9911796707
TMI Blog2022 (8) TMI 385X X X X Extracts X X X X X X X X Extracts X X X X ..... nd squash under the brand 'Lion dates'. According to the appellant, they are regularly filing the returns of income along with tax audit report as required under Section 44AB of the Income Tax Act, 1961 (in short, "the Act"). While so, on 17.07.2013, search under Section 132 of the Act was conducted in various premises of the appellant, inclusive of the residences of the Directors. At the time of search, two sworn statements were recorded under Section 132 of the Act by two different officers of the investigation wing. Subsequently, on 06.08.2013, another sworn statement was recorded under section 131 of the Act by the investigation officer. 2.2. On the basis of the search conducted and the documents seized, notices dated 28.01.2014 under Section 153A of the Act was issued relating to the assessment years from 2008-2009 to 2013-2014. For the assessment year 2007-2008, separate notice under Section 148 of the Act for reopening the assessment under section 147 was issued. In response to the notices issued under Section 153A of the Act, the appellant filed their returns of income on 01.03.2014. They also filed their return of income on 27.03.2004 in response to the notice iss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t to the above order passed by the Settlement Commission, the Principal Commissioner of Income Tax, filed a report dated 19.06.2015 under Rule 9 of the ITSC (Procedure) Rules, 1997 and as provided under Section 245D (3) of the Act before the Commission on 29.06.2015, in which the issues of difference between the unaccounted income and the income disclosed by the appellant under Section 132 (4) of the Act, were analysed. Repudiating the so-called differences, the appellant filed a detailed reply before the Commission on 13.04.2016, in which all the points raised by the Department or the so-called differences between the unaccounted income and the actual income were clarified by the appellant with documentary evidence. Subsequently, the second respondent posted the case for hearing for final settlement under section 245D(4) on 23.06.2016, on the said date, the department filed a report raising new grounds which were not earlier taken in the Rule 9 report, as regards the unaccounted income arising from inflated purchases, deduction for 80IB claim, etc and the said report was forwarded to the appellant on 04.07.2016. To the said report, the appellant filed their reply explaining each a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndent from proceeding further with respect to the assessment for the assessment years in question. 3.1. Opposing the writ petition, the third respondent filed a counter affidavit stating inter alia that the appellant has not come forward to truly and fully disclose the income and therefore, the Commission had rejected the Settlement Application filed by them. The claim made by the appellant on various accounts, is contrary to the records produced earlier. Above all, the appellant had produced the documents in a piece meal manner, as and when a particular issue was raised by the Department. Therefore, in the order dated 30.09.2016, in para No. 7.9.8, it was concluded that figures that were submitted by the appellant claiming deduction under Section 801B of the Act were altered after the department pointed out the same. In Para No.7.9.15 also, the Commission had referred to the report of the department stating that certain disclosure of additional income during the last hearing would amount to concealment of actual income. In Para No.9.8 of the order of the Commission it was further pointed out that the disclosure earlier made to this extent is not full and true and that, the appell ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e order of the second respondent, which was impugned in the writ petition, and concluded that there was no full and true disclosure of the income. In other words, the learned Judge has not independently dealt with the grounds raised by the appellant, but passed a cryptic order. 5.2. The learned counsel further proceeded to contend that the Director General of Income Tax, before whom the search report was filed, had become the Vice Chairman of the Settlement Commission and decided the settlement application against the appellant, whereas the functions of the Director General of Income Tax (Investigation) prescribed under the Organization Structure issued by the Central Board of Direct Taxes (CBDT) as part of Department of Revenue, Ministry of Finance clearly spelt out that the Director General of Income Tax (Investigation) shall have control, supervision and administers the Directors of Income Tax (Investigation), Commissioners of Income Tax (Central), the Directors of Commissioner of Income Tax, Additional/Joint/ Deputy Directors etc. While so, the Vice Chairman of the Second respondent Commission, in all fairness, ought to have adhered to the propriety and rescued him from hearin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... decision rendered by the Second respondent Commission is liable to be interfered with on the ground of bias. 5.4. The learned counsel for the appellant further contended that on 29.09.2016, a detailed report dated 28.09.2016 was filed by the department and it was also served on the appellant. However, the appellant had no occasion to submit their objections to the said report. The second respondent Commission, without providing time for the appellant to submit their objections, reserved the application for orders and hastily passed orders on the next day i.e., on 30.09.2016, which is in violation of the principles of natural justice. 