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2021 (5) TMI 196 - HC - Income TaxValidity of order of Settlement Commission u/s 245C - contention of the writ petitioner / revenue is that there is no true and full disclosure of income by the first respondent at the time of filing applications under Section 245C before the second respondent-Settlement Commission for settlement - HELD THAT:- Wherever there is a possibility of escapement or non-disclosure of certain income in a true and full manner, then the very purpose and object of the provision is to provide powers to the Assessing Officer to cull out the entire truth and proceed with regular assessment. If at all, the first respondent-assessees say that they themselves have admitted that they have not maintained any books of accounts, then it is to be construed that the regular assessment must be done in such cases. There is no possibility of providing true and full disclosure of income by the assessees. In either of the circumstances, when the Department could able to establish that the assessee has not come out with true and full disclosure of income by the assessees themselves admitted that they have not maintained any books of accounts, then in both the cases, there is no possibility of disclosure of full and true income and therefore, in such cases, the regular assessment alone would be a proper method and settlement cannot be made. The very contention raised on behalf of the first respondent that the first respondent-assessees themselves admitted the fact that they have not maintained any books of accounts is of no avail for the purpose of settling the issues and in such circumstances, all evidences collected by the petitioner-Department also to be enquired into by the Assessing Officer through a regular assessment. Perusal of the order passed by the second respondent- Settlement Commission, as rightly pointed out by the learned Senior Standing Counsel, the contentions of the Department made by the CIT(DR) in detail in respect of the income were not completely enquired into nor considered by the second respondent-Settlement Commission. Contrarily, the second respondent-Settlement Commission made a finding that the applicants have not kept proper books of accounts in all the three cases and settled the issues. Such a settlement is improper and not in consonance with the provisions of the Act. When the prerequisite condition contemplated in the provision stipulates that the person approaching the second respondent- Settlement Commission should come out with true and full disclosure of income and the Department could able to establish that there are many discrepancies in the matter of such disclosure made by the first respondent-assessees, then, there is no other reason whatsoever to settle the issues under the provisions of the Act and the mater must be placed before the Assessing Officer for assessment. This being the factum established, the petitioner- Department could able to prove that the orders impugned passed by the second respondent-Settlement Commission are not in consonance with the provisions of the Act. Thus, the impugned orders passed in Settlement Application are quashed.
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