TMI Blog2016 (7) TMI 960X X X X Extracts X X X X X X X X Extracts X X X X ..... ritten by the applicants making such revised offers. Copies of such letters dated 6.2.2014 written by the partners of the firm are produced on record. In such letters, it was conveyed that the applicants had filed a petition for settlement in which offered a sum of ₹ 7,75,000/- at the rate of 12 per cent on peak balance of funds deployed in money lending activity. It was further stated that “the applicant during the course of hearing under section 245D(4), in the spirit of settlement, agreed to further additional income of ₹ 39,12,667/- Similar declarations were made in the case of other applicants as well. It can thus be seen that these revised offers of tax was in the nature of spirit of settlement and cannot be seen in strict sense of abandoning initial disclosures and replacing the same by fresh disclosures on the basis of such revised offers. What in essence the assessee did was to raise their offers marginally to put an end to the entire dispute through settlement or in the spirit of settlement as is referred to in the said letter. This cannot be seen as accepting that original or initial declaration was not true and full disclosure thereby paving way for the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... requirement that a condition has to be incorporated in the order passed under sub-section of section 245 specifying that settlement shall be void if it is subsequently found that it has been obtained by fraud or misrepresentation of facts. (2) Commissioner of Income-Tax, Madras vs. Express Newspapers Limited, reported in 206 ITR 443 , the full bench of Supreme Court observed that the Settlement Commission while deciding whether to allow application to be proceeded with under section 245-(D)(1), the Commission would not look into material collected after date of filing of the application under section 245-C of the Act. 4. On the other hand, learned counsel Mr. Soparkar for the respondent assessee opposed the petitions contending that the Settlement Commission has given detailed reasons for passing the order. The consideration cannot be stated to be contrary to the provisions of the Act. The High Court has limited jurisdiction to interfere with the orders passed by the Settlement Commission. The decision of the Supreme Court in the case of Ajmera Housing Corporation (supra) does not lay down an inviolable rule that an offer made by the applicant for settlement cannot be imp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tions: 16. When examining the scope of judicial review in relation to a decision of Settlement Commission, we must further bear in mind that the Settlement Commission is set up under the statute for settlement of revenue claims. Its decision is given finality and it also has power to grant immunity from prosecution, of course, subject to satisfaction of certain conditions. The scope of court's inquiry against the decision of the Settlement Commission, therefore, is necessarily very narrow. The Apex Court in the case of State of U.P. And Another vs. Johri Mal reported in (2004) 4 SCC 714 observed that the scope and extent of power of judicial review of the High Court under Article 226 of the Constitution of India would vary from case to case, the nature of the order, the relevant statute as also other relevant factors including the nature of power exercised by the public authorities, namely, whether the power is statutory, quasi-judicial or administrative. It was observed that the power of judicial review is not intended to assume a supervisory role. The power is not intended either to review governance under the rule of law nor for the courts to step into the areas exclusiv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... khs and ₹ 30 lakhs respectively and the return offered by the applicants for tax was at the rate of 12.5 per cent thereof. These aspects we would refer to at a later stage when we deal with the Revenue's contention of lateron improving or revising offer of settlement would essentially demonstrate that initial disclosures were not full. However, at this stage of examining legality of the order passed by the Settlement Commission, we do not see that the Settlement Commission committed breach of any provisions of the Act. The Settlement Commission has examined material on record, given its own findings and made observations and come to conclusions which cannot be said to be perverse or that the order was contrary to any of the provisions of the Act. Recognising the limitation of judicial review by the High Court in exercise of writ jurisdiction against the order of Settlement Commission, we do not find any justifiable grounds for interference in this respect. 7. Coming to the question of disclosures, we may notice that under section 245-C of the Act, an assessee at any stage of a case relating to him is allowed to make application for settlement in a prescribed form which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... order was challenged by the Commissioner before Bombay High Court. Aggrieved by the order of High Court, the assessee had approached Supreme Court. The Supreme Court remanded the matter back before Bombay High Court for fresh consideration upon which Bombay High Court on 29.1.1999 passed an order remitting the matter back to the Settlement Commission against which the applicantsassessees approached Supreme Court. It was in this background that that the Supreme Court observed as under: 26........It is plain from the language of subsection (4) of Section 245D of the Act that the jurisdiction of the Settlement Commission to pass such orders as it may think fit is confined to the matters covered by the application and it can extend only to such matters which are referred to in the report of the Commissioner under subsection (1) of sub-section (3) of the said Section. A full and true disclosure of income which had not been previously disclosed by the assessee, being a pre-condition for a valid application under Section 245C(1) of the Act, the scheme of Chapter XIX-A does not contemplate revision of the income so disclosed in the application against item No.11 of the form. Moreove ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... disclosure of the income must be made at the initial stage and large scale remissions in such disclosure itself would show that the initial disclosures were not true. 11. However, the facts of the present case are somewhat different. The applicants had initially offered on money rotation of ₹ 25 lakhs, ₹ 21 lakhs and ₹ 30 lakhs respectively and income at the rate of 12.5 per cent thereof by way of interest earned which during the course of assessment proceedings was revised to ₹ 50 lakhs, ₹ 50 lakhs and ₹ 75 lakhs respectively with rate of return at 15 per cent. With respect to revised rate of return, even counsel for the Revenue would not be in a position to argue that the same would form part of declaration of two incomes since whether rate of return should be estimated to 12.5 per cent or 15 per cent would be would be substantially in the realm of estimation of not profit. He would however, strenuously contend that revised declaration of on money should be enough to establish that initial disclosures made by the assessees were not full or true disclosures of such income. In this context, we had called for the letter written by the applicant ..... X X X X Extracts X X X X X X X X Extracts X X X X
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