GST Helpdesk   Subscription   New User   Login      
Tax Management India .com
TMI - Tax Management India. Com
GST - Acts SGST - Acts GST - FAQ GST Rates, Exemption CGST Notif. IGST Notif. Exempt Income Salary income
Extracts
Home List
← Previous Next →

2017 (6) TMI 787 - CALCUTTA HIGH COURT

2017 (6) TMI 787 - CALCUTTA HIGH COURT - TMI - Settlement commission order - Is the impugned order of the Settlement Commission vitiated due to jurisdictional errors in conduct of the proceedings before the Settlement Commission? - Held that:- In the present case, the assessee did not made a full and true disclosure of its income before the Settlement Commission. Such is the finding of the Settlement Commission. Such finding has not been substantiated to be perverse or to be suffering from such .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

the Settlement Commission has not been established to be contrary to the provisions of the Income Tax Act, 1961. - In the present case, the impugned order is well-reasoned. It is not alleged that, the impugned order suffers from the vice of bias or is vitiated by fraud or is actuated by malice. No part of the impugned order has been substantiated to be perverse. The Settlement Commission has noted three instances where the petitioner did not make full and true disclosures of its income. Even .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ebangsu Basak, J. The petitioners have assailed an order of the Settlement Commission dated January 24, 2017. Learned Senior Advocate for the petitioners has submitted that, the Settlement Commission did not adhere to the scheme laid down under Chapter XIXA of the Income Tax Act, 1961 in dealing with and disposing of the application for settlement made by the assessee. He has submitted that, an assessee is entitled to approach the Settlement Commission only once. The purpose of a settlement is t .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

cess of settlement contemplated under the various provisions of Chapter XIXA of the Income Tax Act, 1961. The impugned order of the Settlement Commission does not return a finding as to the quantum of tax which the assessee is liable to pay. Not having arrived at the quantum of tax liability of an assessee and not having asked the assessee to pay the same, according to him, the Settlement Commission had failed to exercise jurisdiction vested in it by law. According to him, the Settlement Commiss .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ed that, the Writ Court is concerned more with the decision making process rather than the decision itself. In the present case, according to him, the decision making process of the Settlement Commission stands vitiated as the Settlement Commission did not adhere to the provisions of Chapter XIXA of the Income Tax Act, 1961. He has referred to the four orders passed by the Settlement Commission in the settlement proceedings. Referring to the first order dated September 15, 2015 of the Settlement .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

for the petitioners has submitted that, the petitioners were not given a copy of the report noted in such order. Referring to the third order dated September 2, 2016 of the Settlement Commission, learned Senior Advocate for the petitioners has submitted that, the Settlement Commission did not adhere to the provisions of Section 245D(3) of the Act of 1961. It did not call for the records from the Principal Commissioner or the Commissioner. The records do not show that the Settlement Commission ha .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

arned Senior Advocate for the petitioners has submitted that, the Settlement Commission did not adhere to Section 245D(4) or Section 245D(5) of the Act of 1961 in passing the impugned order. Firstly, the Settlement Commission did not examine the records and the reports of the Commissioner. Not having done so, it could not pass an order either rejecting or accepting the settlement. It ought to have called for the records and report from the Principal Commissioner. Relying upon 2011 Volume 1 Supre .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

edure under Sections 245C and 245D in Chapter XIXA of the Act of 1961 is a special procedure. It requires a special type of computation of total income. The Settlement Commission is empowered to do so. Learned Senior Advocate for the petitioners has referred to the various provisions of Chapter XIXA of the Income Tax Act, 1961 particularly to the Sections 245D(2C) and 245D(3) of the Income Tax Act, 1961. He has submitted, in reference to the various sections of Chapter XIXA that, the Settlement .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

Settlement Commission is required to call for the records from the department. In the present case, the Settlement Commission did not call for such records as required under Section 245D(3). The Settlement Commission is required to examine such records produced by the department. Since the Settlement Commission did call for the records, the question of examination of such records did not arise. The Settlement Commission is required to examine the records and to form an opinion whether or not fu .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