5.5. The learned counsel for the appellant also submitted that as per Section 245D of the Act, the Settlement Commission can only direct the Principal Commissioner or Commissioner to make or cause to be made during the enquiry and furnish the report relating to the contents of the Settlement Application. However, by deviating the well settled procedure the second respondent Commission directed the AO to be present to verify the reply submitted by the appellant and to file a report thereof. Accordingly, the AO has also filed a report stating that "on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mission being a quasi judicial body, has given valid findings as to why the application for settlement submitted by the appellant, could not be entertained. Therefore, the conclusion reached by the Settlement cannot be interfered with by this Court. It is the specific contention on the side of the respondents that the power of judicial review under Article 226 of The Constitution of India is exerciseable only with regard to the decision making process and not on the decision arrived at by the Commission. For this purpose, reliance was placed on the decision in the case of S.V. Shankar vs. Settlement Commission (IT & WT) [2007 (292) ITR 633 (Mad)] wherein the Division Bench of this Court held as follows: "It may be noted that the jurisdiction of this Court under Article 226 of The Constitution of India is not that of the appellate Court. The provision for settlement under Chapter XIX-A is in the nature of a statutory arbitration to which a person may submit himself voluntarily. Hence, the power to review that may be exercised under Article 226 of The Constitution of India could only be in cases where there are mistakes apparent on the face of the record, but may not be exercised o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d in the premises of the appellant at the relevant point of time. 6.4. As regards the deduction claimed by the appellant under Section 801B(11A) of the Act, it is stated by the learned counsel for the respondents that even during the year 2005-2006, the appellant made a claim for deduction upon construction of a new building and identifying the said building as "Syrup Unit". It was also stated by the appellant that such new building was constructed on 31.05.2016, which could be evident as per the Special Notice of Property Tax for new assessment. While so, the claim of the appellant as if the building was constructed only during March 2011 and therefore, they are entitled for depreciation, cannot be countenanced. 6.5. The learned counsel for the respondents also submitted that all the procedures contemplated under the Act have been followed in the matter of deciding the settlement application submitted by the appellant. The learned Judge, on considering the order passed by the Settlement Commission, had concluded that the appellant has not disclosed the true and accurate particulars relating to the income earned. In such circumstances, the learned counsel for the respondents pray ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pplication been declared in the return of income before the Assessing Officer on the date of application, has been paid on or before the date of making the application and the proof of such payment is attached with the application. ...... (4) An assessee shall, on the date on which he makes an application under sub-section (1) to the Settlement Commission, also intimate the Assessing Officer in the prescribed manner of having made such application to the said Commission 245D. Procedure on receipt of an application under section 245C.- (1)On receipt of an application under section 245C, the Settlement Commission shall, within seven days from the date of receipt of the application, issue a notice to the applicant requiring him to explain as to why the application made by him be allowed to be proceeded with, and on hearing the applicant, the Settlement Commission shall, within a period of fourteen days from the date of the application, by an order in writing, reject the application or allow the application to be proceeded with: Provided that where no order has been passed within the aforesaid period by the Settlement Commission, the application shall be deemed to have been a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... granted by the Settlement Commission, paid on or before the 31st day of July, 2007. 3. The Settlement Commission in respect of - (i) an application which has not been declared invalid under sub-section (2C); or (ii) an application referred to in sub-section (2D) which has been allowed to be further proceeded with under that sub-section, may call for the records from the Principal Commissioner or Commissioner and after examination of such records, if the Settlement Commission is of the opinion that any further enquiry or investigation in the matter is necessary, it may direct the Principal Commissioner or Commissioner to make or cause to be made such further enquiry or investigation and furnish a report on the matters covered by the application and any other matter relating to the case, and the 1[Principal Commissioner or Commissioner] shall furnish the report within a period of ninety days of the receipt of communication from the Settlement Commission: Provided that where the Principal Commissioner or Commissioner does not furnish the report within the aforesaid period, the Settlement Commission may proceed to pass an order under sub-section (4) without such report. (4) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ement Commission has extended the time for payment of such tax or has allowed payment thereof by instalments, the assessee shall be liable to pay simple interest at one and one-fourth per cent for every month or part of a month on the amount remaining unpaid from the date of expiry of the period of thirty-five days aforesaid. (6B) The Settlement Commission may, with a view to rectifying any mistake