TMI Blog1998 (11) TMI 118X X X X Extracts X X X X X X X X Extracts X X X X ..... near Coimbatore for the manufacture of synthetic gems. He promoted a private limited company for that purpose. The shares of that company are held by the petitioner, his wife and daughter. The total investment made is Rs. 75.5 lakhs. The only source from which that investment was made was claimed by the assessee to be income derived from agriculture and dairy farming by himself, his wife and daughter. He claimed that besides 15 acres of agricultural lands owned by his wife, she had taken on lease 100 acres of land and had derived substantial income therefrom. It is not in dispute that the petitioner, his wife and his daughter are not assessees under the Agricultural Income-tax Act of the State and there was also no evidence of their having ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g to pay the tax remaining due after adjusting the payment already made within a reasonable time as may be allowed by the Settlement Commission. When that application came up before the Settlement Commission, the Commission rejected the same after finding that the assessee had failed to make a full and true disclosure of his income which had not been disclosed before the Assessing Officer. Such rejection was supported by the Settlement Commission, by the reasons stated by it in paragraph 4 of its order read as under : "We further find that the Assessing Officer has already made elaborate enquiries which reveal that the applicant and his wife would not have derived any substantial agricultural income. The applicant himself does not own a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ground that the complexity of the investigation involved warranted rejection of the application. It was the contention of learned counsel that if the Commission were to insist upon full and true disclosure by an applicant, the existence of the Commission would be without any purpose and that it is the duty of the Commission to determine the extent of the income in every case where the application is made and it cannot be dismissed on a ground other than non-co-operation by the assessee or on the ground that the complexity of the investigation required warranting rejection. Counsel in this context referred to section 245D(1) of the Act which is set out below : "245D. (1) On receipt of an application under section 245C, the Settlement Comm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... making a full and true disclosure of his income, as such disclosure is a necessary precondition for invoking the Commission's jurisdiction under section 245C. An application to the Commission is not intended to enable the dishonest assessee to continue his dishonest conduct and still claim the benefits which can be conferred by the Commission if the Commission were to ultimately make an order for settlement. The Settlement Commission is not meant to be an optional forum chosen at the option of the assessee for the settlement of the tax liability of the assessee as also his liability for further proceedings or prosecution under this Act or other Acts, even while the assessee continues to be dishonest and deliberately fails to make a true a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s with the power of the Settlement Commission to grant immunity from prosecution and penalty also refers to the requirement that the assessee should make before the Commission a true and full disclosure of his income and the manner in which such income had been derived. Section 245D deals with the procedure on receipt of an application under section 245C. It enables the Commission, inter alia, having regard to the nature and circumstances of the case to allow the application to be proceeded with or reject the application. The circumstances of the case have been considered by the Commission after calling for a report of the Commissioner. It is on such consideration the Commission has rejected the application. The reasons given for such rej ..... X X X X Extracts X X X X X X X X Extracts X X X X
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