Commission can be construed in a manner to have given such a direction. The order dated September 2, 2016 does not give such direction. It refers to a letter dated November 25, 2016 which was not disclosed to the petitioners at the material point of time. Since the Settlement Commission is required to form an opinion as envisaged in the Act and the Settlement Commission not having done so, the Settlement Commission has failed to exercise jurisdiction vested upon it in law. The Settlement Commis .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ted that, such order does not say that, the records were called for. Such order refers to a letter dated November 26, 2015 by which the Principal Commissioner was requested to submit a report under Rule 9. Moreover, such letter was not disclosed to the petitioners at the relevant point of time. The report under Rule 9 called for is not the same as envisaged under Section 245D(3) of the Act of 1961. He has referred to the sequence of events happening before the Settlement Commission and has submi .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

impugned order. He has referred to three transactions individually and has submitted that, the Settlement Commission could have undertaken further inquiry or investigation into those three transactions, if it was not satisfied with the explanations given. The Settlement Commission could have quantified the tax liability of the petitioners in each of the three accounts. On such tax liability being found it was for the petitioners to accept or to reject the same. The Settlement Commission is empow .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

e NRI partner. The Settlement Commission ought to have taken note of such fact. It should have proceeded on the basis of the fund being brought into the firm for the purpose of computation of the income of the firm. Moreover, the Settlement Commission is sufficiently empowered under the provisions of Chapter XIXA of the Income Tax Act, 1961 to make further investigation into the affairs of the firm, in the event, the Settlement Commission is of the view that, it requires further investigation as .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

far as the third issue is concerned, he has submitted that, the transaction with the Bharat Heavy Electricals Limited (BHEL) is not disputed. Again the Settlement Commission could have entered into the details of the transactions, if necessary, rather than returning a finding that, the assessee did not come with clean hands. The purpose of going to the Settlement Commission was to have the issues settled rather than have the Settlement Commission return the findings as noted in the impugned ord .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

a decision afresh. Learned Advocate appearing for the department has submitted that, an assessee approaching the Settlement Commission is required to make a true and full disclosure of his income. In the present case, the assessee did not do so. According to him, every reference to the Settlement Commission need not result in an order of settlement being passed. It is open to the Settlement Commission to accept the proposal for settlement, give orders on such settlement or to reject the applica .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

o why the proposal for settlement as mooted by the assessee cannot be accepted. The findings arrived at by the Settlement Commission cannot be said to be perverse. It is a plausible view of the facts. It is not for the Writ Court to reapprise the evidence before the Settlement Commission as an appellate authority to come to a different finding. On the scope of interference of a Writ Court in respect of orders passed by the Settlement Commission, learned Advocate for the department has relied upo .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

& Anr. v. Smt. Sudha Patil & Anr.) and 2011 Volume 4 Supreme Court Cases page 635 (Union of India & Ors. v. M/s. Ind- Swift Laboratories Ltd.). On the aspect of procedural violation learned Advocate for the department has submitted that, in the event the so-called procedural violations do not go to the root of the matter an interference by way of a Writ Court is not called for. Moreover, in the facts of the present case, he has submitted that, the assessee has allowed the settlement .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

. Virgo Steels, Bombay & Anr.). He has sought dismissal of the writ petition. The following issues have arisen for consideration in the present writ petition:- (i) Is the impugned order of the Settlement Commission dated January 24, 2017 vitiated due to jurisdictional errors in conduct of the proceedings before the Settlement Commission? (ii) To what relief or reliefs, if any, are the parties entitled to? A partnership firm, being the first petitioner herein, had made an application for sett .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

rincipal Commissioner was required to submit a report under Section 245D(2B) to the Settlement Commission. The Principal Commissioner had submitted a report dated October 9, 2015 under Section 245D(2B) before the Settlement Commission. In the report, various issues were raised, including the non-disclosure of the manner in which the disclosed income was derived by the assessee. The assessee through its Advocate s letter dated October 27, 2015 had dealt with such report. Another report was also p .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

the assessee concerned. The Settlement Commission had returned a prima facie satisfaction that, the disclosures made by the assessee at that stage, to be full and true. It went on to say that, the correctness of the alleged additional income would, however, be considered in the course of Section 245D(4) proceedings. It had held that, the application filed by the assessee was not invalid. It had called for a report under Rule 9 from the Principal Commission. The petitioners being aware of the Ord .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ion Rules dated January 16, 2016 was submitted by the Principal Commissioner with the Settlement Commissioner. The assessee had received an opportunity to deal with the report dated January 7, 2016 under Rule 9 of the Settlement Rules. The assessee had filed a reply dated August 2, 2016 with regard thereto. The Commissioner of Income Tax had made few comments and submissions with regard to the report and the reply thereto of the assessee. The Settlement Commission, thereafter, had issued an Orde .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ated October 10, 2016 with regard to the enquiry. The assessee through its Advocate s letter dated October 9, 2016 had responded to the queries raised by the Settlement Commission. The Principal Commissioner by a report dated October 24, 2016 had stated before the Settlement Commission that, the enquiry directed by the Order dated September 2, 2016 could not be completed as various details called from diverse parties were not made available to it within time. It had sought another three months t .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

