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2021 (5) TMI 373 - HC - Income TaxSettlement application order u/s 245(C) - writ petitioner Commissioner of Wealth Tax said that there was no true and full disclosure by the 2nd respondent/assessee at the time of filing of an application under Section 245(C) - valuation of property under wealth tax assessment - as contended that the 2nd respondent had filed return of wealth taking into consideration the value of the property on various valuation dates and also taking into consideration several litigations and disputes, which were pending against the said property of their respective valuation dates - HELD THAT:- Without considering the additional wealth offered by the second respondent, which has been disclosed before the Assessing Officer, the Settlement Commission proceeded with the Settlement in violation of the provisions of the Income Tax Act and beyond the jurisdiction of the Settlement Commission. The revised statement of facts filed by the 2nd respondent on 22.02.2008 would be sufficient to arrive a conclusion that the 2nd respondent has not filed an application under Section 245(C) of the Act with true and full disclosure. The additional statement of facts given during the adjudication of the application before the Settlement Commission, raises a doubt regarding the true and full disclosure and further, the reasonings given by the petitioner/Income Tax Department in the matter of true and full disclosure were not considered by the 2nd respondent. The Settlement Commission without adhering to the provisions of the Income Tax Act and more specifically, in violation of the mandatory requirement for entertaining an application for settlement, passed the impugned order of settlement, knowing fully well that the 2nd respondent has not made true and full disclosure as mandated under Section 245(C) of the Income Tax Act. The petitioner / Commissioner of Income Tax in his written submission dated 20.02.2008, specifically made certain points, which would reveal that the non-disclosure of wealth by the 2nd respondent came to notice as soon as the application for NOC under Section 281 of the I.T.Act was made. Thus, there is nothing new disclosed by the 2nd respondent before the Settlement Commission. The 2nd respondent has come forward to offer additional wealth at the time of admission, which further reinforces the position that the disclosure made in the application is neither true nor full. The 2nd respondent has totally omitted to include another immovable property namely the plot at Royapettah in the statement of taxable wealth. Thus, the 2nd respondent failed to include this property in the return of wealth on the relevant valuation dates. Thus, omission of this property has also resulted in establishing that the disclosure made is neither true nor full. In view of the fact that the petitioner could able to establish that the 2nd respondent has not approached the 1st respondent / Settlement Commission with true and full disclosure of income and during the course of proceedings, offering additional income and findings of the Settlement Commission would also confirm the same, the said offerings of the additional income would be sufficient for the purpose of arriving a conclusion that the 2nd respondent filed an application under Section 245(C) of the Income Tax Act without disclosing true and full income. Thus, to comply with the requirements of the provisions of Section 245(C), there is every reason to believe that the 2nd respondent / assessee has not approached the Settlement Commission with clean hands and thus, the Department is empowered to go for further adjudication. This being the very purpose and object of the condition imposed under Section 245(C) of the Act, there is no reason for the Settlement Commission to get along with the application, which were not filed with true and full disclosure. Thus, the Settlement Commission has committed an error apparent and allowed the application filed by the 2nd respondent in violation of the provisions of the Income Tax Act.
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