TMI Blog2021 (12) TMI 993X X X X Extracts X X X X X X X X Extracts X X X X ..... reading the said communication dated 27/30th December, 2013 it is clear that is not a report in terms of sub Section 3 of Section 245D which mandates that Commission should direct the Commissioner to submit a report which has never been done by the Commissioner. All those which we have pointed out above would go to show that the order passed by the Commissioner flows from serious illegality and irregularity calling for interference. That apart the alleged report dated 27th December, 2013 as admittedly been filed only on 15th January, 2014, the date on which the application was finally been heard by the Commission and orders were reserved. The assesee had stated that on 14th February 2014 and 24th February, 2014 they have filed their objection to the said letter which has not been dealt with by the Commission not even referred to by the Commission. Thus we can safely hold that there has been serious violation of principles of natural justice. On all the above grounds we are fully satisfied that the order passed by the Commission calls for interference and consequently we are required to interfere with the order passed by the learned Single Judge dismissing the writ petition. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... report in terms of Rule 9 of the Settlement Commission Procedure Rules was filed on 7th February 2008 and taking into consideration of the said report the Commission proceeded to decide the matter. On going through the order passed by the Commission we find that the commission has referred a communication sent by the assessing officer to the Commissioner of Income Tax dated 27/30th December 2013 and referred the same as a report which have been filed before the Commission on 15th January 2014, the date on which the application was finally heard by the Commission. The assessee appears to have filed their objection / response to the said communication vide letters dated 14.2.2014 and 24.2.2014 contending that the said communication dated 27/30th December, 2013 cannot be taken as a report, at best it can be only a communication. Apart from that assessee had also raised certain issues on the merits of the matter which had been pointed out in the said communication. It may not be necessary for us at this juncture to go into the other factual details since the primary ground on which the writ petition came to be filed is on the ground that the order passed by the Settlement Commission vi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he assessee before the Commission did not make a matter covered by the application for settlement. Further it is submitted that the learned Writ Court ought not to have seen that the assessee had stated before the Commission that the said advances of ₹ 6.97 crore has become time barred. It was factually incorrect and has also made factual and legal submissions in respect of such submission and to demonstrate that the said advances unilaterally transferred to reserve and surplus on March 31, 2000 had no tax implication for the assessee. Further the communication sent by the assessing officer dated 27/30th December, 2013 was an internal communication between the assessing officer and the Commissioner of Income Tax with regard to the issues on which investigation under Section 245(3) of the Act should have been sought for by the revenue before the Commission and, therefore, the said communication dated 27/30th December, 2013 is not a report called for by the Commission. Further it is contended that the order passed by the commission is a non speaking order, without having due regard to the submissions made by the assessee more particularly the objections which they have fil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... position of the scope of this Court under Article 226 of the Constitution to interfere with the orders passed by the Settlement Commission. This issue is no longer a res integra and one of the decisions in the case of Jyotendrasinhji Vs. S.I. Tripathi reported in [1993] Vol 201 ITR 611 (SC), wherein the Hon ble Supreme Court emphasized that the only ground upon which an order passed by the Settlement Commission can be interfered with is that the order of the Commission is contrary to the provisions of the Act and that such contravention has prejudiced the assessee. That apart the other ground should be that of bias, fraud or malice. In the said decision the Hon ble Supreme Court referred to the decision in R.B. Shreeram Durga Prasad Fatechand Nursingh Das Vs. Settlement Commission (IT and WT) reported in [1989] 176 ITR 169 (SC) wherein it was observed that Court should be concerned with the legality of procedure followed and not with the validity of the order and that the judicial review is concerned not with the decision but the decision making process. Thus it was held that the power exercised by the Court while examining the correctness of the order of the Settleme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... commission is to venture into any other matter relating to the case or in other words a matter not covered by the application then the pre requisite is an enquiry or investigation is required to be done. Thereafter on receipt of the report, the assessee/application is entitled for an opportunity to be heard in terms of sub Section 4 of Section 245D of the Act. The three issues namely the addition of about ₹ 6.97 crores, the rate of profit adopted by the Commission at 8% and the increase of the turnover are all matters which are not covered in the application. Thus if the Commission had to venture into this aspect merely because it was made as a statement of fact in the application or it was part of Rule 9 report, unless and until the procedure which is stipulated under the Act has been followed such a conclusion or a finding could not have been rendered by the Settlement Commission more particularly when those issues did not form part of this application. In fact, we could very well elaborate on the factual aspect in to the matter but we refrain from doing so as what we have called upon to decide is to whether there was an error in the decision making process and we are no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rder passed by the Commissioner flows from serious illegality and irregularity calling for interference. That apart the alleged report dated 27th December, 2013 as admittedly been filed only on 15th January, 2014, the date on which the application was finally been heard by the Commission and orders were reserved. The assesee had stated that on 14th February 2014 and 24th February, 2014 they have filed their objection to the said letter which has not been dealt with by the Commission not even referred to by the Commission. Thus we can safely hold that there has been serious violation of principles of natural justice. On all the above grounds we are fully satisfied that the order passed by the Commission calls for interference and consequently we are required to interfere with the order passed by the learned Single Judge dismissing the writ petition. In the result, the appeal is allowed. The order passed in the writ petition is set aside and the order passed by the Settlement Commission is quashed and the assessment is relegated back to the assessing officer to get assessment in accordance with law after effective opportunity to the assessee and not being influenced in any of th ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
