether the decision was in accordance with the procedure prescribed under the statute or not. Whether the mandatory requirement under the Act has been followed by the Commission or not? Whether the Settlement Commission could have by itself waived off the procedure prescribed while passing the impugned order? Whether even at the instance of the interim order of the Kolkata High Court dated 20.03.2008 the Settlement Commission could have kept away the statutory requirements while hearing a settlement proceeding under Chapter 19A of the A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Commission had not examined the records nor had it investigated the case but only because there was a direction given by the High Court of Kolkata it proceeded to decide the matter without examination of the records and investigating the matter. 17. If we look into the interim direction given by the Kolkata High Court in its order dated 20.03.2008, it is evidently clear that the Kolkata High Court also had not directed the Commission to overlook the provisions of the Income Tax Act. True it is that the High Court of Kolkata had ordered the Settlement Commission to decide the case meanwhile but at the same time the High Court of Kolkata had also made an observation that the application has to be decided in accordance with the provisions of the Income Tax Act . This observation of the High Court of Kolkata leaves no ambiguity in anybody's mind that the Settlement Commission was required to follow the provisions of law as is required under Chapter 19A. It is also not a case where the Income Tax Department had not submitted its report/objection/reply even though at a belated stage. Once such report/objection/reply had been filed, the Commission was duty bound to act in acc ..... X X X X Extracts X X X X X X X X Extracts X X X X
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