TMI Blog2022 (7) TMI 438X X X X Extracts X X X X X X X X Extracts X X X X ..... he department and the settlement commission have embarked upon to alter their earlier view or inference, which cannot be a reason to thwart the application as not maintainable. The paradox in the functioning of settlement commission, comprising of senior members from the department, deviating from the neutrality of a quasi-judicial authority, would have invited our much attention if it had not been abolished and replaced with interim board. As rightly contended by the learned senior counsel for the Appellant, ought to have gone into the merits of the contentions advanced on behalf of the appellant and rendered specific findings, more particularly, when the allegations of principles of natural justice and violation of the procedures as alleged. Even if the Learned Judge was to disagree with the contentions, all the contentions ought to have been discussed and specific findings ought to be given. Therefore, we have no hesitation to hold that the order has been passed in violation of the principles of natural justice and against the procedures prescribed under the Income Tax Act and hence, the order is liable to be set aside and remanded back for fresh consideration after giving ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uous as the attachment was made before six years and maximum period for which such provisional attachment could be in force is only two years. - Writ Appeal No. 1852 of 2021 And C.M.P. No. 11718 of 2021 - - - Dated:- 27-6-2022 - Honourable Mr. Justice R. Mahadevan And Honourable Mr. Justice J.Sathya Narayana Prasad For the Appellant : Mr. R.V.Easwar, Senior counsel for Mr. N. Viswanathan For the Respondents : Mr. A.P. Srinivas Senior Standing Counsel JUDGMENT R.MAHADEVAN, J. Aggrieved against the order of dismissal dated 17.04.2021 passed in W.P.No.41407 of 2016, the appellant has come up with this intra-court appeal. Brief facts. 2. According to the appellant, he has been regularly filing the returns of income including the Tax Audit report. During the Financial Year 2006- 2007, his concern M/s. Maruthi Electrical Engineers was awarded an electrical contract by M/s. RR Info Park Private Limited (RRIPL) for supply and installation work in their proposed twin town IT park at Ambattur. The contract was so structured that there was an excess in the value of the contract, which was to be brought back as investment in the two compan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nferred under Section 153A of the Act, proposing to assess/re-assess the income of the appellant for the assessment years 2007-2008 to 2013-2014. In response, the appellant sent a reply on 10.02.2014 enclosing copies of profit and loss account and balance sheet, with a request to treat the original return of income filed by him for the respective assessment years, as the return of income in respect of the notices under Section 153A of the Act. 5. While so, on 30.11.2014, the appellant met with a major accident and slipped into coma stage. It is stated that the assessee was under prolonged treatment, initially in Apollo Super Speciality Hospitals, Nandanam and thereafter shifted to Brain Spine Hospital, Nandanam. In those circumstances, the son of the assessee namely T. Gokula Krishna filed an application under Section 245D (4) of the Act before the second respondent praying to (i) determine the taxable income for the years covered in the application and for payment of additional tax therein (ii) to grant immunity from penalty and prosecution, if any, under the provisions of the Act (iii)waive in full or in part, the interest under Section 234 A, B and C of the Act (iv)upon s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mitted a report dated 19.08.2015 under Rule 9 of the Income Tax Settlement Commission Rules to the second respondent stating that the appellant has not satisfied that he has made full and true disclosure of the income about the income received or derived, the manner in which the purchases and various expenses were inflated and also the manner in which the investments were made. Therefore, by the report dated 19.08.2015, the third respondent sought for further investigation into the matter relating to plea of appellant for settlement of the dispute. 8. On notice, the appellant's son submitted a reply dated 23.06.2016 before the second respondent to the report of the third respondent dated 19.08.2015 and contended that the second respondent need not accede to the report of the third respondent dated 19.08.2015 for further investigation under Section 245D (3) and to direct the department to comply with the order dated 07.04.2015 of the second respondent. 9. The report dated 19.08.2015 of the third respondent and the reply dated 23.06.2016 of the son of the appellant was taken on record by the second respondent. Upon scrutiny of the records, the second respondent, by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... settlement of cases under Section 245C cannot be construed as an absolute right of an assessee. It is only a facility provided to the assessee to settle the cases in a peaceful manner. When the settlement being not a right, the procedures contemplated are to be followed scrupulously. All the assessments are to be made by the regular Assessing Officer by following the provisions of the Act. Thus, the application filed under Section 245C is a special provision contemplated for the purpose of settling the cases in a speedy manner, only in the event of furnishing the true and full disclosure of income by an assessee along with the application. 