apparent from the record, amend any order passed by it under sub-section (4)- (a) at any time within a period of six months from the end of the month in which the order was passed; or (b) at any time within the period of six months from the end of the month in which an application for rectification has been made by the Principal Commissioner or the Commissioner or the applicant, as the case may be: Provided that no application for rectification shall be made by the Principal Commissioner or the Commissioner or the applicant after the expiry of six months from the end of the month in which an order under sub-section (4) is passed by the Settlement Commission: Provided further that an amendment which has the effect of modifying the liability of the applicant shall not be made und ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ement Commission under this section in a case where an application under section 245C is made on or after the 1st day of June, 2007. Powers and procedure of Settlement Commission. 245F. (1) In addition to the powers conferred on the Settlement Commission under this Chapter, it shall have all the powers which are vested in an income-tax authority under this Act. (2) Where an application made under section 245C has been allowed to be proceeded with under section 245D, the Settlement Commission shall, until an order is passed under sub-section (4) of section 245D, have, subject to the provisions of sub-section (3) of that section, exclusive jurisdiction to exercise the powers andperform the functions of an income-tax authority under this Act in relation to the case : Provided that where an application has been made under section 245C on or after the 1st day of June, 2007, the Settlement Commission shall have such exclusive jurisdiction from the date on which the application was made: Provided further that where- (i) an application made on or after the 1st day of June, 2007, is rejected under sub-section (1) of section 245D; or (ii) an application is not allowed to be p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Settlement Commission may, if it is satisfied that any person who made the application for settlement under section 245C has cooperated with the Settlement Commission in the proceedings before it and has made a full and true disclosure of his income and the manner in which such income has been derived, grant to such person, subject to such conditions as it may think fit to impose for the reasons to be recorded in writing immunity from prosecution for any offence under this Act or under the Indian Penal Code (45 of 1860) or under any other Central Act for the time being in force and also (either wholly or in part) from the imposition of any penalty under this Act, with respect to the case covered by the settlement : Provided that no such immunity shall be granted by the Settlement Commission in cases where the proceedings for the prosecution for any such offence have been instituted before the date of receipt of the application under section 245C: Provided further that the Settlement Commission shall not grant immunity from prosecution for any offence 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) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation was rejected; (b) in respect of an application referred to in clause (ii), the 31st day of July, 2007; (c) in respect of an application referred to in clause (iii), the last day of the month in which the application was declared invalid; (ca) in respect of an application referred to clause (iiia), the day on which the order under sub-section (4) of section 245D was passed not providing for the terms of settlement;] (d) in respect of an application referred to in clause (iv), on the date on which the time or period specified in sub-section (4A) of section 245D expires. (2) Where a proceeding before the Settlement Commission abates, the Assessing Officer, or, as the case may be, any other income-tax authority before whom the proceeding at the time of making the application was pending, shall dispose of the case in accordance with the provisions of this Act as if no application under section 245C had been made. (3) For the purposes of sub-section (2), the Assessing Officer, 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... purposes of section 196, of the Indian Penal Code (45 of 1860). Disclosure of information in the application for settlement of cases. Rule 44CA.(1) The Settlement Commission shall, while calling for a report from the Commissioner under sub-section (2B) of section 245D, forward a copy of the application in Form No. 34B ([(including the Annexure and the statements] and other documents accompanying such Annexure) along with a copy of the order under sub-section (1) of section 245D or, as the case may be, an intimation in respect of an application deemed to have been allowed to be proceeded with under sub-section (2A) of that section 245D. (2) Where an application has not been declared invalid under sub-section (2C) of section 245D or an application has been allowed to be further proceeded with under sub-section (2D) of that section, all the material and other information produced by the assessee before the Settlement Commission shall 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, theCommission shall send, all the material and other information produced by t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icant fails to furnish comments on or before the expiry of the specified period of fifteen days or within further extended period under sub-rule (1), the Commission may proceed further with the case without such comments. Verification of additional facts. 