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2018 (9) TMI 1033 - HC - Income TaxSettlement Commission order rejecting the settlement applications of the petitioners under Section 245D(1) - judicial review and exercise of writ jurisdiction while examining an order of the Settlement Commission - Scope and ambit of the enquiry at the stage of passing of the order under Section 254D(1) - Held that:- What is important and relevant at this stage is the observation of the Settlement Commission in the last sentence of paragraph 10 that “the very foundation of the surrender made by the two petitioners appears to be concocted story” etc. The word “appears” would reflect that the Settlement Commission had not reached or made any firm and final decision. The findings as per the observations were tentative and prima facie. In view of the legal position explained above, the settlement application at the initial stage cannot be dismissed when firm opinion as to frivolousness or concoction is lacking and merits of the settlement application cannot be ascertained and determined. Petitioner Nos. 4 and 5, have drawn our attention to returns filed by the two HUFs under Section 139 of the Act. It is submitted that ''other income'' mentioned in the returns included income earned by way of commission etc. from sale and purchase of property. In the settlement applications, fourth and fifth petitioner had given tabulations and details of the commission earned by them, which was duly corroborated and supported by evidence in the form of income tax returns filed by the petitioners prior to the date of search. Thus, the "prima facie" finding of the Settlement Commission that the fourth and the fifth petitioner had made a wrong declaration as to the manner of earning undisclosed income, is nothing but a surmise, which is incorrect and baseless. This contention is without prejudice to the contention of the fourth and fifth petitioners that the Settlement Commission had erroneously and contrary to law dismissed the application filed by the fourth and fifth petitioners on tentative opinion and 'prima facie' assumption, without forming a conclusive and final opinion. We allow the present writ petition and set aside and quash the impugned order of the Settlement Commission dated 8th May, 2017 rejecting the settlement applications of the petitioners under Section 245D(1) of the Act, with an order of remand to the Settlement Commission to pass a fresh order under the said section within a period of fourteen (14) days from the date a copy of this order is received by them or served on them by the petitioners or the Revenue, whichever is earlier. In order to cut delay, we direct the parties to appear before the Settlement Commission on 20th of September, 2018, when a date of hearing would be fixed.
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