TMI Blog2012 (12) TMI 1020X X X X Extracts X X X X X X X X Extracts X X X X ..... even at the stage of first screening under section 245D(1) of the Act. We are not convinced with the petitioners' contention that if such application was allowed to be proceeded, the petitioners would have produced additional materials in support of the requirement that the petitioner made true and full disclosure of undisclosed income and the manner of deriving the same. The petitioners were required to make an application and make such declarations as required under section 245C(1) of the Act. They could not have hoped for or insisted upon a second innings to do so beyond the stage of section 245D(1) of the Act - petition dismissed. - Special Civil Application Nos. 12060, 12061 & 12063 of 2012 - - - Dated:- 4-12-2012 - AKIL KURESHI AND MS. SONIA GOKANI, JJ. S.N. Soparkar and R.K. Patel for the Petitioner. Manish Bhatt and Ms. Mauna M. Bhatt for the Respondent. JUDGMENT Akil Kureshi, J. - These petitions arise out of common background. They have been heard together and are being disposed of by this common judgment. 2. For the purpose of this order, we may notice the facts as arising in Special Civil Application No.12060/2012. 2.1 The petitioner is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 12 by the Settlement Commission. The Commission vide its impugned order dated 8.6.2012 rejected the application of the petitioner on the ground that requirements of section 245D(1) of the Act were not fulfilled. It is this order of the Settlement Commission which the petitioner has challenged in this petition. 2.4 Before passing the impugned order the Settlement Commission heard the representative of the petitioner on the question of fulfillment of requirements of section 245C of the Act. The Commission noted that the petitioner was required to make true and full disclosures of the income as also the manner in which such income was derived. The Commission formed an opinion that the petitioner had not made true and full disclosures. Subsequent question of the manner in which such income having been derived therefore, cannot be examined. On its belief that the petitioner did not fulfill the requirements of section 245C of the Act, the Commission rejected the application at the very threshold which has prompted the petitioners to approach this Court. 3. Material facts are common in all the petitions. 4. Learned senior counsel Shri S.N.Soparkar appearing for Shri R.K.Patel for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has come to certain factual findings, scope of interference by this Court would be narrow. Counsel further submitted that Commission had every authority to examine the validity of the statements made by the assessee. If at the very threshold it was found that such application did not satisfy the legal requirements, it was open for the Commission to reject the same without any further consideration. In the present case the Commission came to the conclusion that the petitioners had not made true and full disclosures about their income. Counsel relied on the following decisions: (1) In case of Jyotendrasinhji v. S.I. Tripathi [1993] 201 ITR 611/68 Taxman 59 (SC), in which the Apex Court held that though the order of Settlement Commission has been given finality, such finality would not bar a writ petition before the High Court or jurisdiction of the Supreme Court, nevertheless, the scope of judicial review would be restricted to considering whether order is contrary to any provisions of the Income Tax Act. (2) In case of Ajmera Housing Corpn. v. CIT [2010] 326 ITR 642/193 Taxman 193 (SC), wherein the Apex Court put considerable stress on the requirement of an assessee approachi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the application was under; or (ii) in respect of an application referred to in sub-section (2A) which is deemed to have been allowed to be proceeded with under that subsection, on or before the 7th day of August, 2007, call for a report from the Commissioner, and the Commissioner shall furnish the report within a period of thirty days of the receipt of communication from the Settlement Commission. (2C) Where a report of the commissioner called for under sub-section (2B) has been furnished within the period specified there in, the Settlement Commission may, on the basis of the report and within the period of fifteen days of the receipt of the report, by an order in writing, declare the application in question as invalid, and shall send the copy of such order to applicant and commissioner : Provided that an application shall not be declared invalid unless an opportunity has been given to the applicant of being heard: Provided further that where the commissioner has not furnished the report within the aforesaid period, the Settlement Commission shall proceed further in the matter without the report of the Commissioner. (3) The Settlement Commission, in respect of- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (1) of section 245D provides that, on receipt of an application, the Settlement Commission shall, within seven days of receipt, issue a notice to the applicant requiring him to explain why such an application made by him be allowed to be proceeded with. On hearing the applicant, the Settlement Commission shall, within fourteen days from the date of the application, by an order in writing either reject the application or allow the application to be proceeded with. Proviso to sub-section(1) of section 245D provides that where no order has been passed by the Settlement Commission as aforesaid, the application shall be deemed to have been allowed to be proceeded with. 8. Under sub-section (1) of section 245D thus, the first stage of scrutinising the application of settlement made by an assessee is envisaged. The statute does not provide for grounds on which Settlement Commission may reject such an application or allow the application to be proceeded with. There are however, sufficient indications in the statute itself what would be the purpose and nature of scrutiny of Commission at that stage. As already noted, sub-section(1) of section 245C an assessee may make an application for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Act, if the Commission on a summary inquiry comes to the conclusion that an application filed by the assessee under section 245C(1) of the Act does not fulfill the legal requirements, it would be within the jurisdiction of the Commission to reject the same. However, if it is allowed to be proceeded with, such decision would be tentative in nature. 