15. Where in the course of any proceedings before the Commission any facts not contained in the settlement application (including the annexure and the statements and other documents accompanying such annexure) are sought to be relied upon, they shall be submitted to the Commission in writing and shall be verified in the same manner as provided for in the settlement application. 10. A perusal of the above provisions indicate that the settlement commission is set into motion by the assessee, who though has failed to furnish all the particulars in the returns, files an application 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 cour ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uthority making regular assessment or revision of assessment to accept or deny the explanation offered by the assessee, but rather the scope of enquiry would be confined to the true and full disclosure, co-operation with the commission and the manner in which such income has been derived. The powers are to be exercised keeping in mind the object of the settlement scheme provided under the Act for speedy disposal of the disputes. At every stage before the orders are passed, an opportunity including personal hearing is to be granted to controvert the report produced against him. As per sub-section (5), it is mandatory that the commission considers all the materials brought on record before passing any order under sub-section (4), implying that even documents and statements produced or made subsequent to the application, but before orders 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 an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n evidence which is legally inadmissible, or has refused to admit admissible evidence, or if the finding is not supported by any evidence at all, because in such cases the error amounts to an error of law. The writ jurisdiction extends only to cases where orders are passed by inferior courts or tribunals in excess of their jurisdiction or as a result of their refusal to exercise jurisdiction vested in them or they act illegally or improperly in the exercise of their jurisdiction causing grave miscarriage of justice." (c) In the judgment reported in R.B. Shreeram Durga Prasad and Fatehchand Nursing Das v. Settlement Commission (IT & WT), [(1989) 1 SCC 628 : 1989 SCC (Tax) 124], the Apex Court held as follows: "7. We are definitely of the opinion that on the relevant date when the order was passed, that is to say, 24-8-1977 the order was a nullity because it was in violation of principles of natural justice. See in this connection, the principles enunciated by this Court in State of Orissa v. Dr. Binapani Dei [AIR 1967 SC 1269 : (1967) 2 SCR 625 : (1967) 2 LLJ 266] as also the observations in Administrative Law by H.W.R. Wade, 5th Edn., pp. 310-311 that the act in violation of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oner 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 heard on the objections made by the Commissioner. It is true that for the relevant orders for the years for which the Commissioner had objected the concealment had been upheld in the appeal before the appropriate authorities. But it may be that in spite of this concealment it may be possible for the appellant to demonstrate or to submit that in disclosure of concealed income for a spread over period settlement of the entire period should be allowed and not bifurcated in the manner sought to be suggested for the Commissioner's objections. This objection the appellant should have opportunity to make. In exercise of our power of judicial review of the decision of the Settlement Commission we are concerned with the legality of procedure followed and not with validity of the ord ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xx In short, Settlement Commissions are Tribunals. The preliminary point fails." Thus the Settlement Commission is held to be a Tribunal. That being the position, the petitioner is entitled to seek judicial review of the order of the Settlement Commission in a petition under Articles 226 and 227 of the Constitution of India. For these reasons, we answer the first question in the affirmative. 15........ In our opinion, many of the grounds on which arbitration award could be set aside, would not be available in view of the nature and jurisdiction of the Settlement Commission. We are of the view that a decision of Settlement Commission could be interfered with only. (i) if grave procedural defect such as violation of the mandatory procedural requirements of the provisions in the Chapter XIX-A and/or violation 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." (e) In the judgment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arish 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 heard on the objections made by the Commissioner. It is true that for the relevant orders for the years for which the Commissioner ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... largely a finding of fact. Under Rule 206(2) of the Assam Excise Rules, an applicant for settlement of a shop is required to give full information regarding his financial capacity in the tender. Such information must include the details of sources of finance, cash in hand, bank balance, security assets, etc. Then, such information is verified by the inquiry officer"." (g) Ajmera Housing Corpn. v. CIT [(2010) 8 SCC 739 : 2010 SCC OnLine SC 918], wherein, it was held by the Hon'ble Supreme Court as follows: "45. Ultimately the High Court observed that: (i) since the Settlement Commission had not supplied the annexure filed on 19-9-1994, declaring additional income of Rs. 11.41 crores, due opportunity had not been given to the Revenue to place its stand properly; (ii) huge amount of unexplained expenses, unexplained loans and unexplained surplus, total of which was more than Rs. 14 crores, was not taken into consideration while passing the final order; and (iii) the Settlement Commission had imposed token penalty of Rs. 50 lakhs while on its own