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2024 (4) TMI 464 - HC - Income TaxValidity of order passed by the Income Tax Settlement Commission [ITSC] - “full and true” disclosure of its income or not? - manner of disclosure made by the respondent and insofar as it related to the purchase of a land parcel admeasuring 20 acres - petitioner principally asserts that since the respondent had failed to surrender the amount representative for the aforenoted transaction to tax in the statement filed before the ITSC, the acceptance of settlement is clearly vitiated and the order passed by the ITSC liable to be quashed on this ground alone. HELD THAT:- The procedure as contemplated under Chapter XIX-A does not detract from the right of an assessee to question an addition or view that may have been taken by the taxing authorities - an addition suggested or a view taken with respect to a particular item of income is incorrect or flawed. What the assessee is essentially doing in such a scenario is calling upon the ITSC to examine all such questions and render its decision, enabling the assessee to obtain closure of all disputes. Viewed in that light, it would be wholly incorrect for the writ petitioner to assert that the respondent had failed to make a “full and true” disclosure. What the law proscribes is an applicant seeking to either amend an application or taking contrarian positions in proceedings before the ITSC. As was explained by the Supreme Court in Ajmera Housing [2010 (8) TMI 35 - SUPREME COURT], the sine qua non for a settlement order being entered is a “full and true” disclosure of income being made by the applicant. As the Supreme Court explained, what is impermissible is a revision of a disclosure. A particular contention with respect to taxability and which is made in order to invite a conclusive pronouncement from the ITSC cannot possibly be viewed as a revision of the application made. In our considered opinion, therefore, in the facts of the present case, the test of “full and true” disclosure had clearly been met. We note that the ITSC while accepting the surrender of income, has not indicted the respondent-assessee. It has taken note of the perceived conflict in versions which were alluded to by the Commissioner and the respondent having been unable to proffer a satisfactory explanation. It had, however, and for the purposes of a holistic examination, voiced its doubts and confronted the respondent- assessee seeking its unequivocal stand in respect of the transaction relating to sale of immovable property. It is at that stage that the respondent appears to have offered to voluntarily surrender the said amount and thus agreeing to the same being subjected to tax. While ultimately accepting the voluntary surrender, it was not the case of the ITSC that the respondent was guilty of suppression or falsification of facts. What appears to have ultimately weighed upon it was the imperatives of the controversy being resolved and the matter being conferred finality. Extent and intensity of judicial review which must govern while considering a challenge to orders passed by the ITSC -As relying on JYOTENDRASINHJI VERSUS SI TRIPATHI AND OTHERS [1993 (4) TMI 1 - SUPREME COURT] and KOTAK MAHINDRA BANK LIMITED VERSUS COMMISSIONER OF INCOME TAX BANGALORE AND ANR. [2023 (9) TMI 1231 - SUPREME COURT] we find ourselves unable to hold that the procedure adopted by the ITSC was either palpably incorrect or manifestly erroneous. The decision ultimately rendered by it also cannot possibly be characterized as being contrary to any provision of the Act. This was not a case where the respondent had failed to make a disclosure. Details in respect of the subject transaction were duly disclosed. This was therefore not a case where a “full and true” disclosure had not been made. The dispute essentially was with respect to the character of the receipt. The assessee had contested the position taken by the writ petitioner of the same being an accommodation entry. The ITSC has ultimately and upon due consideration of the rival stands as struck before it, exercised its adjudicatory function bearing in mind the larger purpose and intent of the settlement process. The same consequently merits no interference under Article 226 of the Constitution. WP dismissed.
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