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2007 (2) TMI 178 - HC - Income TaxChallenging the order passed by the Income-tax Settlement Commission u/s 245D(1) - lack of "full and true disclosure" - applications filed by the petitioner in respect of its own assessments and the assessments of the two merging companies - business of banking and related financial activities including leasing - HELD THAT:- The bare reading of section 245D(1) clearly indicates that there are three circumstances under which the Commission can entertain such applications, viz., (1) on the basis of the materials contained in the Commissioner's report, (2) having regard to the nature and circumstances of the case, or (3) the complexity of the investigation involved therein. In any event, we are clearly of the view that the Commissioner of Income-tax by his report, when called for by the Settlement Commission u/s 245D(1), has categorically held that the complexities of investigation are involved. Over and above, as pointed out by learned senior counsel for the petitioner that the assessment is spread over 15 assessment years; involving approximately 1,900 lease transactions; that the case requires examination and cross examination of multiple parties who are spread out across the length and breadth of the country; that the case involves nearly Rs. 420 crores in disputed additions and disallowances and that the documents are admittedly lost owing to fire, etc. It would clearly indicate that the complexities of investigation are involved in the case. Hence, the Settlement Commission had committed an error thereby coming to the conclusion that there are no complexities of investigation. As far as "full and true disclosure" is concerned, as pointed out by the Supreme Court in the judgment of Calcutta Discount Co. Ltd. v. ITO[1960 (11) TMI 8 - SUPREME COURT] merely remarking that there was no full and true disclosure by the petitioner would not be sufficient. It has to be justified on what basis and what particulars have not been disclosed etc. In the instant case, the Settlement Commission has merely observed that the petitioner has not made full and true disclosure. Even otherwise, if that be so, the Assessing Officer would not have been able to complete the assessment. Thus, rule is made absolute in terms of prayer clauses (a) and (b-ii). Respondent No. 3 is refrained from giving effect to and/or proceeding further by way of assessment/reassessment, recovery of demand or otherwise in any manner in respect of assessment years which are the subject-matter of the said settlement applications filed by the petitioner in respect of its own assessments and the assessments of the erstwhile 20th Century Finance Corporation Limited and 20th Century Capital Corporation Limited. Needless to say that all the applications moved by the petitioner before the Settlement Commission are restored to the file of the Settlement Commission with the direction to proceed further beyond the stage of section 245D(1) of the said Act. Rule is made absolute in terms of the above, however with no order as to costs.
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