12. Doubts raised based on incriminating evidence by the Department and the particulars produced by the assessee are sufficient enough to form an opinion that there was no true and full disclosure. The true and full disclosure contemplated under the provision must be understood that the said disclosure must be an acceptable disclosure with reference to the documents and evidences available with the Department. The very settlement is a consensus to arrive a settlement and the parties are expected to be fair and honest. With this idea, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... there is no nexus between the reasons given and the decision taken by the Settlement Commission, then the High Court, in exercise of power under Article 226 of The Constitution of India, can interfere with the proceedings of the Commission . By pointing out the said decision, the learned senior counsel submitted that the decision making process itself is arbitrary inasmuch as the mandatory procedural requirements have not been followed and the earnest efforts taken by the appellant to settle the tax dues has not been appreciated by the second respondent Commission. 12.3. The learned senior counsel referring to the statement under Section 132, Annexure 3 of the Application, reply of the appellant dated 23/06/2016 with the annexures, reply dated 14/09/2016, report of the Company Secretary, reports of the Joint Commissioner and the Principal Commissioner, further contended that the 2nd respondent has failed to consider all the documents submitted by the appellant and the consideration of the same would have proven that every particulars were disclosed and also recorded in earlier proceedings, but in an arbitrary, biased and prejudicial manner, recording perverse findings by cons ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing to determine the taxable income for the years covered in the application and for payment of additional tax therein, to grant immunity from penalty and prosecution, if any, under the provisions of the Act and for other reliefs. The second respondent, initially allowed the application filed by the appellant on 07.04.2015 and directed to department to proceed further in relation to the plea of the appellant. However, after the order dated 07.04.2015 was passed, certain details were called for, from the appellant. The details furnished thereof unfolded that the appellant had suppressed several material particulars and therefore, a report was submitted to the second respondent. On the basis of such report, after affording opportunity of hearing to both sides, the second respondent passed the order dated 26.09.2016 holding that for the very same assessment years, the orders of assessment passed by the assessing officer were subjected to challenge and they are the subject matter of appeal before the Tribunal. Therefore, it was concluded that the Commission could take up the final adjudication under Section 245D (4) of the Act after the Tribunal decides the appeal. Further, the assessm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... further, it is necessary to look into the relevant provisions regarding the powers and functioning of the Settlement Commission. Chapter XIX-A of the Income Tax Act deals with Settlement of Cases. The relevant provisions read as under: Section 245C. Application for settlement of cases .-(1) An assessee may, at any stage of a case relating to him, make an application in such form and in such manner as may be prescribed, and containing a full and true disclosure of his income which has not been disclosed before the Assessing Officer, the manner in which such income has been derived, the additional amount of income-tax payable on such income and such other particulars as may be prescribed, to the Settlement Commission to have the case settled and any such application shall be disposed of in the manner hereinafter provided: Provided that no such application shall be made unless,- (i) in a case where proceedings for assessment or reassessment for any of the assessment years referred to in clause (b) of sub-section (1) of section 153A or clause (b) of sub-section (1) of section 153B in case of a person referred to in section 153A or section 153C have been initiated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Commissioner (2B) The Settlement Commission shall,- (i) in respect of an application which is allowed to be proceeded with under sub-section (1), within thirty days from the date on which the application was made; or (ii) in respect of an application referred to in sub-section (2A) which is deemed to have been allowed to be proceeded with under that sub-section, on or before the 7th day of August, 2007, call for a report from the Principal Commissioner or Commissioner and the Principal Commissioner or Commissioner