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TMI Blog2021 (2) TMI 106X X X X Extracts X X X X X X X X Extracts X X X X ..... etitioner by way of application to the Settlement Commission. The stand of the respondent in its e-mail dated 7th November, 2019 that the Settlement Commission assumes jurisdiction from the day when an order under Section 245D(1) is made when the application under Section 245C(1) is ordered to be proceeded with further, and which in the present case was on 8th November, 2019 and before the said date the Settlement Commission did not have exclusive jurisdiction and the respondent remained entitled to impose penalty, was / is not only contrary to the provisions of the proviso to Section 245F(2) but also contrary to the law laid down by this Court in Commissioner of Income Tax Vs. Income Tax Settlement Commission [ 2013 (7) TMI 95 - DELHI HIGH COURT] Settlement Commission, under the proviso to Section 245F(2), with effect from 1st November, 2019 when the petitioner admittedly made the application under Section 245C before it, had the exclusive jurisdiction to deal with the matter relating to violation of Section 269ST of the Act also and the respondent, on 4th November, 2019 did not have the jurisdiction to impose penalty for violation of Section 269ST on the petitioner and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... same. The counsel for the respondent draws attention to CM No.34968/2020 filed by the respondent, for vacation of the stay granted on 10th January, 2020 and expresses urgency, contending that the petitioner has obtained stay of the order imposing penalty, by misrepresenting / suppressing facts. We have however enquired from the counsel for the petitioner, whether not the hearing on the application for vacation of stay as well as on the main petition itself, would be substantially similar. The counsel for the petitioner then states that the writ petition itself can be heard today, without the counter affidavit coming on record in as much as the outcome of the writ petition depends upon the interpretation of the statutory provisions and the respondent does not need to refer to any documents other than those annexed to the petition and in fact the respondent, along with its counter affidavit has not annexed any documents and the pleadings in the counter affidavit are also confined to law, which can be argued. We have thus proceeded to hear the counsels on the writ petition. 4. It is the case of the petitioner, (a) that a search and seizure operation under Section 132 of the Act as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... respondent of having approached the Settlement Commission; (l) the respondent however proceeded to thereafter pass the impugned penalty order dated 4th November, 2019 and communicated the same to the petitioner from the same e-mail ID, at around 10:30 AM i.e. immediately on receipt of petitioner s e-mail; (m) vide the impugned penalty order, penalty under Section 271DA for the assessment years 201819 and 2019-20 has been imposed on the petitioner, ignoring the fact that the petitioner had already preferred an application before the Settlement Commission; (n) the respondent, vide e-mail dated 7th November, 2019 informed the petitioner that the Settlement Commission assumes jurisdiction only after it allows the application to be proceeded with, as provided under Section 245F(2) of the Act and there is no bar on any proceeding till then, in view of Section 245F(4) of the Act; (o) the Settlement Commission, after the hearing on 8th November, 2019, passed a detailed order dated 11th November, 2019 allowing the application of the petitioner under Section 245C(1) to be proceeded with further; and, (p) as the impugned penalty order is in contravention of the provisions of the Act, the pet ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an income tax authority under this Act in relation to the case: Provided that where an application has been made under Section 245C on or after the 1st day of June, 2007, the Settlement Commission shall have such exclusive jurisdiction from the date on which application was made. Section 245H titled Power of Settlement Commission to grant immunity from prosecution and penalty empowers the Settlement Commission to, if satisfied that the applicant has co-operated with the Settlement Commission in the proceedings and has made a full and true disclosure of his income and the manner in which such income has been derived, grant to such person, subject to such conditions as it may think fit to impose for the reasons to be recorded in writing, immunity from prosecution for any offence under this Act or under the Indian Penal Code (45 of 1860), or under any other Central Act for the time being in force and also either wholly or in part from the imposition of any penalty under this Act, with reference to the case covered by the settlement . 