M/S. S. R. Ferro Alloys & Others v. Income Tax Settlement Commission & Others

HIGH COURT OF MADHYA PRADESH : BENCH AT INDORE DIVISION BENCH:HON’BLE MR. JUSTICE S. C. SHARMA & HON’BLE MR. JUSTICE RAJEEV KUMAR DUBEY Writ Petition No.1350/2017 M/s. S. R. Ferro Alloys & Others Versus Income Tax Settlement Commission & Others Mr. Sumit Nema, learned counsel for the petitioner. Mr. R. L. Jain, learned Senior Counsel with Ms. Veena Mandlik, learned counsel for the respondents. O R D E Rth(Delivered on this 27 April, 2017) As per S. C. Sharma, J. The petitioner before this Court is a partnership firm constituted under the Partnership Act has commissioned Ferro Alloys Plant for production of Manganese, Silico Manganese at Industrial Grown Centre at Plot No.101-102, Industrial Area, Meghnagar, District Jhabua (Madhya Pradesh). 02-The petitioners are aggrieved by order dated 17/02/2017 passed under Section 245D(4) by Income Tax Settlement Commission, Principal Bench, New Delhi declaring the settlement application filed by the petitioner as abated on account of it not being true and full disclosure of unaccounted income on the basis of a report submitted by the Income Tax Department i.e. Volumetric Report dated 24/07/2012. 03-The petitioners are also aggrieved by the Volumetric Report prepared by the Income Tax Department through a private Architect to determine the total volume of Manganese Ore extracted by the petitioner during December 2006 to June 2012 read with another report prepared by M/s. Geonko India Pvt. Ltd. on oral sub-contract given by the private Architect. 04-The facts of the case reveal that search and seizure operations were carried out on 20/06/2012 and 21/06/2012 under Section 132 of the Income Tax Act, 1961 at various business premises of the petitioner and no search was carried out at the mines. Along with the search and seizure operation in the group, survey under Section 133A was carried out at mines located at Kajli Dongri on 20/06/2012. The respondent Income Tax Department thereafter, issued notices to the managing partner and all the partners of petitioner firm on 07/06/2012 requiring the presence of partners at the mines for on-spot investigation of the Mining Lease. Later on, the investigation was postponed and a fresh notice was issued by the Income Tax Department on 10/07/2012 requiring the presence of the partners for on-spot verification of the mines. In the notice dated 10/07/2012 it was mentioned that in case the petitioners fail to remain present at the designated place, it will be presumed that they are in agreement with the inferences arrived at by the investigation wing of the Income Tax Department pertaining to on-spot investigation. 05-The petitioner has further stated that some of the petitioner's partner remained present during the exercise conducted by the Department. The petitioner has further stated on 12/07/2012 and 13/07/2012 survey proceedings under Section 133A of the Act at the mines of the petitioner took place in exercise of power conferred under Section 133A and a “record of proceedings” was drawn. 06-The petitioners thereafter challenged the survey proceedings by filing a writ petition at Indore i.e. Writ Petition No.7187/2012 and by an order dated 31/07/2012 the matter was decided on the ground that the respondents therein were competent to carry out the survey and as and when valuation report will be prepared, the petitioner will have a liberty to challenge the same before the appropriate forum. 07-The petitioners have further stated that Income Tax Department conducted a volumetric exercise and before completion of valuation report no notice was issued to the petitioners nor any opportunity of hearing was given by the Valuation Officer before finalizing the report. The petitioners have further stated that survey manual issued by the Income Tax 07-The petitioners have further stated that Income Tax Department conducted a volumetric exercise and before completion of valuation report no notice was issued to the petitioners nor any opportunity of hearing was given by the Valuation Officer before finalizing the report. The petitioners have further stated that survey manual issued by the Income Tax Department requires that before finalizing the survey report, the assessee must be given a copy thereof and points of discrepancies should be sorted out and thereafter, inventory should be finalized. The petitioners' contention is that in their case nothing was done. Thereafter, on 13/12/2012 by approaching the Income Tax Department the petitioner requested for a certified copy of the survey and material gathered during the search and subsequent search and a prayer was made for grant of opportunity to submit counter reply and to controvert the survey report and the documents. 08-It has been further stated that there was no response from the respondent Income Tax Department and therefore another letter was written by the petitioners on 17/12/2012 with a prayer to grant of opportunity to represent and to submit objections in respect of Volumetric Measurement taken from the Meghnagar mines of the petitioner. 09-On 26/12/2012, the respondent No.3 – Deputy Commissioner of Income Tax, Bhopal sent a sealed envelope to the petitioners which contained report of survey which was conducted on 13/07/2012 and the valuation report dated 24/07/2012. The petitioners were given time till 07/01/2013 to submit reply to the Valuation Report. 