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2024 (2) TMI 1239 - KERALA HIGH COURTSettlement application u/s 245C - Disclosure of full and true particulars of the income - Apportioning the undisclosed income in the hands of the petitioner and the Company - Commission, while rejecting the application of the petitioner, has held that the petitioner is the Director and Promotor/ Proprietor and Partner in multiple companies - During the course of search and seizure u/s 132, in the case of the petitioner/group, incriminating material evidencing unaccounted sales by the under-invoicing of sales receipts and collecting a part in cash was found - Commission was of the view that the petitioner had not adduced any reason or basis for apportioning the undisclosed income in the hands of the petitioner and the Company M/s Hailstone Innovations Private Limited during the course of the hearing, and no explanation came forward to explain the difference between the unaccounted sales calculated by the Principal Commissioner of Income Tax on the basis of the seized material and the unaccounted sale computed by the petitioner - Commission concluded that the petitioner had not come before the Board with clean hands and had not offered full and true particulars of his income. HELD THAT:- Section 245C(1) provides disclosure of full and true particulars of the income and the manner in which that income had been derived and apportioned in order to get the settlement. As the conditions prescribed in the provisions of Section 245C(1) have not been fulfilled in the case, the application was rejected by the impugned order. As petitioner submits that the petitioner had filed an objection to the report, and it was not considered by the Settlement Commission. The detailed reply has been placed on record. This Court has gone through the reply, but this Court has been unable to discern the basis for apportionment of unaccounted sales, unaccounted expenditures and unaccounted income between the petitioner and the Company. Thus the petitioner has not approached the Settlement Commission, with his application under Section 245-C, with clean hands and has failed to disclose true and correct facts. The provisions of Chapter XIX-A of the Income Tax Act 1961 are elaborate and provide a detailed mechanism for filing the application for settlement and its disclosure. The assessee is required to file an application under Section 245-C for settlement of disputes by the Income Tax Settlement Commission. Every order of settlement passed under sub-section (4) of section 245-D is conclusive as to the matters stated therein and no matter covered by such order shall, save as otherwise provided in Chapter XIX-A, be re-opened in any proceedings under the Act or under any other law for the time being in force. Section 245-L declares that any proceedings under Chapter XIX-A before the Settlement Commission shall be deemed to be a judicial proceeding within the meaning of Sections 193 and 228 for the purposes of Section 196 of the Indian Penal Code. Thus, Section 245 provides a complete code and prescribes finality in the orders passed by the Settlement Commission. As incumbent upon the assessee to approach the Settlement Commission with true and full disclosure of income and its sources. PCIT, in his report, has held that the petitioner did not have any basis for apportionment of expenditure and undisclosed income between him and the Company. Despite the opportunity having been granted to the petitioner during the hearing, the petitioner did not explain the basis for apportionment of unaccounted sales, expenditure and income between the petitioner and the Company. Commission has taken a correct view that the petitioner failed to disclose true and correct facts before the Commission in his application and did not approach the Commission with clean hands. No grounds to interfere with the reasoned order of the Commission.
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