7. The contention of the counsel for the petitioner is, that the petitioner, on 1st November, 2019 having made an application to the Se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cted, the counsel for the respondent answers in the affirmative and on further enquiry whether the said aspect can be referred to the Settlement Commission, if there is no case of undisclosed income, the counsel for the respondent replies in the negative. 9. We may at this stage record that Section 269ST prohibits receiving an amount of ₹ 2 lacs or more, in aggregate from a person in a day or in respect of a single transaction or in respect of transactions relating to one event or occasion, from a person, otherwise than by an account payee cheque or an account payee bank draft or use of electronic clearing system to a bank account. We may further record that the notice dated 30th September, 2019 was issued, stating that during the course of search and seizure operation in the case of the petitioner it had been found from the seized documents that the petitioner had grossly violated the provisions of Section 269ST of the Act by way of cash receipts of ₹ 2 lacs or more from a single person by splitting the invoices against the sale of goods at its stores, thus rendering itself liable for penalty proceedings under Section 271DA of the Act. It was further elaborated in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... resented to the Settlement Commission under Section 245D(3) of the Act. B. We have thus enquired from the counsels, whether the Principal Commissioner / Commissioner, in the present case, in response to the application of the petitioner to the Settlement Commission, has submitted any report and if so, whether in the said report the aforesaid aspect of violation of Section 269ST of the Act has been reported; if it is so, the Settlement Commission would have jurisdiction to pass orders with respect to violation alleged of Section 269ST also. However neither counsel has instructions on the said aspect. C. It is not deemed necessary to adjourn the hearing to enable counsels to take instructions on the aforesaid aspect, because the powers of the Settlement Commission under Section 245D(4) also extend to examining such further evidence as may be placed before it or obtained by it and the Settlement Commission in the present case is still seized of the matter and would be within its rights to, if so deems apposite, also deal with the aspect of violation of Section 269ST of the Act and either to grant exemption from penalty therefor or to pass such other order as it thinks fit in r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the settlement . The words of an Income Tax Authority under this Act in relation to the case and immunity from; imposition of any penalty under this Act with respect to the case covered by the settlement are without any limitation of imposition of penalty and immunity with respect thereto only in the matter of undisclosed income and in our view would cover also penalties under other provisions of the Act, detection whereof has the same origin as the origin of undisclosed income. H. Not only so, the words in relation to the case and with respect to the case used in the aforesaid provisions, are words of wide amplitude and which, in our opinion, in the facts of the present case may allow the Settlement Commission to, notwithstanding the petitioner having not expressly referred to the notice dated 30th September, 2019 and proceedings for violation of Section 269ST pending against it in its application, pass such orders as it may thinks fit in relation / with respect thereto and the said powers of the Settlement Commission cannot be permitted to be interdicted by the impugned order. We reiterate that the proceedings of violation of Section 269ST, as per the notice dated 30th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tlement Commission did not have exclusive jurisdiction and the respondent remained entitled to impose penalty, was / is not only contrary to the provisions of the proviso to Section 245F(2) but also contrary to the law laid down by this Court in Commissioner of Income Tax Vs. Income Tax Settlement Commission (2014) 360 ITR 407 (Delhi). 14. Once it is so, the Settlement Commission, under the proviso to Section 245F(2), with effect from 1st November, 2019 when the petitioner admittedly made the application under Section 245C before it, had the exclusive jurisdiction to deal with the matter relating to violation of Section 269ST of the Act also and the respondent, on 4th November, 2019 did not have the jurisdiction to impose penalty for violation of Section 269ST on the petitioner and the impugned order is without jurisdiction and liable to be set aside and is hereby quashed. 15. We are of the view that it should be left to the Settlement Commission to, in exercise of its powers under Section 245D(4), Section 245F and Section 245H, consider whether the matter of penalty for violation of Section 269ST of the Act is to be looked into by the Settlement Commission while deciding ..... X X X X Extracts X X X X X X X X Extracts X X X X
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