shall furnish the report within a period of thirty days of the receipt of communication from the Settlement Commission (2C) Where a report of the Principal Commissioner or Commissioner called for under sub-section (2B) has been furnished within the period specified therein, the Settlement Commission may, on the basis of the report and within a period of fifteen days of the receipt of the report, by an order in writing, declare the application in question as invalid, and shall send the copy of such order to the applicant and the Principal Commissioner or Commissioner: Provided that an application shall not be declared in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r Commissioner if any, received under- (i) sub-section (2B) or sub-section (3), or (ii) the provisions of sub-section (1) as they stood immediately before their amendment by the Finance Act, 2007, and after giving an opportunity to the applicant and to the Principal Commissioner or 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 Principal Commissioner or Commissioner. 4A) The Settlement Commission shall pass an order under sub-section (4), - (i) in respect of an application referred to in sub-section (2A) or subsection (2D), on or before the 31st day of March, 2008; (ii) in respect of an application made on or after the 1st day of June, 2007 but before the 1st day of June, 2010, within twelve months from the end of the month in which the app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be made under this sub-section unless the Settlement Commission has given notice to the applicant and the Principal Commissioner or Commissioner of its intention to do so and has allowed the applicant and the Principal Commissioner or Commissioner an opportunity of being heard. (7) Where a settlement becomes void as provided under sub-section (6), the proceedings with respect to the matters covered by the settlement shall be deemed to have been revived from the stage at which the application was allowed to be proceeded with by the Settlement Commission and the income-tax authority concerned, may, notwithstanding anything contained in any other provision of this Act, complete such proceedings at any time before the expiry of two years from the end of the financial year in which the settlement became void. (8) For the removal of doubts, it is hereby declared that nothing contained in section 153 shall apply to any order passed under sub-section (4) or to any order of assessment, reassessment or recomputation required to be made by the Assessing Officer in pursuance of any directions contained in such order passed by the Settlement Commission and nothing contained in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n (1) of section 245D; or (ii) an application is not allowed to be proceeded with under sub-section (2A) of section 245D, or, as the case may be, is declared invalid under subsection (2C) of that section; or (iii) an application is not allowed to be further proceeded with under subsection (2D) of section 245D, the Settlement Commission, in respect of such application shall have such exclusive jurisdiction upto the date on which the application is rejected, or, not allowed to be proceeded with, or, declared invalid, or, not allowed to be further proceeded with, as the case may be. (3) Notwithstanding anything contained in sub-section (2) and in the absence of any express direction to the contrary by the Settlement Commission, nothing contained in this section shall affect the operation of any other provision of this Act requiring the applicant to pay tax on the basis of self-assessment in relation to the matters before the Settlement Commission. (4) For the removal of doubt, it is hereby declared that, in the absence of any express direction by the Settlement Commission to the contrary, nothing in this Chapter shall affect the operation of the provisions of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under the Indian Penal Code (45 of 1860) or under any Central Act other than this Act and the Wealth-tax Act, 1957 (27 of 1957) to a person who makes an application under section 245C on or after the 1st day of June, 2007. (1A) An immunity granted to a person under sub-section (1) shall stand withdrawn if such person fails to pay any sum specified in the order of settlement passed under sub-section (4) of section 245D within the time specified in such order or within such further time as may be allowed by the Settlement Commission, or fails to comply with any other condition subject to which the immunity was granted and thereupon the provisions of this Act shall apply as if such immunity had not been granted. (2) An immunity granted to a person under sub-section (1) may, at any time, be withdrawn by the Settlement Commission, if it is satisfied that such person had, in the course of the settlement proceedings, concealed any particulars material to the settlement or had given false evidence, and thereupon such person may be tried for the offence with respect to which the immunity was granted or for any other offence of which he appears to have been guilty in connection wi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fficer, or, as the case may be, other income-tax authority, shall