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2022 (7) TMI 438 - HC - Income TaxApplication for settlement of cases u/s 245C - HELD THAT:- It is completely Unnecessary and beyond the scope of the commission to find fault or with the modus operandi of the assessee in arranging his tax liability, while deciding an application under Section 245D. In the present case, we are satisfied that the assessee has fully disclosed all the primary facts and produced the documents in support of the same. At the cost of repetition, all materials placed before the Commission are to be considered as per Section 245D (5). Therefore, we do not agree with the casual finding of the Learned Judge that the disclosure must be acceptable disclosure. It is relevant to point out that no new materials were produced by the department to enable the settlement commission to take a different view that there was no true and full disclosure. Rather, the department and the settlement commission have embarked upon to alter their earlier view or inference, which cannot be a reason to thwart the application as not maintainable. The paradox in the functioning of settlement commission, comprising of senior members from the department, deviating from the neutrality of a quasi-judicial authority, would have invited our much attention if it had not been abolished and replaced with interim board. As rightly contended by the learned senior counsel for the Appellant, ought to have gone into the merits of the contentions advanced on behalf of the appellant and rendered specific findings, more particularly, when the allegations of principles of natural justice and violation of the procedures as alleged. Even if the Learned Judge was to disagree with the contentions, all the contentions ought to have been discussed and specific findings ought to be given. Therefore, we have no hesitation to hold that the order has been passed in violation of the principles of natural justice and against the procedures prescribed under the Income Tax Act and hence, the order is liable to be set aside and remanded back for fresh consideration after giving opportunity to both the parties. Whether the Interim Board can now decide the matter? - Writ petition was pending when the Settlement Commission was abolished and Interim Board was brought into operation. This court is of the view that the restrictive circumstances under which an Interim Board can entertain an application, is applicable only when an application is filed afresh or pending and not applicable to cases where the High Court in exercise of its powers under Article 226 of the Constitution of India, set asides an earlier order and remands back the matter for fresh consideration. The powers of the High Court which emanate from the Constitution cannot be curtailed by a law made by the legislature, such law being subordinate to the Constitution. It is not out of place to mention here that it is evident from the press release which was followed by the order dated 28.09.2021, various High Courts had earlier issued directions to entertain the applications for settlement and such applications were also entertained. While so, the contention of the counsel for the department that the interim board cannot entertain the old application, cannot be accepted. Upon the matter being remanded, the application filed by the Appellant would have to be treated as a pending application and appropriate orders are to be passed after giving the appellant sufficient opportunity and by considering all the materials placed by him. Another point that was raised by the counsel for the department before us was that the pendency of the Appeal for the year 2013-14 would be an embargo, which we do not think so. The assessment order for 2013-14 was passed only on 20/06/2021 after the disposal of the Writ Petition. The appeal though has been preferred is yet to be numbered. Once the order of the Settlement Commission is set aside and the matter is remanded back, status quo ante is restored. The orders of assessment and the unnumbered appeal would become otiose. Therefore, this court has no hesitation in remanding back the matter to the Interim Board, which shall dispose off the application within a period of six weeks from the date of receipt of this order on merits and in accordance with law, after giving sufficient opportunity to the appellant and also by considering all the documents placed. Insofar as the attachment proceedings are concerned, the relief has become infructuous as the attachment was made before six years and maximum period for which such provisional attachment could be in force is only two years.
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