10-The petitioners in turn submitted a request letter dated 07/01/2013 requesting the respondents to provide data collected on the date of survey so that the petitioners could file their objection as the said data was missing from the report. Thirty days time was also sought to file counter report. The Income Tax Department on 09/01/2013 informed the petitioners that the data cannot be provided to the petitioners and time was extended up to 17/01/2013. 11-The petitioners on 17/01/2013 submitted a counter reply in the matter objecting the valuation report prepared by the Department. Another letter was written by the petitioners on 29/01/2013 to grant opportunity of hearing against the valuation report and to file a counter valuation report and to file counter valuation report. 12-The order passed in Writ Petition No.7187/2012 was modified by this Court on 08/03/2013 in Review Petition No.448/2012 and this Court made it clear that the order passed on 31/07/2012 shall not in any way come in way of the concerned authorities for deciding the petitioner's objections as already directed and the authorities shall be free to pass appropriate order in accordance with law. 13-The petitioners thereafter, intimated the department about the order dated 08/03/2013 passed in Review Petition No.448/2012 and requested the respondents to decide the earlier objections in accordance with law. The petitioners on 11/04/2013 submitted a letter to the department pointing out that report of private Architect is illegal, void and without jurisdiction and the same is contrary to the provisions of the Act and various administrative instructions issued by Central Board of Direct Taxes. As nothing was being done, the petitioners again preferred a Writ Petition No.8898/2013 challenging the report dated 24/07/2012 and during the pendency of the writ petition an application was filed for withdrawal of the writ petition with a liberty to approach the Settlement Commission and to raise all grounds therein. Request of the petitioners was allowed and the petition was dismissed as withdrawn with a liberty to approach the Settlement Commission. private Architect is illegal, void and without jurisdiction and the same is contrary to the provisions of the Act and various administrative instructions issued by Central Board of Direct Taxes. As nothing was being done, the petitioners again preferred a Writ Petition No.8898/2013 challenging the report dated 24/07/2012 and during the pendency of the writ petition an application was filed for withdrawal of the writ petition with a liberty to approach the Settlement Commission and to raise all grounds therein. Request of the petitioners was allowed and the petition was dismissed as withdrawn with a liberty to approach the Settlement Commission. 14-The petitioners thereafter, approached the Settlement Commission raising all the contentions raised in the writ petition against the survey report and at the same time the petitioners also disclosed unaccounted income to the tune of Rs.23 Crores before the Settlement Commission on the basis of entire record of documents recovered from the petitioners during the search and also accounted for all the assets acquired out of this unaccounted income. It has further been stated that the petitioners have paid the taxes to the tune of Rs.12 Crores along with settlement application. The settlement application was preferred under Section 245D(1) vide order dated 04/03/2015 and the Settlement Commission further passed an order for proceeding ahead in the matter under Section 245D(2C) vide order dated 24/04/2015. 15-The Income Tax Department preferred a writ petition i.e. Writ Petition No.4589/2015 against the order dated 04/03/2015 and the writ petition preferred by the Income Tax Department was dismissed at the admission stage itself on 14/05/2015. The Income Tax Department has also preferred another writ petition being aggrieved by order dated 24/04/2015 passed by the Settlement Commission to proceed with the hearing and the settlement application and the second writ petition of the Income Tax Department i.e. Writ Petition No.3759/2016 was again dismissed by this Court directing the Income Tax Department to raise their objections before the Settlement Commission and a liberty was granted to the Settlement Commission to pass a final order. 16-The petitioners have further stated that Settlement Commission on 3rd, 7th, 8th and on 9th February, 2017 heard the matter and a final order was passed on 17/02/2017. The petitioner's contention is that during the course of hearing before the Settlement Commission, the Settlement Commission indicated that writ petition challenging survey report (volumetric analysis) was withdrawn by the petitioner, therefore, they would not go into the validity of the survey report. 17-The petitioners filed their written response to show that withdrawal of the writ petition was with a specific liberty and was done because of unfortunate circumstances wherein the petitioner's main partner was under judicial custody. A request was also made for appointment of third individual agency to determine the excavated volume. The petitioner's further contention is that the Settlement Commission without considering the grounds raised by the petitioner on 09/02/2017 pronounced the order that they will like the mater to go back to the Assessing Officer as they cannot discard the volumetric report of a private Architect. 17-The petitioners filed their written response to show that withdrawal of the writ petition was with a specific liberty and was done because of unfortunate circumstances wherein the petitioner's main partner was under judicial custody. A request was also made for appointment of third individual agency to determine the excavated volume. The petitioner's further contention is that the Settlement Commission without considering the grounds raised by the petitioner on 09/02/2017 pronounced the order that they will like the mater to go back to the Assessing Officer as they cannot discard the volumetric report of a private Architect. 