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TMI Blog1990 (6) TMI 2X X X X Extracts X X X X X X X X Extracts X X X X ..... , and December 27, 1976, for income-tax and wealth-tax, respectively. The petitioner filed statement on March 7, 1978, and reserved his right to make alterations and additions as subsequently deemed necessary. The petitioner belonged to the Kamani family which is in charge of several Indian companies. The family created specific foreign assets for which a very broad, general and rudimentary account was given by the petitioner. The petitioner claimed that the foreign exchange position in the country deteriorated progressively from 1955 onwards and the taxation went on increasing with several restrictions. With these constraints, the Kamani group decided to have a second line of defence for its security and even with full knowledge that to acquire or possess any valuable assets outside India without obtaining permission under Foreign Exchange, Income-tax and other Central Acts would be illegal, the Kamani group created legal agencies on its behalf in foreign countries but scrupulously avoided having any direct involvement with the companies set up abroad.Initially, the scheme was implemented by the elder brother of the petitioner, but after his death, the petitioner continued to ope ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urt and challenged the refusal on the part of the Commissioner to issue directions to various agencies as demanded by the petitioner. The petitioner also applied for stay of the operation of the proceedings before the Commission. The petition was rejected by the learned single judge and Appeal No. 1065 of 1986 preferred by the petitioner met with the same fate on December 10, 1986. The petitioner then tried to stall the proceedings before the Commission by filing a petition before the Supreme Court, but the petition was not entertained nor was any interim relief granted. On September 1, 1989, a notice under section 245HA of the Income-tax Act, 1961, and under section 22HA of the Wealth-tax Act, was served on the petitioner and the hearing was fixed on October 5, 1989. The notice informed the petitioner that the proceedings before the Settlement Commission would be disposed of due to non-co-operation of the petitioner. At the hearing, the petitioner appeared in person and again sought clarification and time. The Commission explained to the petitioner that the petitioner must produce any deed of trust or other documentary evidence available with him with regard to the trusteeship ag ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 245D of the Act provides for procedure on receipt of an application under section 245C of the Act. Sub-section (4) of section 245D of the Act provides "After examination of the records and the report of the Commissioner received under sub-section (1), and the report, if any, of the Commissioner received under sub-section (3), and after giving an opportunity to the applicant and to the Commissioner to be heard, either in person or through a representative duly authorised in this behalf, and after examining such further evidence as may be placed before it or obtained by it, the Settlement Commission may, in accordance with the provisions of this Act, pass such order as it thinks fit on the matters covered by the application and any other matter relating to the case not covered by the application, but referred to in the report of the Commissioner under subsection (1) or sub-section (3)." Section 245H of the Act confers power on the Settlement Commission to grant immunity from prosecution and penalty. Section 245HA of the Act was inserted by Finance Act, 1987, with effect from June 1, 1987. This section confers power on the Settlement Commission to send the cases back to the Assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... complaint about the resort by the Commission to this amended provision because after this provision came into force, the petitioner was served with the notice under this amended provision and was called upon to produce the necessary documents and evidence. The petitioner failed to honour the commitment and the Commission, therefore, rightly held that the amending provisions were merely procedural in nature and the Commission was entitled to exercise the powers and dispose of the proceedings for non-co-operation of the petitioner. In my judgment, the view taken by the Commission is correct and the challenge by the petitioner is without any merit. Apart from this consideration, it cannot be overlooked that sub-section (4) of section 245D of the Act which is all along in existence permits the Commission to pass any order as it thinks fit on the matter covered by the application and in matters relating to the case not covered by the application but referred to in the report of the Commissioner forwarded to the Settlement Commission. It is obvious that there is inherent power in the Settlement Commission to dispose of the proceedings for failure of the petitioner to give co-operation. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ioner has filed contradictory statements of facts on various occasions according to his convenience. The petitioner, at one stage, claimed that the assets of the foreign companies belonged to the Kamani family, while at another stage, the petitioner claimed that it was his personal income. It is obvious that the petitioner was making deliberate, misleading and false statements to keep the proceedings pending with a view to avoid civil and criminal liabilities. Surely, a person' seeking immunity for suppressing income cannot enjoy this liberty with the Settlement Commission. Shri Kapadia tried to rely upon certain documents produced before the Settlement Commission to urge that the petitioner had disclosed sufficient material. It is impossible to accede to the submission. The Settlement Commission was not at all satisfied with the disclosures and came to the conclusion that the petitioner was more interested in suppressing the material than disclosing it. The finding recorded by the Settlement Commission does not suffer from any infirmity. In my judgment, the challenge to the order passed by the Settlement Commission is without any merit and the petition must fail. Accordingly, ru ..... X X X X Extracts X X X X X X X X Extracts X X X X
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