be entitled to use all the material and other information produced by the assessee before the Settlement Commission or the results of the inquiry held or evidence recorded by the Settlement Commission in the course of the proceedings before it, as if such material, information, inquiry and evidence had been produced before the Assessing Officer or other income-tax authority or held or recorded by him in the course of the proceedings before him. (4) For the purposes of the time-limit under sections 149, 153, 153B, 154, 155, 158BE and 231 and for the purposes of payment of interest under section 243 or 244 or, as the case may be, section 244A, for making the assessment or reassessment under sub-section (2), the period commencing on and from the date of the application to the Settlement Commission under section 245C and ending with specified date referred to in sub-section (1) shall be excluded; and where the assessee is a firm, for the purposes of the time-limit for cancellation of registration of the firm under sub-section (1) of section 186, the period aforesaid shall, likewise, be excluded. Credit for t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ll be sent to the Commissioner to enable him to furnish the report under sub-section (3) of section 245D. (3) Where the proceeding before the Settlement Commission abates, the Commission shall send, all the material and other information produced by the assessee before the Commission and the results of any enquiry held or evidence recorded in the course of proceedings before it, to the Commissioner. 17. The relevant Rules under the Income Tax Settlement Commission (Procedure) Rules, 1997 are extracted hereunder: Rule 6. Report of the Commissioner under sub-section (2B) of Section 245D. The Commissioner shall furnish seven copies of report referred to in subsection (2B) of Section 245D, to the Commission and one copy to the applicant simultaneously. Filing of affidavit. 8. Where a fact, which is not borne out by or is contrary to the record relating to the case, is alleged in the settlement application (including the annexure and the statement or other documents accompanying such annexure), it shall be stated clearly and concisely and supported by a duly sworn affidavit. Commissioner's further report 9. (1) Where an app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cation under Section 245C with annexures disclosing the supressed transaction or transactions and the additional income derived by him with a request to the commission to waive the penalty, interest and prosecution. It is an option exercised by the assessee to amicably settle the dispute instead of litigating the same before statutory authorities and the courts to by peace of mind. After the application is made, the commission is to pass an order under Section 245D(1) initially rejecting the application or allowing the application to be proceeded with. Thereafter, a report is called from the commissioner under 245D (2B) read with Rule 6 and thereafter with 15 days from the date of the report, the commission must pass an order under Section 245D (2C) declaring the application as valid or not and to proceed further. The commission, after an order is passed under section 245D(1) if is of the opinion that further investigations are necessary or particulars are to be called for, it can ask the commissioner to submit a report. Thereafter, with the report and after granting a personal hearing to the applicant, the commission is to pass an order under Section 245D (4) as it deems fit on th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rders are passed, is to be considered by the commission. Whenever any report is obtained in the course of proceedings against any persons and it is incumbent upon the commission to furnish a copy to that person to enable him to rebut the contents of the report. Otherwise, the order would be vitiated by non-compliance of the principles of natural justice and the provisions of Section 245G of the Act. 19. It is now necessary to look into the scope of interference with the findings of the Settlement Commission. Some of the decisions are: (a) In N. Krishnan v. Settlement Commission (IT WT) , [1989 SCC OnLine Kar 87 : ILR 1990 Kar 404 : (1989) 180 ITR 585 : (1989) 80 CTR 15], the Karnataka High Court held as follows: 14. Even so, as regards the first question is concerned, it should be remembered that the power of judicial review of administrative action including those of Courts and Tribunals conferred on the High Courts under Articles 226 and 227, constitutes one of the basic structures of the Constitution. Therefore, irrespective of the nature of an administrative Tribunal or the width of its power or a provision in the relevant provision of law that its dec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation of Rules of natural justice is made out; (ii) if it is found that there is no nexus between the reasons given and the decision taken by the Settlement Commission. (iii) this Court cannot interfere either with an error of fact or error of law, alleged to have been committed by the Settlement Commission. We answer the second question accordingly. (b) The Apex Court in CIT v. S.P. Jain , [(1973) 3 SCC 824 : 1973 SCC (Tax)] held as follows: 18. In our view, the High Court and this Court have always the jurisdiction to intervene if it appears that either the Tribunal has misunderstood the statutory language, because the proper construction of the statutory language is a matter of law, or it has arrived at a finding based on no evidence or where the finding is inconsistent with the evidence or contradictory of it, or it has acted on material partly relevant and partly irrelevant or where the Tribunal draws upon its own imagination imports facts and circumstances not apparent from the record or bases its conclusions on mere conjectures or surmises or where no person judicially acting and properly instructed as to the relevant law could have ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he order had been rightly set aside and whether the appellant had a right to be heard on the objections of the Commissioner. Mr Harish Salve, counsel for the appellant contends that it had a right to be heard. On the other hand Dr. V. Gauri Shankar, learned counsel for the respondents submitted that the order proceeded on the assumption that the objections had been heard. He did not, in fairness to him it must be conceded, contest that in a matter of this nature the appellant had a right to be heard. Reading the order, it appears to us, that though the appellant had made submissions on the Commissioner's objections but there was no clear opportunity given to the appellant to make submissions on the Commissioner's objections in the sense to demonstrate that the Commissioner was not justified in making the objections and secondly, the Commission should not accept or accede to the objections in the facts and circumstances of the present case. We are of the opinion that in view of the facts and circumstances of the case and in the context in which these objections had been made, it is necessary as a concomitant of the fulfilment of natural justice that the appellant should be h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... de ourselves to agree with the learned counsel for the assessee that there was no justification for the order of remand by the High Court and that the order passed by the Settlement Commission should have been affirmed. We are satisfied that under the given scenario, the High Court was correct in making the order of remand and no good ground is made out for interference in exercise of our jurisdiction under Article 136 of the Constitution. From the above judgments, it is clear that the power of the High Court to interfere with the orders of the Settlement Commission is available, when the commission has violated the procedures prescribed under the Act which includes the grant of opportunity and the obligation to consider the materials before the Commission. Similarly, when there are no nexus between the findings and the decision by the Tribunal, the order can be interfered. These grounds are in addition to the grounds of violation of the principles of natural justice, jurisdictional errors, against the provision, bias, fraud and malice. It is also settled law that a writ of certiorari can be issued by the High Court under Article 226 of the Constitution of India, when an adm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vestment. Therefore, the amount redeemed should be taxed in the hands of ultimate beneficiary M/s RRIPL for the Financial Years 2009-10 to 2011-12 as income from other sources and it is suggested that the balance amount invested in such shares in the said two companies, needs to be taxed in the hands of the person from whom such funds has originated in the relevant assessment years . Though the conclusion of the PCIT and the JCIT has been rejected, as stated above, the report of the AO has been taken and the finding that the source of funds from whom such money has been received by RRIPL, has not been furnished, is taken on record. The reliance on the report of the AO, without further opportunity to the appellant, vitiates the order as it is in violation of the principles of the natural justice and also the procedure as contemplated under Sections 245D(4) and 245G of the Act. 21. Further, a perusal of the application, annexures filed therewith reveals that the appellant has disclosed about the transaction/financial arrangement in dispute with RRIPL and HIPL, the derival of additional income and all other particulars in paras 13 to 18 of the application. In the order dated 0 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... only submitted all the available documents along with the application, but also the necessary documents to clarify the stand taken by them along the with replies submitted later, which already form part of the records. Insofar as the statement of the Company Secretary is concerned, the Commission could not have disregarded the same citing that since the company is now under liquidation and that, only the official liquidator can issue such statement. We are of the view that the commission erred in its approach as because it is more the substance than the form that counts. The Company Secretary was at the helm of affairs, when the transaction took place. The official liquidator, once appointed manages