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TMI Blog2019 (2) TMI 58X X X X Extracts X X X X X X X X Extracts X X X X ..... the matter by the order impugned, in our opinion, it is on a misconception of a legal position that the writ petition has been filed which does not raise any issue having lawful support warranting any indulgence. As we have already noted above, the power exercised by this Bench to examine an order passed by the Settlement Commission is limited on its statutory compliance or perversity and we do not find any instance present in the order impugned which draws itself in either of the two class requiring interference by this Court. We also do note that the Chairman and the Vice Chairman of a Settlement Commission are appointed from amongst serving Chief Commissioners or Principal Chief Commissioners or Principal Commissioner of Income Tax of equivalent rank and which again is a relevant factor for the Department to ponder, whether at all any order of a Settlement Commission unless staring on statutory violation or on perversity, should be assailed in a routine manner as having been done in the present case. - Civil Writ Jurisdiction Case No.13346 of 2016, Civil Writ Jurisdiction Case No. 13743 of 2017 - - - Dated:- 8-1-2019 - Mr. Justice Jyoti Saran And Mr. Justice Arvind Sr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for each of the two assessment years in question to the tune of ₹ 1,60,40,700/- which was inclusive of additional income of ₹ 1,05,00,000/- for the assessment year 2011-12. In a similar manner the Company made a true and proper disclosure of the total income for the assessment year 2012-13 to the tune of ₹ 1,05,94,182/- which was inclusive of additional income of ₹ 40,00,000/-. According to the assessee, the tax admissible on the income so dislcosed was ₹ 53,28,320/- for the assessment year 2011-12 and ₹ 34,37,283/- for the assessment year 2012-13. As per assessee, he has paid admissible interest on the amount of income tax payable, by making a total payment inclusive of interest for the period 2011-12 to the tune of ₹ 75,22,464/- and for the assessment year 2012-13 to the tune of ₹ 35,32,192/-. As per respondent-assessee, the application filed by him under section 245C of the Act was entertained by the Commission by passing an order to such effect under section 245D(1) of the Act on 4.4.2014. According to the Department, the order dated 4.4.2014 allowing the settlement application was not correct because the assessee had no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rue income. The scheme underlying Chapter XIXA of the Act presupposes a suppression by an assessee in disclosing his true income before the Assessing Officer and affords him an opportunity to make good the lapse by taking recourse to this remedy after making a full and true disclosure of his income in his settlement application before the Settlement Commission which would be inclusive of such income which was not disclosed by him before the Assessing Authority. There are certain definite constraints accompanying such remedy but for the purpose of the present adjudication we are only to see whether or not the assessee has made such true and full disclosure of his income before the Settlement Commission which he did not do before the Assessing Authority and/or whether despite the objections raised by the Commissioner of Income Tax in his report submitted under Rule 9 of the Rules , there has been any perversity in disposal by the Commission of the settlement application by the order impugned. For the purpose we would be referring to the relevant paragraphs of the report of the Commissioner of Income Tax submitted under Rule 9 of the Rules in so far as it raises objections ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... materials on record, which exercise is dehors the statutory provisions for once it is demonstrated that the assessee had failed to make full and true disclosure of his income even before the Settlement Commission, the remedy provided under Chapter XIXA of the Act would not be available for such assessee but this relevant aspect of the matter has been bypassed by the Commission. According to the learned counsel, this default by the Commission renders the order perverse. Mr. Mishra, learned counsel appearing for the assessee, while supporting the order impugned in so far as it proceeds to compute total income has submitted that there was no suppression by the assessee who had made true and full disclosure of income before the Commission and the relevant papers in support of which were also forwarded to the Commissioner of Income Tax for his report. In reference to the objections raised by the Commissioner, Income Tax in paragraph 3 in so far as assessment year 2011-12 and 2012-13 is concerned, he submits that each of the objections so raised by the Commissioner, Income Tax has been well taken care of by the Settlement Commission to record its opinion and which suffers no infirm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essee while working out its work in progress during the assessment year 2012 13 has accepted a receipt of ₹ 6,00,00,000/- which requires to be taken into account. In the nature of the objections so raised by the Commissioner Income Tax seen alongside the statement of the assessee in his application, it needs to be seen whether the Settlement Commission has in any manner defaulted in its exercise. For the purpose we would be referring to the relevant paragraphs of the order impugned in so far as it discusses the objections raised by the Commissioner, Income Tax in his report and the manner of its disposal. While paragraph 5 to 5.15 of the order impugned concludes on the claim put forth on the application in so far as it relates to the assessment year 2011-12, paragraph 5.16 and 5.17 deals with the objections taken by the Commissioner, Income Tax for the assessment year 2012-13. For the sake of convenience we are persuaded to reproduce paragraph 5.15 and paragraph 5.17 which would amply demonstrate that the objections raised by the Commissioner, Income Tax as regarding the assessment years in question stands well noted. 5.15 The CIT in his Rule 9 report has stated tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... plicant did not in any of these projects own land, and therefore, the appreciation lacked therein was not monetized in any project; (iii) the receipts of the developer do not inspire confidence after considering the issues raised in the Rule 9 report by the C.I.T.; (iv) the expenditure is also available in the incriminating papers seized; (v) the applicant s inventory had unsold stock of completed apartments; (vi) the construction in the five blocks is not formally complete , and is stayed by the High Court s order, as G + 4 floor levels are permissible. 11. On these facts, we are of the view that in the above material facts, the gross receipts both disclosed and undisclosed have to be considered, and a net profit rate applied. Though the view of applying the rate of the provisions 44AD was canvassed by the A.R., we note that this is for civil construction business and, where the turnover is below ₹ 40 lac. The underlying principle in that section would not be appropriate, as the parameters are different. The joint venture in real estate flats has been carried by the applicant. The appreciation in land is embedded, and the profit element increases if the land ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re. In our opinion, the Department can raise no objections on this count because every objection raised by the Commissioner, Income Tax as regarding non-disclosure by the assessee is well discussed and disposed with reasons. In the nature of exercise so undertaken by the Commission, we completely fail to appreciate as to the cause of action for the Department to maintain this writ petition. As we have noted above, Chapter XIXA of the Act incorporates a special procedure for settlement on the basis of full and true disclosure of income by an assessee and considering that the Commission has taken note of each of the objections raised by the Commissioner in his report and after testing the same against the disclosure made by the assessee in his application, proceeded to dispose of the matter by the order impugned, in our opinion, it is on a misconception of a legal position that the writ petition has been filed which does not raise any issue having lawful support warranting any indulgence. As we have already noted above, the power exercised by this Bench to examine an order passed by the Settlement Commission is limited on its statutory compliance or perversity and we do no ..... X X X X Extracts X X X X X X X X Extracts X X X X
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