raised on December 14, 2016. The Settlement Commission after consideration of the materials placed before it, and after hearing the parties has passed the impugned Order dated January 24, 2017. By its order, the Settlement Commission has returned a finding that, the assessee did not come with clean hands to it. The assessee did not make a full and true disclosure of all material facts and income. The prerequisites for a settlement proceedings not being fulfilled by the assessee, the Settlement C .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ttlement Commission as to the alleged infractions of any statute made by the Settlement Commission in the conduct of the settlement proceedings, at all. It has been contended on behalf of the petitioners that, the petitioners having offered settlement, they had considered it prudent not to raise any jurisdictional issues with regard to the conduct of the proceedings by the Settlement Commission during its process on the apprehension that such issues may derail the settlement proceedings. In the .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ission. None of these replies show that, the petitioners did raise the point of judicial errors in the conduct of the proceedings by the Settlement Commission or the issue of jurisdiction as sought to be agitated now, at the first instance. Not having done so, a plausible inference of such a conduct is that, such a party has waived its rights with regard to such jurisdictional issues and has submitted to the jurisdiction unconditionally. It is not a case of inherent lack of jurisdiction. The com .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

a provision of law is mandatory in its operation, if such provision is one which deals with the individual rights of the person concerned and is for his benefit, such person can always waive such a right. Johri Mal (supra) has held that, while exercising the power of judicial review, the Court is more concerned with the decision making process rather than the merit of the decision itself. It has also held that, while examining and scrutinizing the decision making process, it becomes inevitable .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ffirmative, what is the terminal point for levy of interest and whether the Settlement Commission could reopen its concluded proceedings by invoking Section 154 so as to levy interest under Section 234B though not done in the original proceedings. While discussing such issues, the provisions for settlement under Chapter XIXA of the Act of 1961 have been discussed. It has also held that, the provisions for settlement are different to the provisions for regular assessment. On the scope and ambit o .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

udiced the petitioner and whether the impugned order suffers from bias, fraud or malice. Similar view has been expressed in Ind-Swift Laboratories Ltd. (supra). It has also held that, so far as the findings of fact recorded by the Settlement Commission or questions of facts are concerned, the same is not open for examination either by the High Court or by the Supreme Court. Shriyans Prasad Jain (supra) has held that, findings of fact recorded by the Settlement Commission cannot be reviewed by th .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ause no appeal has been provided against the order of the Settlement Commission, the same does not enlarge the scope of supervisory power of the High Court nor can the High Court exercise powers as an appellate authority. Rashmi Infrastructure Developers Ltd. (supra) on the facts of that case has found that, the petitioner is not in a position to substantiate that the finding of the Settlement Commission that, the assessee did not make full and true disclosure, was perverse. The writ petition wa .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

Commissioner immediately on receipt of the Order dated September 15, 2015 passed under section 245D(1) by the Settlement Commission has by its report dated October 9, 2015 raised issues with regard to the assessee not making a full and true disclosure of its income and the source from which such income had been derived. The Settlement Commission by the Order dated October 28, 2015 passed under Section 245D(2C) had postponed the decision on the correctness of the disclosure of additional income b .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ion on different occasions. The assessee could not satisfy the Settlement Commission as to the correctness of the disclosures made to it. The assessee was found not to have made full and true disclosure of its income. A finding of fact made by the Settlement Commission is not open to judicial review unless it is established that, such finding of fact suffers from perversity or is vitiated due to bias or malice. None of the grounds known to law to upset a finding of fact returned by a Settlement .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

disclosure of its income and the other matters referred to Section 245C(1). In the present case, the assessee did not made a full and true disclosure of its income before the Settlement Commission. Such is the finding of the Settlement Commission. Such finding has not been substantiated to be perverse or to be suffering from such a legal infirmity so as to warrant an interference by a Writ Count. It is not for the Writ Court to exercise appellate jurisdiction over an order passed by the Settlem .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

 

 

 

 

 



|| Home || Acts and Rules || Notifications || Circulars || Schedules || Tariff || Forms || Case Laws || Manuals ||

|| About us || Contact us || Disclaimer || Terms of Use || Privacy Policy || TMI Database || Members || Site Map ||

© Taxmanagementindia.com [A unit of MS Knowledge Processing Pvt. Ltd.] All rights reserved.

Go to Mobile Version