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TMI Blog2021 (4) TMI 545X X X X Extracts X X X X X X X X Extracts X X X X ..... of settling the case before the 2nd respondent Income Tax Settlement Commission is a question of fact. The Income Tax Settlement is the final fact find authority. Therefore, to that extent, the impugned order settling the cases of the 1st respondent in the respective writ petition covering the period covered by section 153A of the Income Tax Act, 1961, there is no merit in the writ petition. The petitioner has also not demonstrated any extraordinary circumstances, which warrants interference on the issues arising of the facts determined by the second respondent Income Tax Settlement Commission. Whether the Settlement Commission can direct payment of interest? - There two distinct stages under Chapter XIX-A and that the legislature has not contemplated the levy of interest between the order under Section 245-D(1) stage and Section 245-D(4) stage. Interest under Section 234-B will be chargeable till the order of the Settlement Commission under Section 245-D(1) i.e. admission of the case. In the impugned order, the 2nd respondent Income Tax Settlement Commission has directed the interest under Section 234A to be charged for the delay in filing of the original return under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t has come to a conclusion that the 1st respondent in their respective writ petitions have made adequate disclosures for settling the case and therefore has granted a waiver to the first respondent in the respective writ petitions, from payment of penalty and immunity from the prosecution in terms of section 245H of the Income Tax Act, 1961. 3. By the impugned orders, the 2nd respondent, Income Tax Settlement Commission, has settled the case by determining the income of the first respondent in the respective writ petitions as follows:- i) Dr.Chandralekha, the 1st respondent in W.P.No.31351 of 2015 Ass.Year Income Returned Addl.Income offered in the Settlement Application Further income required to be disclosed Total income determined by the ITSC 2006-07 22,72,917 3,26,925 15,30,426 41,30,268 2007-08 42,77,279 91,33,667 16,90,085 1,51,01,031 2008-09 1,78,00,263 2,97,14,051 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed as the consolidated additional income of both the 1st respondent in the respective writ petitions. 5. By the impugned orders, the 2nd respondent Income Tax Settlement Commission has also directed the respective applicants (1st respondent) to pay interest with the following observation:- Charging of Interest: Prayer for waiver of interest is not accepted and the same will be charged as per law. While calculating the interest, the Assessing Officer will keep in view the decision of the Hon ble Supreme Court in Civil Appeal No.516-527 of 2004 dated 21.10.2010 in the case of Brij Lal and Others vs. CIT (2010) 328 ITR 477(SC ). In view of Sec.234A read with Sec.245C, interest under Section 234A is to be charged for delays in filing of original return under Section 139/153A/153C as the case may be on the total income determined under Section 245D(4) of the Act. Interest under Section 234B is to be charged from the 1st day of the assessment year till the date of order passed by the Settlement Commission under Section 245D91). Further, as has been decided by the Hon ble High Court of Calcutta reversing the decision of the Special Bench in the case of M/s.G.M.Foods An ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... when the applications were filed before the 2nd respondent Income Tax Settlement Commission. 12. The 1st respondent in W.P.No.31352, Dr.K.Velusamy, a Cardiologist was running a hospital in the name of K.V.Hospital, Chennai when the applications were filed before the 2nd respondent Income Tax Settlement Commission. 13. According to the petitioner, a search was conducted by the Income Tax Department on 28.11.2011 and 24.11.2011 at the residence, clinics and hospitals of the respective 1st respondent in the respective writ petitions which revealed that they had suppressed a substantial income of ₹ 19,12,72,956/- while filing returns. 14. During the search, the Income Tax Department recovered a sum of ₹ 12.30 crores in cash apart from various incriminating documents from them. Out of the aforesaid amount, they have offered to pay tax on ₹ 10,49,06,782/- [7,47,65,916 +3,01,42,866] before the 2nd respondent, Income Tax Settlement Commission. 15. The 1st respondent in the respective writ petitions were issued earlier with two separate notices dated 20.11.2012 under Section 153 A of the Act for the Assessment Years 2006-07 to 2011-12. 16. These notices als ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ore the Assessing Officer, the manner in which such income has been arrived, the additional amount of income tax payable on such income and such particular as may be prescribed. Such application shall be disposed in the manner provided in the Act. 24 . The expression case means any proceeding for assessment under the Act, of any person in respect of any assessment year which may be pending before an Assessing Officer on the date on which an application under sub- section (1) of section 245 C is made. 25 . Thus, a composite application can be filed for settling the case by an assessee as is event from a reading of Section 245 of the Income Tax Act,1961 read with the definition of the word case in Section 245C of the Act. Sine qua-non for filing such application is true and full disclosure of the income which was not disclosed before the assessing officer. Additional income offered for settling the case should exceed ₹ 50 lakhs in case of an assessee where proceedings for assessment or re-assessment have been initiated under Section 153 A (1)(b), Section 153B(1)(b) or Section 153C of the Income Tax Act, 1961. In this case, notices were issued to the petitioner under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under Article 226 of the Constitution of India. Though, this Court exercise vide power Article 226 of the Constitution of India. its jurisdiction is narrow. 32. The court is really not concerned with the ultimate decision of the 2nd respondent, Income Tax Settlement Commission, but only with the decision-making process. The Court can interfere only where there is perversity and arbitrariness in the order impugned before it. 33. Question the regarding true and full disclosure of income for the purpose of settling the case before the 2nd respondent Income Tax Settlement Commission is a question of fact. The Income Tax Settlement is the final fact find authority. Therefore, to that extent, the impugned order settling the cases of the 1st respondent in the respective writ petition covering the period covered by section 153A of the Income Tax Act, 1961, there is no merit in the writ petition. 34. The petitioner has also not demonstrated any extraordinary circumstances, which warrants interference on the issues arising of the facts determined by the second respondent Income Tax Settlement Commission. 35. The other issue remaining point for consideration in these Writ Petition ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act of 2007 w.e.f. 1-6-2007 in which interest is required to be paid for maintainability of the application for settlement. 36. Dealing with a somewhat similar circumstances, in para 36 the Court posed the following question to itself which reads as under:- 36 . The question is - what happens in cases where 90% of the assessed tax is paid but on the basis of the Commission's order under Section 245-D(4) the advance tax paid turns out to be less than 90% of the assessed tax as defined in the Explanation to Section 234-B(1)? . 37. The Court answered the position as follow:- 37. As held hereinabove, under Section 245-C(1) read with Section 245-C(1-B)(ii) and Section 245-C(1-C)(b), the additional amount of income tax payable is to be calculated on the aggregate of total income returned and the income disclosed in the settlement application as if such aggregate is the total income. Thus, the scheme of the said sections is based on computation of total income and in that sense we have stated that such application for settlement is akin to a return of income. The said provision deals with total income . Thus, as stated above, Sections 234-A, B and C are applicable up ..... X X X X Extracts X X X X X X X X Extracts X X X X
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