18-The Settlement Commission has finally treated the application for settlement by order dated 17/02/2017 as abated on account of it not being true and full disclosure of unaccounted income on the basis of volumetric report dated 24/07/2012. The petitioners have raised various grounds before this Court. The petitioner's contention is that the Settlement Commission was not justified in rejecting the application filed under Section 245(C) by the petitioners on the basis of a report by a private Architect who did not even possess the basic qualifications of a mining expert under the MMDR Act or even under the Income Tax Act and such a person cannot be even called a domain expert. 19-The second ground raised by the petitioner is that the Settlement Commission erred in law and facts in upholding the survey report prepared by a private Architect without considering the fact that the person preparing the said report was incompetent and did not possess the necessary qualifications to prepare the said report and gross inaccuracies were writ large on the face of the report, like calculation of Manganese Ore being 83% and waste being 27% which is impossible since the stripping ratio i.e. the ratio of Manganese to waste varies between 10% to 25% of the total volume and thus Manganese cannot be more than the waste and this aspect shows the basic fallacy in the report of the private Architect. 20-His further contention is that the Settlement Commission erred in rejecting the report dated 17/06/2012 prepared by the State Government at the directions of this Hon'ble Court in Writ Petition No.8898/2013, since the said report was prepared by competent revenue and mining officers and that too at the direction of this Hon'ble Court and the report of the State Government highlighted the fact of inaccuracies in using total station and 3D technique. It has been further contended that the Settlement Commission arrived at a perverse finding in respect of the signature of IBM officials and partners of the petitioner on the survey report and the finding is perverse on account of the simple reason that survey was done on 12/07/2012 while the ex-parte report was prepared on 24/07/2012 and thus, it is obvious that report dated 24/07/2012 cannot be signed on 12/07/2012.21-Learned counsel for the petitioner submits that the Settlement Commission erred in upholding the survey report merely on the basis of withdrawal of Writ Petition No.8898/2013 earlier filed before this Hon'ble Court without appreciating the fact that the withdrawal of writ petition was with a specific liberty to raise all objections to the survey report before the Settlement Commission. He further submits that the Settlement Commission was not justified in simply brushing aside the mining plan which was approved by IBM in 1998 and also in 2008 without considering that the mining plan is a statutory document prepared under MMDR Act. 22-His contention is that the Settlement Commission has erred in terming the private Architect as an expert since a person who does not even possess the necessary qualification to work as a geologist cannot be termed as an expert and even the basic findings of this private Architects' report are flawed and demonstrates that he is no expert. 22-His contention is that the Settlement Commission has erred in terming the private Architect as an expert since a person who does not even possess the necessary qualification to work as a geologist cannot be termed as an expert and even the basic findings of this private Architects' report are flawed and demonstrates that he is no expert. 23-His further contention is that the petitioner's application has been wrongly treated as not being full and true by the Settlement Commission merely on the basis of the report dated 24/07/2012 since all the facts were fully disclosed before the Settlement Commission including the factum of wrong allegations of excess mining being levied by the Income Tax Department and the Settlement Commission has not even discussed how the contentions of the petitioner are wrong in so far as secondary evidence was concerned, since it has simply reproduced in a columnar form, the submissions of the Income Tax Department and the averments of the petitioner without pointing out as to how the petitioner is at fault and the entire order does not discuss the petitioners submissions or why the submissions were not true and full and this approach shows that the Settlement Commission was predetermined not to pass the final order but proceeded with single minded determination to send the petitioner back to the Assessing Officer. 24-The petitioner besides the aforesaid ground has raised other grounds also in the present writ petition and a relief has been prayed for quashment of order dated 17/02/2017 passed under Section 245D(4) of the Income Tax Act by the Settlement Commission, Principal Bench, New Delhi. The petitioner has also prayed for quashment of Volumetric Report dated 24/07/2012 prepared by the Income Tax Department thorugh a private Architect. A further prayer has been made to quash the survey carried out under Section 133A by the Income Tax Department on 12/07/2012 at the mines of the petitioner for preparation of Volumetric Measurement Report for the period w.e.f. December 2006 to June 2012 holding the same to be beyond the scope of Section 133A. 25-A detailed and exhaustive reply has been filed by the Income Tax Department and the stand of the Department is that the petitioners were allotted Manganese Mine located at District Jhabua (Madhya Pradesh) and gross irregularities were committed by the competent authority in allotment of mine lease to the petitioner. It has been further state that search and seizure operations under Section 132 were carried out at the residential premises of the petitioner and its partners on 20/06/2012 wherein voluminous paper, documents and digital data contained on Hard Disks, Pen Drive, Laptops, Servers, Mobiles etc. were seized during the course of search. 