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TMI Blog2008 (4) TMI 242X X X X Extracts X X X X X X X X Extracts X X X X ..... ection 245C(1) for the assessment years 1990-91 to 2000-01 and proceed further for settlement of disputes. 2. The petitioner is a doctor. On a survey conducted on 06.02.2001 under section 133A of the Income Tax Act 1961, it was noticed that the petitioner had not filed return of income for the assessment years 1990-91 and 1994-95 during which period he had made huge investments in the construction of hospital cum hotel complex. Notice under section 148 of the Act was served on the petitioner on 29.03.2001 for the assessment years 1989-90 to 2000-01. The writ petitioner filed returns for the assessment years 1990-91 to 1995-96 on 15.03.2002 and for the assessment years 1996-97 to 2000-01 on 08.03.2002. The assessments for the years 1990-91 to 2000-01 except the assessment year 1997-98 was completed under section 143(3) read with 147 of the Act on 28.03.2002. The assessment for the year 1997-98 was completed under section 144 read with 147 of the Act on 05.03.2002 in the absence of return as the same was filed only on 08.03.2002. After the assessment was completed, the petitioner filed appeals before the Commissioner of Income Tax (appeals) for all the assessment years except the as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... port of the Commissioner of Income Tax has been referred to. 6. Per contra, the learned Senior Standing Counsel for the revenue contended that this writ petition will not lie against an order made by the Settlement Commission. The assessee having opted for settlement of disputes under Chapter XIX-A of the Act, now cannot turn back to challenge the order of the Commission. In this case the Commission is of the view that as the petitioner did not disclose full and true income and the source thereof, there is no complexity. Section 245D will come into play only if additional tax is paid. By so contending she prayed for the dismissal of the writ petition. 7. From the above rival contentions, the point to be resolved is whether the order of the Settlement Commission impugned in this writ petition is legally sustainable or not? 8. From the reading of section 245C(1) and its proviso along with section 245D(1) of the Act, it is clear that in order to have an order of admission of the case of the assessee to be settled before the Commission, the following conditions must be fulfilled: (a) There must be a 'case' as defined under section 245A(b) of the Act, relating to the assessee; (b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ollowed in disposal of the application has been stated in section 245D of the Act. The first sentence of the said section reads that "on receipt of an application under section 245C " the Settlement Commission shall call for the report from the Commissioner and on the basis of the materials contained in such report and having regard to the nature and circumstances of the case or the complexity of the investigation involved therein, the Settlement Commission, shall, wherever it is possible, by order, reject the application or allow the application to be proceeded with within a period of one year from the end of month in which such application was made under section 245C. The proviso appended thereto provides that the application shall not be rejected unless an opportunity has been given to the applicant of being heard. 11. It is apparent from the impugned order that the assessee-petitioner has not made full and true disclosure of the income before the Settlement Commission. Before the Settlement Commission, the petitioner filed a cash flow statement and contended that his mother Mrs. C. Seshammal had executed a will under which she bequeathed the sum of Rs.12.5 lakhs which has bee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gation and about the additional income tax payable on the disclosed income in the application. As an argument has been advanced before the Commission, the Commission was constrained to consider the same and observed that there is no complexity involved in that case. It is clear from the order of the Commission which states that the application was liable to be rejected on the sole ground of absence of full and true disclosure and also the complexity of the investigation involved in the case of the applicant. Hence, the finding arrived at on facts without the report of the Commissioner cannot vitiate the order for the reasons that in this case, one of the condition precedent for maintaining an application under section 245C, i.e., full and true disclosure of the income which has not been disclosed before the assessing officer, is lacking. The application itself cannot be termed as an application filed as required under section 245C read with the connected rules. The further fact in this case is that the appellant participated in the enquiry having full knowledge about the non receipt of the report from the Commissioner. Having so participated and obtained an adverse order, now it is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which the petitioner has not disclosed before the assessing officer and the manner in which it was derived could not be regarded as an application as required under section 245C(1), the contention that the impugned order is vitiated because of the jurisdictional error does not further the case of the petitioner. 17. The other contention is that the settlement commission, by the impugned order felt disabled to proceed solely on the alleged ground that the case lacked complexity of the investigation involved, is not correct as it is not the sole requirement of the provision. He relied on the decision of the Bombay High Court in the case of Centurion Bank of Punjab v. Income Tax Settlement Commission, [2007] 290 ITR 555. As stated above, the non disclosure of full and true income and it's source disentitled the petitioner to have his matter settled by filing an application under section 245C and the finding on the complexity was invited finding, as much was argued about complexity of the case before the Commission. The contention that the complexity of the investigation involved is not the sole criteria has to be rejected. Hence the reliance placed on the judgments are misplaced, wh ..... X X X X Extracts X X X X X X X X Extracts X X X X
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