assessment leviable penalty would have been Rs. 562.87 lakhs. Further, if the amount which had not been taken into consideration ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nity 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 administrative or a quasijudicial authority, in the decision making process, considers irrelevant materials by ignoring the relevant materials to draw its conclusion, the order can be interfered with. 12. In the case at hand, the settlement application filed by the appellant was rejected by the second respondent commission by order dated 30.09.2016 under section 245D(4) of the Act, on the ground that the appellant has not disclosed the full and true income in its application and hence, the same is not maintainable. It is the specific case of the appellant that such order of the settlement commission is in violation of the principles of natural justice and vitiated by the doctrine of bias. Beside ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s in para 7.9.12, the settlement commission has stated that it cannot decide the principles of law. Further, in para 7.9.13, the settlement commission has recorded that there is no unit and hence, no claim under section 80IB is valid. Similarly, the settlement commission has given a declaration that in terms of section 80(1B)(11A), the dates and dates syrup are different products, but at the same time, in para 7.9.12, it was held that it can't lay down law. Thus, there are apparent contradictions on the face of record. 15. Further, it is to be noted that the ITSC issued many directions for investigation without any written orders under section 245(D)(3) of the Act; and the reports filed by the department were direclty relied on by the ITSC, without proper verification; and though the department furnished all the facts only from the materials produced by the appellant, the settlement commission rendered a finding that the appellant has not maintained separate books of accounts, profit and loss account and balance sheets. It is also evident from the documents enclosed in the typed set of papers that the appellant made earnest efforts to respond the reports filed by the departmen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion 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 secure his position from further challenge. Naturally he was also interested in safeguarding his position while preparing the list of selected candidates. 16 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ior 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." 17. 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 impartial manner. 26. A Constitution Bench of this Court has elaborately considered and explained the principles of natural justice in A.K. Kraipak v. Union of India [A.K. Kraipak v. Union of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 MP 821] . In the above case the Court considered Rule 9(9)(c) of the Railway Servants (Discipline and Appeal) Rules, 1968. The Division Bench while elaborating fundamental principles of natural justice enumerated the seven well-recognised facets i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 question must be in the negative. Once all the primary facts are before the assessing authority, he requires no further assistance by way of disclosure. It is for him t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntion if it had not been abolished and replaced with interim board. The Learned Judge, without going into the merits of the contentions raised on the side of the appellant, rendered specific findings, more particularly, when the allegations of principles of natural justice and violation of the procedures as alleged. Therefore, we have no hesitation to hold that the order of the settlement commission has been passed in violation of the principles of natural justice and against the procedures prescribed under the Income Tax Act and hence, the same is liable to be set aside and the matter is remanded back for fresh consideration after giving opportunity to both the parties. 20. The next question that comes to the fore is as to whether the Interim Board can now decide the matter. In this connection, it is necessary to briefly take note of the relevant dates. The application before the settlement commission was filed on 02.03.2015. The order under section 245D(1) was passed by the settlement commission on 03.03.2015. After taking note of the reports filed by the department, the settlement commission rejected the application as not maintainable on 30.09.2016. The writ petition was filed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 on 31.01.2021 for the assessment years for which the application is sought to be filed (relevant assessment years); and ii. all the relevant assessment proceedings of the assessee are pending as on the date of filing the application for settlement. Such applications, subject to their validity, shall be deemed to be "pending applications" under clause (eb) of section 245A of the Act and shall be disposed of by the Interim Board as per the provisions of the Act. It is clarified that taxpa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ided 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 sub-section (5) of section 245C of the Act for filing such application, and before 30.09.2021 and treat such applications as valid and process them as "pending applications" as defined in clause (eb) of section 245A of the Act. 4. The above relaxation is available to the applications filed:- (i) by the assessees who were eligible to file application for settlement on 31.01.2021 for the assessment years for which the application is sought to be filed (relevant assessment years); and (ii) where the relevant assessment proceedings of the assessee are pe ..... 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