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TMI Blog2021 (5) TMI 196X X X X Extracts X X X X X X X X Extracts X X X X ..... Sub-clause (1) contemplates that an assessee may, at any stage of a case relating to him, make an application in such form and in such manner, as may be prescribed, and containing a full and true disclosure of his income which has not been disclosed before the Assessing Officer, the manner in which such income has been derived, the additional amount of income-tax payable on such income and such other particulars, as may be prescribed, to the Settlement Commission to have the case settled. 4. Any application filed under Section 245C is to be considered by the Settlement Commission and the procedures contemplated under Section 245D is to be followed for the disposal of the application filed under Section 245C. 5. Various stages are contemplated and the prime consideration would be that the applications must be filed by the assessees with full and true disclosure of their income, which has not been disclosed before the Assessing Officer. 6. Thus, the provision makes it very clear that the application for settlement under Section 245C must contain the full and true disclosure of income, including the income, which were not disclosed by the assessees before the Assessing Officer. Thu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hout adjudicating such issues and therefore, the writ petitions are to be allowed. 14. The learned counsel, appearing on behalf of the first respondent, strenuously contended that the writ petitions are not maintainable. 15. No writ can be entertained against an order of Settlement Commission. The Settlement Commission adjudicated all the disputed issues and accordingly settled the matter and therefore, the petitioner cannot reopen the said concluded settlement by filing a writ petition under Article 226 of the Constitution of India. 16. The learned counsel appearing on behalf of the first respondent is of an opinion that the elaborate adjudication made by the Settlement Commission would reveal that the petitioner had submitted the application with full and true disclosure of income and there is no infirmity, as such. 17. It is further contended that the petitioner is not an aggrieved person in respect of the decision taken by the Settlement Commission. The Settlement Order was passed with reference to Section 245D(4) of the Act and such an order cannot be challenged by way of a writ petition. 18. In this regard, the learned counsel for the first respondent relied on the judgm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the writ petitions are not maintainable at all. The writ petitions are maintainable subject to the conditions that if the terms and conditions stipulated for filing an application under Section 245C of the Income Tax Act, are complied with. Thus, the very contention raised is to be rejected and the judgments cited are relatable to the facts of those cases. 24. No writ petition can be dismissed as not maintainable. The maintainability of the writ petition is to be considered with reference to the mixed question of law and fact, not merely on the ground that the Settlement Commission under the Income Tax Act, passed an order of settlement. Thus, the grounds raised for challenging the order passed by the Settlement Commission plays a pivotal role regarding the maintainability of the writ petitions. 25. The learned Senior Standing Counsel cited the judgment of this Court in the case of ACE Investments Limited vs. Settlement Commission reported in [2003] 264 ITR 571 (MAD). This Court, relying on the judgment of the Hon'ble Supreme Court of India, made an observation that "in so far as the power of this Court to exercise its jurisdiction under article 226 of the Constitution of I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... manner in which such income has been derived, the additional amount of income-tax payable on such income and such other particulars as may be prescribed, to the Settlement Commission to have the case settled and any such application shall be disposed of in the manner hereinafter provided". 29. A reading of the section portrays that it is a special provision contemplated enabling the assessee to settle the disputes in a peaceful manner with the Department, if they have come out with full and true disclosure of income. Such special provisions are enacted with an intention to provide an opportunity to the assessee to settle the issues, in order to rectify certain omissions, commission, mistakes etc., by the Assessee. In view of the complex nature of business by the Entrepreneurs, it is possible for such omission, commission, mistakes etc., intentionally or unintentionally, while filing income tax returns and furnishing other particulars. Thus, the legislative intention of Section 245C is to provide an opportunity to the Assessee to settle the issues, if they found some discrepancy or commissions, omissions in respect of the disclosures made before the Assessing Officer at the first ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed under Section 245C. The proviso clause stipulates that no application shall be made unless certain terms and conditions are fulfilled. But Section 245C(1) provides that it is a pre-condition to entertain an application that the assessee must disclose full and true facts and the evidence. Thus, Sub-clause (1) to Section 245C is the pre-requisite condition for entertaining the application under Section 245C. 32. A question arises who will be the deciding Authority for the full and true disclosure as contemplated under Section 245C. When an application is made by the assessee for settlement, then an assessee wil1 contend that the particulars provided in the application are the full and true disclosure. However, if the Department raises an objection regarding such full and true disclosure made by the assessee, then the second respondent- Settlement Commission is empowered to go into the facts and circumstances and find out the correctness or truthfulness of the disclosure made by the assessee. Therefore, it is always the mixed question of fact and law and in order to ascertain the entertainability of the writ petition, the High Court is bound to look into the facts as well as the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... econd respondent-Settlement Commission itself not able to form an opinion that the assessees have not kept proper books of accounts and the Department has taken the cash found at the time of search for two days and multiplied it by the number of days the Doctors worked to arrive at the suppressed income, then the second respondent- Settlement Commission ought to have considered these factors for the purpose of entertaining an application under Section 245C of the Income Tax Act. 38. The learned counsel for the first respondent-assessees made a submission that the first respondent-assessees themselves have admitted that they have not maintained proper books of accounts. 39. This being the case, the Department must be provided with an opportunity to go for a regular assessment. In the absence of any maintenance of proper books of accounts, admittedly, by the assessees, then it may not be possible even for the assessees to provide true and full disclosure of income. 40. At the outset, wherever there is a possibility of escapement or non-disclosure of certain income in a true and full manner, then the very purpose and object of the provision is to provide powers to the Assessing Off ..... X X X X Extracts X X X X X X X X Extracts X X X X
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