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2021 (5) TMI 332 - HC - Income TaxValidity of the application filed u/s 245(C) - consequential order passed by the Settlement Commission - maintainability of the writ petition filed by the Commissioner of Income Tax, challenging the order passed by the Settlement Commission - As contended that in the eventuality of no pendency of case during the relevant assessment year, the application under Section 245(C) of the Act is not maintainable before the Settlement Commission - HELD THAT:- In the instant case, the power of the Settlement Commission is well enumerated under Section 245C and 245D of the Act. The manner in which settlement is to be arrived is also contemplated under the Act. Certain preconditions are also stipulated. Thus, the Settlement Commission cannot enter into the venture of assessment, which is the power of an Assessing Officer under Section 153A. Therefore, this Court is of an opinion that in the absence of any true and full disclosure, the Settlement Commission cannot go beyond the scope of Section 245C of the Act and adjudicate the additional income found by the Department during seizure, which is admittedly not disclosed in the application filed at the first instance by the assessee. Assessee in the present case filed statement of facts in vide two letters dated 10.03.2008 and 14.03.2008, offering additional income and the Settlement Commission also proceeded and settled the issues, it is to be inferred that the assessee at the first instance, had not disclosed true and full income and therefore, the subsequent additional statements cannot be relied upon in order to satisfy the requirements of the provisions u/s 245(C). The principles involved in Section 245(C) of the Income tax is that the person approaching the Settlement Commission should file an application with clean hands and surrender the full and true disclosure of income. Only in the eventuality of proving the genuinity, then alone the Settlement Commission is empowered to settle the disputes and not otherwise. Thus, the prime consideration and pre-condition for entertaining an application is true and full disclosure of income and subsequent adding, deletion or insertion would dis-entitle the Settlement Commission from entertaining an application. In such an event, the genuinity of the assessee became questionable and the matter is to be sent back for assessment before the jurisdictional AO This being the scope of the provision under Section 245(C) for entertaining an application for settlement. In the present case, the Settlement Commission exceeded its jurisdiction by settling the issues, even after filing of the additional statement of facts by the assessee on two occasions, providing further disclosure of income. The petitioner could able to establish that the Settlement has caused prejudice to the interest of the Revenue and therefore, regular assessment is to be made to cull out the truth and proceed with the matter in the manner known to law.
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