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TMI Blog1992 (7) TMI 349X X X X Extracts X X X X X X X X Extracts X X X X ..... f construction activities and manufacturing gray boxes and gray boards and bricks and plastic items and of transport and supervision and as engineers. The said firms had as their partners one or some of the following persons or their near relatives Percentage of profit 1. Kanubhai P. Patel 29 2. Manibhai P. Patel 29 3. Satishchandra R. Desai 27 4. Shantilal N. Patel 11 5. Jaykant A. Patel 4 The constitution of the said firms was arrived at in such a manner that the family of each of the aforesaid five persons would be a sharer in the profits of the said firms substantially as set out above. The names of the said partnership firms were as follows : 1. Pioneer Builders. 2. Rolan Construction Company. 3. Parul Corporation. 4. Paras Packaging Industries. 5. Swadeshi Industries. 6. Pioneer Brick Works. 7. Patel Desai and Company. 8. Premier Paper Industries. 9. Pionee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... irms before the Settlement Commission under section 245C of the Act. These applicants are six petitioners in this group of seven petitions. On November 7, 1990, a notice was issued by the Income-tax Officer to the association of persons for reassessment under section 148 for the assessment years 1982-83 and 1983-84. Thereafter, the association of persons consisting of five persons Also moved the Settlement Commission by an application under section 245C on December 31, 1990, and the last application for settlement was moved before the Commission by Kanubhai P. Patel, individual, on February 15, 1990. Thus, before the Settlement Commission, there were on the anvil, in all, eight applications moved under section 245C, six by the firms, the seventh by the association of persons and the eighth by Kanubhai P. Patel in his individual capacity. So far as the remaining five firms were concerned, they did not file such applications because the additional amount of income-tax payable on the income disclosable by them in such applications presumably might not have exceeded ₹ 50,000 for each of these firms and hence they were not before the Commission. So far as the aforesaid eight appli ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... petitions are moved against the common order of the Commission which is held to be a Tribunal by the Supreme Court in CIT v. B. N. Bhattachargee [1979] 118 ITR 461 and that the decision of the Tribunal cannot be challenged by way of a writ petition under article 227 of the Constitution before the High Court for two reasons. Firstly, such proceedings would be barred by section 245-I of the Act and, secondly, they would be barred on account of the fact that the order of the Commission can be made the subject matter of an appeal by special leave under article 136 of the Constitution and, according to the learned advocate of the respondents, that would be the only remedy available to the petitioners if at all they are aggrieved by the order of the Settlement Commission and they cannot move a writ petition under article 227 of the Constitution before this court. Mr. Kaji for the petitioners has vehemently opposed this preliminary objection. In our view, there is no substance in this preliminary objection based on the aforesaid two grounds. So far as the first ground of the preliminary objection is concerned, it has to be stated only to be rejected. Section 245-I reads as under : ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aggrieved by such orders cannot approach the High Court under article 227 and that an appeal under article 136 by way of special leave is the only remedy in such cases. Mr. Shelat also invited our attention to the decision in the case of CIT v. Surender K. Shah [1990] 181 ITR (St.) 20 (SC) for showing that, against the Settlement Commission's order, a special leave petition can be moved before the Supreme Court. There cannot be any dispute on this aspect. However, the moot question is whether the remedy under article 227 is not available to a party to challenge the order of the Settlement Commission and its only remedy is to go under article 136. Such type of decision is not rendered by the Supreme Court in any of the aforesaid cases on which strong reliance was placed by Mr. Shelat in support of the second ground of preliminary objection. He also invited our attention to the decision of the Delhi High Court in the case of Deen Dayal Didwania v. Union of India [1986] 160 ITR 12, wherein the Delhi High Court took the view that the High Court cannot direct the Settlement Commission to decide pending settlement applications expeditiously as it is for the Settlement Commission to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... maintainable under section 245C, as we have noted earlier, the Commission would not have summarily rejected these applications only because, according to the Commission, the association of persons was an invention. In fact, the submission made by Mr. Thakkar who appeared for the petitioners before the Commission was that even if the Commission did not consider the application of the association of persons as acceptable on the ground that it was not a genuine entity, the Commission could proceed with the other applications where the status of the partnership firms was not in dispute. This argument was repelled by the Commission by holding as under : Implicit in the stand of the applicants and the arguments of Shri Thakkar is the fact that the association of persons is an afterthought. In the scheme of settlement, the applicant is expected to make a clean breast of his affairs and come out with a true and full disclosure. Persons taking contradictory alternative pleas forfeit the right to have their cases settled by the Settlement Commission. It is difficult to appreciate this line of reasoning. It reflects a patent error on the part of the Commission on the qu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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