9911796707
TMI Blog2024 (8) TMI 762X X X X Extracts X X X X X X X X Extracts X X X X ..... pt of gifts from friends and relatives. Such declaration has not been rebutted by the revenue by placing any additional facts to the contrary. In light of the same, conclusion of the Settlement Commission by accepting the explanation in the spirit of settlement cannot be faulted calling for interference in exercise of the limited jurisdiction. Insofar as the allied contention that the additional income disclosed is to be treated as income under the head referred to in Section 68 or 69 of the Act, the Settlement Commission has once again referred to the affidavit filed under Rule 8 and observed that the report under Rule 9 does not place any contra material. It is observed that the PCIT has not shown how the conditions prescribed under Section 115 BBE are met. In the present case, the conclusion arrived at by the Settlement Commission while accepting the contents of the affidavit filed under Rule 8 in the spirit of the settlement and refusing to accept the contention of having recourse to Section 115BBE cannot be permitted to be interfered with. As regards the declaration with respect to cash gifts, alleged non-disclosure of the same in the wealth tax returns of the previous years, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ant is an individual assessee and source of income was from salaries. The Department is stated to have carried out search under Section 132 of the Act on 20.03.2018, during which records/documents and jewellery worth Rs. 3,23,02,607/- is stated to have been seized. The statements under Section 132 (4) of the Act were also stated to have been recorded and during such search, an undisclosed income of Rs.2,16,00,000/- was stated to have been offered for tax, which statement was retracted subsequently vide letter dated 16.12.2018. 5. The additional income offered before the Settlement Commission was stated to be Rs. 2,20,00,000/-, which it is asserted to be an amount constituting cash gifts received from the relatives and well wishers during the Assessment Years 2012-2013 to 2016-2017. 6. It is further asserted that the cash payment made for purchase of jewellery from the vendors of Neerav Modi group was Rs. 2,16,00,000/-. 7. The petitioner had filed Affidavit under Rule 8 of the Income Tax Settlement Commission (Procedure) Rules, 1997 and declared that she had not maintained the details of cash gifts. 8. The PCIT also has filed a report under Rule 9 and raised various objections. 9. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Section 245-C, the Commission calls upon the applicant to explain the maintainability of such application and an order is passed either rejecting or allowing it to be proceeded. 14. The report of the Principal Commissioner/ Commissioner may be called for and on the basis of which the application may be treated as invalid or be allowed to progress upon report being filed and it may cause a further enquiry or investigation and direct report to be filed. The Settlement Commission may, in accordance with the provisions of the Act, pass such order as it thinks fit on the matters covered by the application. 15. Thus, it is clear that a procedure has been spelt out and the only limitation by way of statutory mandate is that the Settlement Commission must act in accordance with the provisions of the Act. The words in accordance with the provisions of the Act is to be construed as stipulating that the order passed ought not to be contrary to the provisions of the Act. 16. It is also necessary to note that the Settlement Commission has been conferred with powers under Section 245-F which are:- (a) all the powers which are vested in an income tax authority under this Act. (b) . exclusive jur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the assessment order. The making of the order of assessment is an integral part of the process of assessment. No such steps are required to be followed in the case of proceedings under Chapter XIX-A. The said Chapter contemplates the taxability determined with respect to undisclosed income only by the process of settlement/ arbitration. Thus, the nature of the orders under sections 143 (1), 143 (3) and 144 is different from the orders of the Settlement Commission under Section 245-D(4). (emphasis supplied) 19. The Division Bench of this Court in the case of N. Krishnan v. Settlement Commission reported in (1989) 180 ITR 585 (Karnataka) has dealt with the specific question of scope of interference under Article 226 of the Constitution against a decision of the Settlement Commission. It has been observed at para- 15 as follows:- 15 We are of the view that a decision of the Settlement Commission could be interfered with only:- (i) If grave procedural defect such as violation of the mandatory procedural requirements of the provisions in Chapter XIX-A and/or in violation of Rules of natural justice is made out; (ii) If it is found out that there is no nexus between the reasons given ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ved that discretion is conferred on the Assessing Officer to treat the unexplained income appropriately in the facts of the case. The observation made in para 3 of the said judgment would be of relevance and reads as follows: 3. Shri Ranbir Chandra, the learned Counsel appearing for the revenue, has urged that the Tribunal as well as the High Court were in error in their interpretation of Section 69. The submission is that once the explanation offered by the assessee for the sources of the investments found to be nonacceptable the only course open to the ITO was to treat the value of the investments to be the income of the assessee. The submission is that the word 'may' in Section 69 should be read as 'shall'. We are unable to agree. As pointed out by the Tribunal, in the corresponding clause in the Bill which was introduced in Parliament, the word 'shall' had been used but during the course of consideration of the Bill and on the recommendation of the Select Committee, the said word was substituted by the word 'may'. This clearly indicates that the intention of Parliament in enacting section 69 was to confer a discretion on the ITO in the matter of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n, where it thinks appropriate. Indeed, it would be difficult to predicate the reasons and considerations which induce the Commission to make a particular order, unless of course the Commission itself chooses to give reasons for its order. Even if it gives reasons in a given case, the scope of enquiry in the appeal remains the same as indicated above viz., whether it is contrary to any of the provisions of the Act. In this context, it is relevant to note that the principle of natural justice (audi alteram partem) has been incorporated in Section 245-D itself. The sole overall limitation upon the Commission thus appears to be that it should act in accordance with the provisions of the Act. The scope of enquiry, whether by High Court under Article 226 or by this Court under Article 136 is also the same whether the order of the Commission is contrary to any of the provisions of the Act and if so, has it prejudiced the petitioner/appellant apart from ground of bias, fraud and malice which, of course, constitute a separate and independent category. Reference in this behalf may be had to the decision of this Court in R.B. Shreeram Durga Prasad and Fatechand Nursing Das v. Settlement Comm ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
