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TMI BlogCases before the Settlement Commission: Full and True disclosure of Income u/s 245C and Immunity u/s 245HX X X X Extracts X X X X X X X X Extracts X X X X ..... ken in the cases which had gone before Settlement Commission. Besides, certain issues germane to the proceedings before the Commission appear to have escaped attention of the officers concerned. 2. In light of the above and with a view to ensure appropriate action in such cases, attention of all concerned is invited to the following important issues: i. Section 245C(1) of the IT Act, 1961 (the Act) lays down that an assessee may at any stage of a case relating to him make an application containing a full and true disclosure of his income which has not been disclosed before the A.O. 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 t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gure of disclosure, have been able to successfully scuttle investigation by the A.O., delayed the payment of tax on the undisclosed/ additional income and got away with immunity also on the amount of originally disclosed before the Commission. Thus the assessee's appear to have succeeded in obtaining the benefits in violation of letter and spirit of the statute regarding basic requirement of true and full disclosure. iv. It has also been noticed that the assessee's admit additional income for one of two assessment years in the SOF, but include many other years for which no additional income is offered for settlement. This pre-empts the Department from making enquiries even in respect of those years for which no additional income w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r XIX - A does not contemplate revision of income so disclosed in the application. Disclosure of additional undisclosed income in the revised annexure alone was sufficient to establishes that application made by the assessee u/s 245C(1) could not be entertained as it did not contain a full and true disclosure of its undisclosed income and the manner in which such income was derived. [Ajmera Housing Coporation vs. CIT 326 ITR 642 (SC)] * If the disclosure is not true and complete the Settlement Commission has no power to quantify income [G. Jayaraman vs. Settlement Commission, 1960 Taxman 552(Mad)] * Once Settlement Commission found that applicant has not made true and full disclosure, the application itself becomes not maintainable an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e had made full and true disclosure of its income and the manner in which the income was derived and therefore the High Court can examine the legality of the order in writ jurisdiction. [CIT vs. SC 246 ITR 63(Bom.)] ix. It has also been reported that in several cases, submissions of CsIT (DR) are not taken note of by the Commission despite specific requests. x. There is also lack of prompt and proper action on the part of officers in the assessment side while defending the cases before the Commission and/or after receipt of its orders. There is undue delay in responding to the applications, extending requisite support to DRs by responding to their query properly and promptly and examining the orders of the Commission for appropriate act ..... X X X X Extracts X X X X X X X X Extracts X X X X
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