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2014 (2) TMI 896 - HC - Income TaxPower of Settlement Commission u/s 245H of the Act - Immunity from imposition of penalty and prosecution – Held that:- The criticism levelled by the revenue against the majority opinion of the ITSC granting immunity to the assessee is well-founded - Immunity can be granted only within the parameters of Section 245H(1) which requires full and true disclosure of income and co-operation from the assessee in the proceedings before the ITSC – Co-operation implies an act of volition on the part of the assessee - the present assessee “co-operated” in the proceedings before the ITSC only when faced with the reports submitted by the CIT – The ITSC was not justified in taking a charitable view towards the assessee - assessee did not make a full and true disclosure in the settlement application - it waited till the ITSC called for reports from the CIT which reiterated the facts established by the seized material. There was no spirit of settlement that ought to have been exhibited by the assessee in the application filed before the ITSC - it is not enough if it is shown in proceedings before the ITSC after being confronted with adverse reports, to which it had no answer – Relying upon Ajmera Housing Co-operation and another v. CIT [2010 (8) TMI 35 - SUPREME COURT OF INDIA] - the fact that the assessee kept revising its application for settlement by disclosing higher income in the revised applications established that it did not make a full and true disclosure of income which it did not disclose to the assessing authority - the assessee cannot be said to have “co-operated” in the proceedings before the ITSC - The assessee ought to have offered the entire amount being the bogus purchases of cement and steel - It was only at that stage, when cornered and when it was unable to rebut the evidence and the facts established by the evidence, that the assessee came forward with the additional income which when added in the settlement applications – thus, the assessee has failed to satisfy the twin conditions of Section 245H (1) and was, therefore, not entitled to the immunity. Power to review the order of ITSC – Held that:- The decision in R.B. Shreeram Durga Prasad v. Settlement Commission [1989 (1) TMI 4 - SUPREME Court] followed - The sole overall limitation upon the Commission 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 – the order of the ITSC (majority view) is contrary to the provisions of Section 245H(1) of the Act – Decided in favour of Revenue.
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