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TMI Blog2018 (7) TMI 225X X X X Extracts X X X X X X X X Extracts X X X X ..... ). 3. The issue in the instant case lies in a very narrow campus. The petitioner filed an application under Section 245C of the Act before the Settlement Commission on 13.12.2017 requesting the Commission to settle the following issues:- 1.1 To decide the undisclosed income of the applicant for the assessment years 2010-11 to 2016-17 resulting from the incriminating materials seized at the time of the search initiated on 05.01.2016 at the premises of Apollo Hospitals Enterprises Ltd., wherein the applicant is holding the office as Chairman and at the residential premises of the applicant at No.19, Bishop Gardens, Raja Annamalaipuram, Chennai - 600 028. 1.2 To decide the waiver of various penalties leviable under the Income Tax Act, 1961. 1.3 To decide the grant of immunity from penalty and prosecution under the Income Tax Act, 1961. 4. The petitioner in the said application has stated the nature and circumstances of the case and enclosed the requisite details including the details of additional tax liability on additional income. 5.1 It may not be necessary for this court to go into the mathematical details as set out in the application for settlement. What is called upon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tioner has not paid any tax on the additional income offered for the assessment year 2016-17. Hence, it was reported that the petitioner has not paid the tax in full for the additional income offered before the Settlement Commission, therefore, cannot be said to have fulfilled the condition and requested the Commission to declare the application as invalid. 5.4 On receipt of the supplementary report dated 13.12.2017, the petitioner submitted a representation before the Settlement Commission stating that PCIT has reported that the petitioner has received refund for the assessment year 2016-17, vide cheque dated 25.10.2016 for a sum of Rs. 98,18,350/- and the petitioner has verified the form 26AS along with Bank Account and accepts the receipt of the said refund. It was further submitted that the petitioner had claimed the above refund for adjustment in respect of the additional tax liability arising in the application filed before the Commission and the said sum was claimed inadvertently and stated that it is an unintentional one and he may kindly be pardoned. The Settlement Commission, after taking into consideration the supplementary report filed by the PCIT, passed the impugned ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ner in their application, while requesting the Settlement Commission to settle their due, yet this issue was not pointed out in the report of the PCIT dated 05.02.2018. 8. On a reading of the report dated 05.02.2018 filed under section 245D(2B) of the Act by the PCIT, it is clear that a thorough study has been made and correctness and adequacy of additional taxes and interest paid by the petitioner has been verified and wherever PCIT found that the tax and interest calculation were found to be correct it has been so stated and wherever the department had their reservation for stating that there is no true and full disclosure, the same has been explicitly mentioned. Thus, the fact that the refund of Rs. 98,18,350/- was granted to the petitioner vide cheque dated 25.10.2016, pursuant to the proceedings of the CPC, Bengaluru was not within the knowledge of the PCIT. The petitioner also pleads ignorance and stated that his previous Charted Accountants did not inform him. The fact that the refund was already been granted by cheque dated 25.10.2016 came to the notice of the PCIT much later and placed before the Settlement Commission by way of supplementary report dated 13.02.2018. The p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ould be apt to refer to the recommendations made by the Wanchoo Committee for establishing a settlement machinery under the Act. It was pointed out that the door for compromise with an errant taxpayer, should not, for ever, remain closed, as in the administration of fiscal laws, whose primary objective is to raise revenue, there has to be room for compromise and settlement. A rigid attitude would not only inhibit a one-time tax-evader or an unintending defaulter from making clean breast of his affairs, but would also unnecessarily strain the investigational resources of the Department in cases of doubtful benefit to revenue, while needlessly proliferating litigation and holding up collections. Therefore, it was suggested that there should be a provision in the law for a settlement with the taxpayer at any stage of the proceedings. 13. Further, it was pointed out that each individual case can be considered on its merits and full disclosures not only of the income but of the modus operandi of its build up can be insisted on, thus sealing off chances of continued evasion through similar practices. Full power is conferred on the Settlement Commission to call for a report from any of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hallenging an order passed by the Settlement Commission under Section 245D(2C) of the Act dismissing the application on the ground that the application for settlement as filed is not valid for failure to pay taxes on the additional declared income as contended by the Commissioner of Income-tax. The Court while examining as to whether the decision making process of the Commission was just and proper pointed out that a rejection of the application on dubious / suspicious ground made out in the report should not be allowed by the Commission without some enquiry to satisfy itself about the stand of the Commissioner. The circumstances surrounding the Commissioner's report viz., of equal amount of interest demand to refund granted by the intimation, not annexing the intimation to the report and the intimation itself being served upon the petitioner therein after over one year and it is purported issue and after the Commissioner's report also raised questions about its authenticity. Thus, it was pointed out, an unjustified rejection without proper enquiry into the stand of the Revenue would cause prejudice to the assessee as all the information made available during the settlement ..... X X X X Extracts X X X X X X X X Extracts X X X X
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