TMI Blog2018 (7) TMI 225X X X X Extracts X X X X X X X X Extracts X X X X ..... his response pleading inadvertence and that he was under the bona fide belief that the refund claimed is yet to be processed given the short span of time after filing of his return of income. Settlement Commission is a forum before which the assessee surrenders himself and it is not a forum for challenging the legality of assessment order or other orders passed in any proceedings under the Act. The Scheme of the Act clearly shows that the power conferred on the Settlement Commission is wide, as it has the power to give immunity against prosecution or imposition of penalty. This court is of the view that the petitioner should be permitted to proceed further and for which purpose the petitioner should be given an opportunity to pay the tax. Writ petition is allowed, the impugned order is set side and the matter is remanded to the 1st respondent- Income Tax Settlement Commission, Additional Bench,Chennai for fresh consideration. - W.P.No. 5333 of 2018 & W.M.P. Nos.6553 & 6554 of 2018 - - - Dated:- 19-6-2018 - T. S. Sivagnanam, J. For the Petitioner : Mr.P.S.Raman, Senior Counsel Assisted by Mr.R.Sivaraman For the Respondent : Mr.A.P.Srinivas Senior Standing Coun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , found that all the requirements laid down under section 245(C) (1) have been fulfilled by the petitioner. 5.2 It was further pointed out that on the basis of the materials placed before the Settlement Commission, they were of the view that prima facie there is no material in the possession of the Settlement Commission, which warrants the conclusion that true and full disclosure has not been made by the petitioner or he has not disclosed the manner of earning such income. Accordingly, the Settlement Commission held that the application is fit to be allowed to be proceeded with further. An order to the said effect was passed without prejudice to the finding that may be given at a later stage of the proceedings. Pursuant to the said order, the Principal Commissioner of Income Tax, Central -1 (i/c), Chennai, submitted a report under section 245D(2B) of the Act. The petitioner was given an opportunity to offer his comments on the report dated 05.02.2018, which the petitioner had filed on 12.02.2018. 5.3 The case was listed for hearing before the Commission on 16.02.2018 three days before the hearing on 13.02.2018, the Principal Commissioner of Income Tax, Central -1 (i/c), Chenn ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ejection. 6. What is important to note is that when the petitioner had filed the application for settlement, there were enclosures along with the application. One such enclosure being Enclosure B : Part C: Col: 4:5:6:7 to Form 34B. So far as the balance tax payable for the assessment year 2015-16 is concerned, it is set out in column No.9 of the Enclosure B an amount of ₹ 1,17,07,922/- has been shown. According to the petitioner, while computing this amount, the petitioner took note of the refund claim of ₹ 98,18,350/- and reflected the balance amount and this is according to the petitioner is a genuine mistake as the Form 26AS for the financial year 2015-16 corresponding to the assessment year 2016-17 in Part D which deals with details of paid refund states No transaction present . Thus, the plea of the petitioner that it is an unintentional, inadvertent mistake and that being technical, should not have been taken as a ground to reject the application as invalid. The petitioner stated that his erstwhile Charted Accountants failed to inform the petitioner with regard to the depositing of the amount in one of their Bank Accounts towards refund of tax for the assessme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly, the fact that the refund of ₹ 98,18,350/- was already credited to the petitioner's account. 10. The facts as stated in the counter affidavit disclose that the PCIT was not aware of the fact that the refund was already granted when he had submitted his report dated 05.02.2018. In other words, the 2nd respondent-Department does not dispute the fact that the grant of refund was brought on record before the Settlement Commission only vide Supplementary Report dated 13.02.2018, three days prior to the hearing of the application. 11. It has to be seen as to how the Settlement Commission has dealt with such cases. In the case of M/s. Hatsun Agro Products Limited, who filed an application before the Settlement Commission for the assessment year 2008-09 to 2014-15, more or less a similar issue arose before the Tribunal with regard to the claim of the assessee for adjustment of refund towards additional tax on the income disclosed before the Commission. In that case, the Settlement Commission gave an opportunity to the assessee to pay the sum, since the refund is only a notional figure till it is crystalised/issued. 12. Chapter XIX A was inserted by the Taxation Laws ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the Income Tax Department themselves where not aware of the fact that the refund has been processed and granted on 25.10.2016, when they filed report dated 05.02.2018 and was brought on record only by way of supplementary report dated 13.02.2017, it was inadvertently omitted by the petitioner and the petitioner having pleaded ignorance and inadvertence and sought for pardon, the Settlement Commission could not have treated the petitioner's case as one of making a false claim of refund. In fact, in paragraph 9 of the affidavit filed in support of the writ petition, the petitioner has stated that his former Charted Accountants did not inform him about the same , was under the bona fide belief that the refund due to him would not be processed in such an expeditious manner, that too, within a short span of two months from the date of filing of returns for the assessment year 2016-17. 14. The learned Senior Standing Counsel for the Revenue strenuously contended that it is a clear case of failure to give full and true disclosure. 15. I am unable to accept the said stand for the reason that the application before the Settlement Commission contained all details and thus the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... titioner submitted his response pleading inadvertence and that he was under the bona fide belief that the refund claimed is yet to be processed given the short span of time after filing of his return of income. 18. On a reading of the impugned order dated 16.02.2018, I find that the Settlement Commission did not conduct an enquiry to satisfy itself that the stand taken by the PCIT by way of a supplementary report could be a valid ground to come to a conclusion that the assessee had made a false claim on the refund due. The Settlement Commission did not endeavor to go into the aspect as to why this information was not placed by the PCIT while filing the report dated 05.02.2018 under Section 245D(2B) of the Act. Thus, to hold that the assessee had misrepresented facts without an enquiry into the matter more so, in the light of the stand taken by the assessee pleading inadvertence and bona fide mistake, I have no hesitation to hold that there is a flaw in the decision making process. Therefore, this Court is well justified in exercising its jurisdiction under Article 226 of the Constitution of India, which confers power of judicial review on this Court over orders passed by Courts ..... X X X X Extracts X X X X X X X X Extracts X X X X
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