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TMI Blog2019 (3) TMI 74X X X X Extracts X X X X X X X X Extracts X X X X ..... able in the original application made under Section 245C. This leads to a definite conclusion that there was no full and true disclosure of the undisclosed income and the source from which it derived in the application filed under Section 245C as held in Ajmera Housing Corporation [2010 (8) TMI 35 - SUPREME COURT OF INDIA] We hence set aside the judgment of the learned Single Judge, as also the order of the Settlement Commission for reason of the assessee having not made full and true disclosure under Section 245C. The Commission ought not to have proceeded with the application when the assessee made a voluntary offer of additional income, when the application was pending, in addition to that disclosed in its application under Section 245C. Noticing the long pendency of the matter before the Settlement Commission and before this Court, it is only proper that the assessee be permitted to file an appeal from the assessment order. The assessee shall be permitted to file an appeal within thirty days from the date of receipt of a copy of the judgment of this Court in the Writ Appeal - WA. No. 858 of 2015 - - - Dated:- 11-2-2019 - MR K. VINOD CHANDRAN AND MR ASHOK MENON, JJ. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was a preliminary objection raised on the maintainability of challenge raised under Article 226, the learned Single Judge found the same to be permissible. The constrained jurisdiction exercised insofar as a judicial review was rightly recalled as consideration of the decision making process and not the decision as such. Whether the Settlement Commission exercised a jurisdiction properly conferred on it and if it is so found, whether there was any error in such exercise was what could be looked into. We do not see any reason to interfere with that portion of the judgment, nor was the same assailed by the respondent. 4. On merits, it was found that the only contention raised by the learned Senior Counsel for the Department was that when additional amounts were offered by the assessee before the Settlement Commission, it should be presumed that the original application under Section 245C, did not contain a full and true disclosure of the undisclosed income or how it was derived. The learned Single Judge referred to his own decision in W.P.(C) No.2637/2014 and found that in the instant case the Commission found, there was no material with the Department to justify a further demand ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tarily offered any amounts in addition to that disclosed in the application under Section 245C. The Commission had specifically directed the assessee to sit along with the A.O., as also the Additional Director, an officer of the Settlement Commission, to reconcile those issues, which were arising from the report of the Commissioner. The consent as recorded by the Commission is again only to arrive at an agreed settlement. It cannot be taken as an admission of absence of full and true disclosure of income in the application under Section 245C. 7. We agree with the learned Single Judge that the jurisdiction conferred on the Commission under Chapter XIX-A, is akin to a statutory settlement. We are also of the opinion that in exercise of that jurisdiction the Commission is empowered to make adjustments and additions to the income as disclosed in the application under Section 245C. Sufficient support for the above view is available from the procedure as delineated in Section 245D. At the initial stage of consideration as to whether the application is to be proceeded with or not, the Revenue is not participated. As per the then existing provision a report is called for from the Commis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rores. Arguments in the application were concluded and the matter was reserved. Later to which, the assessee offered a further additional income of ₹ 11.41 crores. The Settlement Commission reopened the proceedings and directed the Commissioner to submit a further report under Rule 8 of the 1987 Rules. During the course of the proceedings the assessee voluntarily offered various amounts as undisclosed income for the assessment years, repeatedly. The Settlement Commission eventually, concluded the proceedings determining the total income of the assessee at ₹ 42.58 crores for the subject years and imposed a 'token' penalty of ₹ 50 lakhs and granted immunity to the assessee against prosecution. The High Court agreed with the Department that the first revision of income was not put to the Commissioner and remanded the matter. The Supreme Court interfered with the remand, finding that the High Court failed to notice that the income determined by the Commission was in tune with a subsequent report of the Commissioner. On fresh consideration a further remand was made by the High Court for determination of total income, penalty etc. without going into the maintain ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ure of income, which had not been previously disclosed by the assessee, being a precondition for a valid application under Section 245-C(1) of the Act, the scheme of Chapter XIX-A does not contemplate revision of the income so disclosed in the application against Item 11 of the form. Moreover, if an assessee is permitted to revise his disclosure, in essence, he would be making a fresh application in relation to the same case by withdrawing the earlier application. In this regard, Section 245-C(3) of the Act which prohibits the withdrawal of an application once made under sub-section (1) of the said section is instructive inasmuch as it manifests that an assessee cannot be permitted to resile from his stand at any stage during the proceedings. Therefore, by revising the application, the applicant would be achieving something indirectly which he cannot otherwise achieve directly and in the process rendering the provision of sub-section (3) of Section 245-C of the Act otiose and meaningless. In our opinion, the scheme of said Chapter is clear and admits no ambiguity. Hence though the Commission was initially satisfied to proceed with the matter; the question of full and true di ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... come in addition to that disclosed in the application under Section 245C would jeopardize the application itself, cannot be treated to be the ratio decidendi of the above decision. 13. The learned Judges of the Apex Court made a declaration insofar as one such disclosure in the application under Section 245C being sufficient to find absence of true and full disclosure as seen from the underlined portion in the above extract. Though it was found that the Commissioner had not challenged the directions of the High Court and hence there was no reason to interfere with that part of the impugned order; it was not a casual observation. The observations made where after due deliberation in the previous paragraph as seen herein below: 39. Before addressing the other issues, at the outset, we record our disapproval with the view of the High Court that it would not be proper to set aside the proceedings before the Settlement Commission even though it was convinced that the assessee had not made full and true disclosure of their income while making application under Section 245-C of the Act. As stated above, in its earlier order dated 28-7-2000 while declaring the order dated 17-1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aw, took a different path in Director of Income Tax (International Taxation). This was since there an additional income of ₹ 150 crores was offered at the instance of the Commission with a view to end the litigation at the earliest. The learned Judges also noticed many distinguishing aspects from Ajmera Housing Corporation ; which we do not find in the case before us. We, in fact are of the opinion that it is the Bombay High Court decision in Director of Income Tax (International Taxation that is distinguishable on facts. 15. As held in the impugned judgment, we agree that the Commission is not divested of power to make additions when considering an application under Section 245C. It cannot also be that when the Commission so makes additions the Commission would have to necessarily dismiss the application finding no full and true disclosure of income in the application filed under Section 245C. However what distinguishes the present case from a mere consent to a suggestion of the Commission, is that dehors any suggestion, the assessee had offered an additional income in excess of that disclosed in the application under Section 245C. 16. The application unde ..... X X X X Extracts X X X X X X X X Extracts X X X X
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