10. Section 245D(2B) provides that the Settlement Commission in respect of an application, which is allowed to be proceeded with under sub-section (1), within thirty days from the date on which the application was made, call for a report from the Commissioner, and the Commissioner shall furnish the report within a period of thirty days of the receipt of communication from the Settlement Commission. Sub-section(2C) further provides that where a report of the Commissioner under sub-section (2B) has been furnished within the prescribed period, the Settlement Commission may on the basis of the report within fifteen days of the receipt of the report by an order in writing, declare the application as invalid. Proviso to sub-section(2C) provides that no such declaration shall be made unless an opportunity is provided to the assessee of b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Commission examined such questions on the basis of disclosure made by the applicants and the supporting material produced along with the applications, we do not see that the Commission committed any legal error. As already noted, it was well within the jurisdiction of the Commission at the stage of sub-section (1) of section 245D of the Act to examine whether application for settlement fulfills the statutory requirements contained in sub-section (1) of section 245C of the Act. At this stage we may refer to the decision of the Supreme Court in case of Ajmera Housing Corpn. (supra). It was a case in which the assessee had made certain disclosures in the initial application under section 245C(1) of the Act. Such disclosures were however, revised and additional income was disclosed in the revised annexures. The Apex Court held that the assessee had no right to revise an application under section 245C(1) of the Act and further that such revised annexure making further disclosure of undisclosed income alone was sufficient to establish that the initial application made by the assessee could not be entertained as it did not contain true and full disclosure of the undisclosed income and th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he total absence of any material with which we are confronted in this case. 10.3 The provision under section 245C(1) of the Income-tax Act 1961 is quoted hereunder : 245C[(1) An assessee may, at any stage of a case relating to him, make an application in such form and in such manner as may be prescribed, and containing a full and true disclosure of his income which has not been disclosed before the Assessing Officer, the manner in which such income has been derived, the additional amount of income-tax payable on such income and such other particulars as may be prescribed, to the Settlement Commission to have the case settled and any such application shall be disposes of in the manner hereinafter provided. . . . . . It was further observed that : There is not even a whisper to suggest that at the stage of admission of an application, the issue of the manner in which such income has been derived could be left open or ignored. This is, in fact, basic eligibility criterion. It was concluded that : 20. Thus we hold that the admissibility of an application under section 245C(1) of the Income-tax Act, 1961 and 22C(1) of the Wealth tax Act, 1957 is dependent upon ful ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xercising powers of judicial review against the orders of the Settlement Commission, in our opinion, would not be of much difference even where an order of the Settlement Commission passed at the interim stage is called in question. Settlement Commission is a special body created and constituted for a special purpose. The order that the Settlement Commission may pass though is binding between the parties, does not lay down a ratio or a precedent. 18. In case of Saurashtra Cement Ltd. v. Commissioner of Customs 2012(3) G.L.H. 235, scope of judicial review by the Supreme Court against the order of Settlement Commission was examined in light of various decisions of the Apex Court and following observations were made : 15. It is well settled that no finality clause in a statute would oust the jurisdiction of the High Court under Article 226 of the Constitution or that of the Supreme court under Article 32 or 136 of the Constitution. Nevertheless, the parameters of judicial intervention in a decision rendered by an administrative tribunal are well recognised and well laid down. Ordinarily, the court would interfere if the Tribunal has acted without jurisdiction or failed to exerc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... shall not ordinarily interfere with a policy decision of the State. Social and economic belief of a judge should not be invoked as a substitute for the judgment of the legislative bodies. (See Ira Munn v. State of Illinois.) 17. Despite such narrow confines of judicial review of the decision of the Settlement Commission, it is undeniable that the jurisdiction under Article 226 of the Constitution is not totally ousted. In a given situation if the Settlement Commission has taken into consideration irrelevant facts and such consideration has gone into its decision-making process resulting into grave injustice and prejudice to the party then within the narrow confines of the judicial review, interference would still be open. 19. When the Settlement Commission examines an application in terms of statutory powers and finds that such application does not satisfy the legal requirements, as contained in section 245C(1) of the Act, in our view, unless such decision of the Commission is contrary to the statutory provisions contained in the Act, interference in exercise of writ jurisdiction under Article 226 of the Constitution of India would not be warranted. The counsel for the peti ..... 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