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TMI Blog2019 (11) TMI 874X X X X Extracts X X X X X X X X Extracts X X X X ..... e of full and true facts in the applications under section 245C of the Act. Under the circumstances, considering the amounts so offered by way of settlement which are quite meagre considering the overall disclosure made, this court does not find any infirmity in the impugned order passed by the Settlement Commission warranting interference in exercise of powers under article 226 of the Constitution of India. In the facts of the present case, no revised application under sub-section (1) of section 245C of the Act had been filed by the respondents revising the initial disclosures. The respondents/ applicants have not made any revised disclosures, nor have they accepted the liability to pay the additional amounts. Nonetheless, in the spirit of settlement, the respondents applicants have, offered to pay such amounts to bring a quietus to the matter and buy peace of mind. Moreover, the additional amounts which the respondents have agreed to pay are meagre considering the overall amounts disclosed in the applications under section 245C(1) of the Act. Under the circumstances, the contention that there was no full and true disclosure in the applications made under section 245C(1) of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Amount of addition Nature of addition 2004-05 1,51,50,052 Unexplained Capital Introduced 3,35,477 Unexplained Purchases @25% 1,29,328 Disallowance of administrative expenses @ 10% 12,94,622 Disallowance of interest on capital 2,07,498 Disallowance of trading expenses @ 5% Total 1,71,16,977/- 4.The respondent applicant gave its comments to the contents of the above report by a reply as contemplated under rule 9A of the rules on 27.11.2017, wherein it had dealt with additions proposed by the Assessing Officer as follows: 4.1 As regards addition on account of introduction in capital account of &# ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be proceeded further under subsection (2D) of section 245D of the Act, the Assessing Officer had proposed the following additions: Asst. Yr. Amount of addition Nature of addition 2004-05 1,12,06,467 Unexplained Capital Introduced 3,69,690 Unexplained Purchases @25% 1,21,413 Disallowance of administrative expenses @ 10% 10,11,348 Disallowance of interest on capital 1,94,664 Disallowance of trading expenses @ 5% Total 1,29,03,582/- 6. On 27.11.2017, the respondent applicant gave its comments to the contents of the above report by a reply as contemplated under rule 9A of the rules, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... partner's capital is concerned, the applicant had submitted affidavits made by Shri Mohan D. Patel and the two applicants and it was further stated that if at any stage these affidavits are found to be false, it may be treated as a misrepresentation of facts as per section 245D(6) of the Act and the consequences as per section 245D(7) of the Act may follow in the case of the two applicants. 8. The Settlement Commission further noted that the applicants had offered additional income for bringing quietus to certain issues in the spirit of settlement as per letter dated 8.6.2018 viz. ₹ 2,07,498/- in case of M/s. Shreyansh Corporation and ₹ 1,94,644/- in case of M/s. Samarth India. 9. Taking into account all facts and discussions on record, the Settlement Commission was of the view that the additional income offered during section 245D(4) proceedings vide the applicant's letter dated 8.6.2018 added to the additional income disclosed in the settlement applications can be accepted with reference to the income disclosed in the settlement applications. It further noted that the CIT (DR) and the Assessing Officer also did not make any furt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion. It was further observed that, in the scheme of Chapter XIX-A, there is no stipulation for revision of an application filed under Section 245C(1) and the determination of income by the Settlement Commission has necessarily to be with reference to the income disclosed in the application filed under that section. Revision of income would tantamount to revision of application, no contemplated in the scheme...... 12. From the averments made in the memorandum of petition, it further appears that the order of the Settlement Commission is sought to be challenged on the ground that it is a nonreasoned order. 13. It is in the backdrop of the aforesaid facts and contentions that the validity of the impugned order passed by the Settlement Commission is required to be examined. On a perusal of the impugned order, it can be seen that the Settlement Commission has considered the additions proposed by the Assessing Officer and the explanation given by the respondents/ applicants and has been satisfied with such explanation. Insofar as the addition on account of unexplained capital introduced is concerned, the authorised representative had also explained that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he petitioner in the present petitions is against the spirit of settlement as envisaged under section 245D of the Act. Proceedings before the Settlement Commission are in the nature of settlement between the parties and are not strictly speaking adjudicatory proceedings. On a perusal of the impugned order passed by the Settlement Commission, it is abundantly clear that both the respondents had not accepted the liability of 5% of trading expenses, but in the spirit of settlement offered to pay the amount computed by the Assessing Officer with a view to bring the quietus to the matter and buy peace of mind. This court is of the view that the offer to pay such amounts in addition to the amounts disclosed in the applications under section 245C of the Act cannot be said to be disclosure of any further amounts under that section as the same have been offered only to bring about a settlement. The fact that the applicants have offered to pay such amounts, the liability whereof has not been accepted by them, cannot be termed as non-disclosure of full and true facts in the applications under section 245C of the Act. Under the circumstances, considering the amounts so offered by way of settle ..... X X X X Extracts X X X X X X X X Extracts X X X X
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