the affairs of the company until its wound up and performs the functions and duties as contemplated under Section 290 of the Indian Companies Act, 2013. The enquiry is relating to the nature of financial arrangement between the parties. Therefore, the statement could not have been totally discarded. In any case, the books of accounts and other particulars of RRIPL were available before the commission which also was ignored. As rightly contended by the learned counsel for the appellant, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... when his name was considered. But then the very fact that he was a member of the selection board must have had its own impact on the decision of the selection board. Further admittedly he participated in the deliberations of the selection board when the claims of his rivals particularly that of Basu was considered. He was also party to the preparation of the list of selected candidates in order of preference. At every stage of his participation in the deliberations of the selection board there was a conflict between his interest and duty. Under those circumstances it is difficult to believe that he could have been impartial. The real question is not whether he was biased. It is difficult to prove the state of mind of a person. Therefore what we have to see is whether there is reasonable ground for believing that he was likely to have been biased. We agree with the learned Attorney General that a mere suspicion of bias is not sufficient. There must be a reasonable likelihood of bias. In deciding the question of bias we have to take into consideration human probabilities and ordinary course of human conduct. It was in the interest of Naqishbund to keep out his rivals in order to sec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... his own case, a circumstance which is abhorrent to our concept of justice. Now coming to the selection of the officers in the junior scale service, the selections to both the senior scale service as well as junior scale service were made from the same pool. Every officer who had put in service of 8 years or more, even if he was holding the post of an Assistant Conservator of Forests was eligible for being selected for the senior scale service. In fact some Assistant Conservators have been selected for the senior scale service. At the same time some of the officers who had put in more than eight years of service had been selected for the junior scale service. Hence it is not possible to separate the two sets of officers. 24. In Union of India v. Ram Lakhan Sharma [ (2018) 7 SCC 670 : (2018) 2 SCC (L S) 356 : 2018 SCC OnLine SC 646], it was held by the Hon'ble Supreme Court as follows: 24. The disciplinary proceedings are quasi-judicial proceedings and the Enquiry Officer is in the position of an independent adjudicator and is obliged to act fairly, impartially. The authority exercising quasi-judicial power has to act in good faith without bias, in a fair and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed. In the present case the aforesaid procedure has not been observed. Since no oral evidence has been examined the documents have not been proved, and could not have been taken into consideration to conclude that the charges have been proved against the respondents. *** 30. When a departmental enquiry is conducted against the government servant it cannot be treated as a casual exercise. The enquiry proceedings also cannot be conducted with a closed mind. The Enquiry Officer has to be wholly unbiased. The rules of natural justice are required to be observed to ensure not only that justice is done but is manifestly seen to be done. The object of rules of natural justice is to ensure that a government servant is treated fairly in proceedings which may culminate in imposition of punishment including dismissal/removal from service. 31. A Division Bench of the Madhya Pradesh High Court speaking through R.V. Raveendran, C.J. (as he then was) had occasion to consider the question of vitiation of the inquiry when the Enquiry Officer starts himself acting as prosecutor in Union of India v. Mohd. Naseem Siddiqui [Union of India v. Mohd. Naseem Siddiqui, ILR 2004 M ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ceedings. The scope of enquiry under Chapter XIX-A is restricted to true and full disclosure, co-operation with the commission and the disclosure of the mode of income. The disclosure as contemplated under scheme is true and full when that is not tainted with fraud or misrepresentation. What is to be seen is whether the materials produced are enough to subjectively satisfy oneself to the limited scope of enquiry for settlement. It is sufficient that the assessee discloses all the primary facts. Once, the primary facts are disclosed with materials, it satisfies the requirement of full and true disclosure. The applicant cannot be burdened with the responsibility to satisfy all the inferences that are drawn by the assessing officer or the commission. Considering the nature of the scheme, that also is not the intention of the legislature. In this context, it is necessary to refer to the judgment of the Apex Court in Calcutta Discount Co. Ltd. v. ITO , [(1961) 2 SCR 241 : AIR 1961 SC 372 : (1961) 41 ITR 191] , wherein it was held as follows: 10. Does the duty however extend beyond the full and truthful disclosure of all primary facts? In our opinion, the answer to this ques ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from the department, deviating from the neutrality of a quasi-judicial authority, would have invited our much attention if it had not been abolished and replaced with interim board. The Learned Judge, as rightly contended by the learned senior counsel for the Appellant, ought to have gone into the merits of the contentions advanced on behalf of the appellant and rendered specific findings, more particularly, when the allegations of principles of natural justice and violation of the procedures as alleged. Even if the Learned Judge was to disagree with the contentions, all the contentions ought to have been discussed and specific findings ought to be given. Therefore, we have no hesitation to hold that the order has been passed in violation of the principles of natural justice and against the procedures prescribed under the Income Tax Act and hence, the order is liable to be set aside and remanded back for fresh consideration after giving opportunity to both the parties. 27. The next question that comes to the fore is as to whether the Interim Board can now decide the matter. Before we decide on the issue, it is necessary to briefly take note of the relevant dates. The applicati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Board for Settlement (hereinafter referred to as the Interim Board ), vide Notification no. 91 of 2021 dated 10.08.2021. The taxpayers, in the pending cases, have the option to withdraw their applications within the specified time and intimate the Assessing Officer about such withdrawal. It has been represented that a number of taxpayers were in advanced stages of filing their application for settlement before the ITSC as on 01.02.2021. Further, some taxpayers have approached High Courts requesting that their applications for settlement may be accepted. In some cases, the Hon ble High Courts have given interim relief and directed acceptance of applications of settlement even after 01.02.2021. This has resulted in uncertainty and protracted litigation. In order to provide relief to the taxpayers who were eligible to file application as on 31.01.2021, but could not file the same due to cessation of ITSC vide Finance Act, 2021, it has been decided that applications for settlement can be filed by the tax payers by 30th September, 2021 before the Interim Board if the following conditions are satisfied:- i. The assessee was eligible to file application for settlement o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pending settlement applications as on 31.01.2021, the Central Government has constituted Interim Board for Settlement (hereinafter referred to as the Interim Board ), vide notification No. 91 of 2021 dated 10.08.2021. 2. Meanwhile, in order to avoid genuine hardship to number of taxpayers who were in the advanced stages of filing their application for settlement before the ITSC as on 01.02.2021 and also due to the hardship faced during the covid pandemic by the tax payers, the Central Board of Direct Taxes (referred to as the Board ) had provided relief vide Press Release dated 07.09.2021 thereby allowing assessees eligible to file application for settlement on 31.01.2021 to file such applications till the extended period of 30.09.2021. 3. In view of the above, the Board in exercise of its power under clause (b) of sub-section (2) of section 119 of the Income-tax Act, 1961 (the Act), in order to avoid genuine hardship to assessees authorizes the Commissioner of Income-tax, posted as Secretary to the Settlement Commission prior to 01.02.2021, to admit an appl ication for settlement on behalf of the Interim Board filed after 31.01.2021 ,which is the date mentioned in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o be treated as a pending application and appropriate orders are to be passed after giving the appellant sufficient opportunity and by considering all the materials placed by him. Another point that was raised by the counsel for the department before us was that the pendency of the Appeal for the year 2013-14 would be an embargo, which we do not think so. In this connection, it will be useful to refer to the judgment of the Apex Court in Calcutta Discount Co. Ltd. v. ITO , [(1961) 2 SCR 241 : AIR 1961 SC 372 : (1961) 41 ITR 191] , in which, it was held as follows: 30. We are informed that assessment orders were in fact made on March 25, 1952, by the Income Tax Officer in the proceedings started on the basis of these impugned notices. This was done with the permission of the learned Judge before whom the petition under Article 226 was pending, on the distinct understanding that these orders would be without prejudice to the contentions of the parties on the several questions raised in the petition and without prejudice to the orders that may ultimately be passed by the Court. The fact that the assessment orders have already been made does not therefore affect the Compan ..... X X X X Extracts X X X X X X X X Extracts X X X X
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