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TMI Blog2021 (4) TMI 1214X X X X Extracts X X X X X X X X Extracts X X X X ..... he process of adjudication of an application is in progress, the Authorities Competent are empowered to provide additional informations, report enabling the Commission to decide the issues in a proper perspective. The application filed under Section 245C is a special provision contemplated for the purpose of settling the cases in a speedy manner, only in the event of furnishing the true and full disclosure of income by an assessee along with the application. Doubts raised based on incriminating evidence by the Department and the particulars produced by the assessee are sufficient enough to form an opinion that there was no true and full disclosure. The true and full disclosure contemplated under the provision must be understood that the said disclosure must be an acceptable disclosure with reference to the documents and evidences available with the Department. The very settlement is a consensus to arrive a settlement and the parties are expected to be fair and honest. With this idea, the concept of true and full disclosure is contemplated in the provision. As far as the writ proceedings are concerned, such disputed facts and circumstances with reference to the documents a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ull and true disclosure of the income and the said fact was admitted by the Commission. While so, there is no reason to deviate the findings already arrived and form an opinion for the purpose of rejection of the application itself under Section 245(D)(4). The facts which are not controverted at three stages cannot be disputed at the final stage. In this regard, the learned counsel for the petitioner made a submission that the Authority, who investigated the matter, decided the issue finally and thereafter, the application was rejected. 3. However, the Authority concerned has not been impleaded in his personal capacity so as to raise an allegation of malafide. It is a established principle that in the event of raising the malafide allegation against the Authority, the said allegations are to be substantiated with reference to some evidence and documents and the Authority concerned must be impleaded as party in the writ proceedings in his personal capacity. General contentions or allegations made against the Authority cannot be entertained in the writ proceedings, in view of the fact that the petitioner has not substantiated any such allegations nor impleaded the Authority in his ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , Chennai, reported in [2018] 96 taxmann.com 571(Madras) . The relevant paragraphs are extracted hereunder: 16. It is to be noted at this juncture that the Settlement Commission is vested with power to reject the Settlement Application at three stages, as provided under Section 245D of the said Act. Rejection at the threshold is contemplated under Section 245D(1). Rejection after notice to the Revenue and on perusing the report filed by the Revenue could be made under Section 245D(2). While rejection under Section 245D(1) is a dismissal at the admission stage, rejection under Section 245D(2) is after notice to the revenue and on being satisfied with non disclosure of true and full undisclosed income. The third stage of rejection is contemplated under Section 245D(4), after directing the Revenue to furnish records and thereafter to conduct an investigation or enquiry. In all these stages, the satisfaction of the Commission with regard to true and full disclosure of income must continue to exist so as to carry over the proceedings from one stage to another and finally, to pass an order determining the terms of settlement as provided under Section 245D(6). In other words, tr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vision is accepted it would mean that after having allowed the applications to be proceeded with in terms of its order passed under Section 245D (1) of the Act, the ITSC cannot at this stage, after the report of the Commissioner has been submitted to it pursuant to an order under Section 245D (2C) of the Act, dismiss the application at all and that it would necessarily have to pass an order providing for the terms of settlement. However, this does not appear to be a correct understanding of the ambit of the expression 'such orders it deems fit.' 47. The Court is unable to understand how the above decision helps the Petitioners in support of their contention that the ITSC cannot at the stage of passing of final order under Section 245D(4) of the Act, reject an application for failure of the Applicant to make a full and true disclosure and the manner in which the undisclosed income was derived. 9. Relying on the said judgment, the learned Senior Standing Counsel is of the opinion that in the present case, the Settlement Commission formed an opinion that the petitioner had not made full and true disclosure with reference to certain incriminating evidence. Therefore, the o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as no true and full disclosure. The true and full disclosure contemplated under the provision must be understood that the said disclosure must be an acceptable disclosure with reference to the documents and evidences available with the Department. The very settlement is a consensus to arrive a settlement and the parties are expected to be fair and honest. With this idea, the concept of true and full disclosure is contemplated in the provision. 13. As far as the writ proceedings are concerned, such disputed facts and circumstances with reference to the documents and evidence cannot be adjudicated under Article 226 of the Constitution of India. Such an adjudication must be done by the Competent Authority by conducting a fullfledged enquiry/trial. In the event of rejection of an application filed under Section 245C, the matter shall go before the Assessing Officer before whom the assessee would get an opportunity to submit his explanation or documents or otherwise. Thus, the High Court under Article 226 cannot adjudicate or made any finding with reference to the disputed facts. Thus, the contention raised by the writ petitioner in this regard need not be considered. 14. The lear ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s is to be taxed u/s 28(iv). If it is stated that it is received gratuitous section 56 would apply in so far as the sum is credited and is in excess of ₹ 50,000. When this was clearly pointed out to the A.R., the A.R. argued that either the application be allowed or the matter sent back to the A.O. to follow the regular legal course. 14.The argument of the CIT(DR) that the entire sum of ₹ 53.60 crores should be added as income and subjected to tax is valid. The applicant has not discharged the onus that the sum is due to be paid to someone else and it is his liability. The letter given by the Company Secretary cannot be taken note of, because he was an erstwhile employee and presently, the Company is under liquidation. Only ₹ 4 crores (approx) is due from the applicant to RRIPL according to financial statements on regular contract. Thus, this sum which is credited in the P L Account by the applicant is to be brought to tax u/s 28(iv) and the applicant failed to disclose this sum. The records of RRIPL are not produced to show that entries are reversed and they have to receive the sum of ₹ 53.60 crores from the applicant. The investment in redeemable ..... X X X X Extracts X X X X X X X X Extracts X X X X
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