TMI Blog2021 (9) TMI 164X X X X Extracts X X X X X X X X Extracts X X X X ..... ts were not maintained in all the three cases and the assessees do not, at any point of time, state that they have maintained books of accounts. This is precisely the reason for which the matter has gone before the ITSC and the assessees made full and true disclosure and also offered additional income to tax and regarding valuation of the properties, etc., additions have been made. So far as the method of valuation is concerned, unless and until the Department had prima facie material to show that there was gross undervaluation, the valuation adopted by the assessees, based on the guideline value issued by the Government, cannot be faulted. ITSC was right in finding that the Revenue could not offer any evidence in their defence with regard to valuation of the properties. Even while examining the issue regarding cost of construction of the building, the ITSC took note of certain seized documents, which showed the cost of construction of two buildings at ₹ 1.90 Crores and the said shortfall should be added. We need not labour much on the other issues, as the ITSC examined each of the issues and wherever required, it has added the shortfall. Therefore, by referring to one ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n W.P.Nos.25845 to 25847 of 2014. 3. In this judgment, the appellants are referred to as the assessees, the first respondent is referred to as the Revenue and the second respondent is referred to as the ITSC. 4. The Revenue filed the said writ petitions challenging the common order dated 23.1.2014 passed by the ITSC under Section 245D(4) of the Income Tax Act, 1961 (for short, the Act). 5. Two of the assessees are doctors specialized in Gynaecology and Reproductive Technology and are treating infertility. They run a medical facility at Chennai. A search was conducted by the Revenue in the hospital of the assessees and the business and the residential premises of the partners. According to the Revenue, the search revealed substantial amount of undisclosed (professional) receipts of the assessee as well as the hospital and other partners, huge investments in immovable properties and payment of on money, etc., for the assessment years from 2006-07 to 2011-12 apart from part of the assessment year 2012-13. 6. Pursuant to the notices issued under Section 153A of the Act, the assessees filed their return of income disclosing the same income in the returns, which were ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r passed by the ITSC by filing a writ petition. 11. As a general proposition, Mr.A.P.Srinivas, learned Senior Standing Counsel appearing for the Revenue is right. But, what we need to note is that the common order impugned is an order passed by the ITSC and it is not a regular assessment order nor an order passed by the Appellate Authority testing the correctness of an assessment order. This aspect has to be borne in mind because the Act prescribes a separate procedure for settlement of cases and it is obvious that those, who approach the ITSC, are defaulters where search and seizure operations would have been conducted, unaccounted cash and documents relating to properties, etc., would have been recovered. Bearing in mind the fact that the tax amount is required to be collected to augment the State Exchequer, such a provision had been inserted in the Act. 12. Therefore, what is required to be examined is as to whether the filing of applications by the assessees for settling the cases is a genuine attempt of the assessees wherein the assessees fully and truly disclosed all material particulars bearing in mind that it is they who approached the ITSC to settle the dispute. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fees. 15. The Revenue did not project its case based on the average income earned by the assessees during the period, for which, search had been conducted and assessments were opened. Therefore, when the material available with the Department was only cash found for two days, the ITSC, in our view, in the absence of proper books of accounts and in the light of the fact that the Revenue sought to sustain its computation of suppressed income based on the cash found during two days, rightly held that the net asset method was found to be the only way to proceed further. We do not find any perversity in the common order passed by the ITSC in this regard. 16. Equally, in respect of other issues also, the ITSC considered the objections in the report filed under Rule 9 of the said Rules and the stand of the assessees and recorded reasons as to why the stand of the assessees on certain issues was not acceptable and certain amounts were directed to be added in the hands of the assessees and they were accepted and the issues were settled. The Revenue does not fault the ITSC on any procedural ground. Rather, there is no allegation that the Revenue did not have adequate opportunity t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dings at ₹ 1.90 Crores and the said shortfall should be added. 19. We need not labour much on the other issues, as the ITSC examined each of the issues and wherever required, it has added the shortfall. Therefore, by referring to one sentence in paragraph 7.1.2 of the common order passed by the ITSC, it cannot be stated that there was no full and true disclosure. In fact, the findings in paragraph 7 have to be read in its entirety, which had several sub-paragraphs and which considered the case of the assessees on various heads culminating in paragraph 7.7, which deals with withdrawals or drawals of the assessees from bank accounts. The ITSC found that the drawals were inadequate and therefore, ordered ₹ 5 lakhs to be added in the hands of both the individual assessees for the relevant assessment years. Therefore, we find that there is no perversity in the approach of the ITSC and bearing in mind the conduct of the assessees that they approached the ITSC with true spirit of settlement, the ITSC granted relief. 20. Thus, we are of the view that the learned Single Judge ought not to have set aside the common order passed by the ITSC and remanded the matter to the ..... 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