26-It has further been stated that on a preliminary examination of the documents so seized, it was revealed that the petitioners have suppressed their actual income and their books of accounts / accounts disclosed to the Income Tax Department did not reflect the true status of its business affairs. It has been further stated that the petitioner firm had not only been grossly suppressed the actual quantity of production of Manganese Ore situated at Kajli Dongri, Jhabua but it had also suppressed the actual rate at which the Manganese Ore was being sold. 27-The respondents have further stated that the seized documents prima-facie indicated that systematic and regular payments were being made by the petitioners group to various officers / officials of the Central Government as well as the State Government including regulatory authorities and it was also detected that accounted production expenses which were several times higher than that recorded in the books of account. 28-The respondents have further stated that it was 27-The respondents have further stated that the seized documents prima-facie indicated that systematic and regular payments were being made by the petitioners group to various officers / officials of the Central Government as well as the State Government including regulatory authorities and it was also detected that accounted production expenses which were several times higher than that recorded in the books of account. 28-The respondents have further stated that it was considered necessary to conduct a survey under Section 133A of the Income Tax Act, 1961 at the Kajli Dongri Mine of the firm so that apart from other verification, physical verification of the stock could be undertaken. The survey under Section 133A on 12/07/2012 was an exercise in verification of stock and extent of excavation in continuation and in consequences to searches which commenced on 20/06/2012. 29-The respondents have also stated that during the course of survey the stock lying at the mining site was duly quantified by employing the services of domain experts. As per his report, the stock of Manganese Ore lumps found during physical verification was 23302.74 cubic meters which was multiplied by specific gravity of 3.0 and the same works out to 69908.22 MT. The respondents have stated that inventory of stock was duly taken. 30-The respondents have also stated that as per the volumetric measurement done by them at Jhabua, it is established that the petitioners have not show the correct figures in the books maintained by them. The actual physical stock is more than as reflected in the books. 31-The respondents have further stated that the sole object and intention of the Income Tax Act is to determine the true and correct income and Section 133A is also directed to achieve the same object through inter-alia verification of stock. The respondents have further stated that verification by definition requires matching the true state of affairs with the declared state of affairs. The provision of survey is essentially to verify whether the books prepared by the petitioners are in accordance with the reality as it exists at the premise. 32-The respondents have further stated that based upon the volumetric measurement it is established that the petitioner has not disclosed the correct amount of stock and the actual physical stock is more than that reflected in the books. The physical verification carried out during the survey is in the nature of verification and investigation on the issue of unaccounted production and stock of Manganese Ore, evidence of which were found galore during the searches at the different premises of the petitioner firm and its associates. 33-The respondents have further stated that the petitioner firm was informed in advance about the survey proposed to be conducted at its mine and the petitioners were requested to ensure the presence of its technical experts and all the partners during the survey. The entire exercise of volumetric measurements was done in presence of the technical person of the petitioner firm namely Shri K. S. S. Reddy, General Manager who as present full time during the exercise. Four partners of the petitioners firm along with their counsel Shri Sumit Nema were also present for a major part of the survey period. Before the start of the survey, calibration of the equipments being used was demonstrated to the representatives of the petitioners. 34-On the request of Shri Reddy, this process was done twice and he was fully satisfied. The print outs of the co-ordinates taken at the time of survey were duly signed by them in token of this fact. Due opportunity was given and it reflects that the entire process of volumetric measurement was done in presence of the representatives of the petitioners and no secrecy was required in the matter as alleged in the petition. counsel Shri Sumit Nema were also present for a major part of the survey period. Before the start of the survey, calibration of the equipments being used was demonstrated to the representatives of the petitioners. 34-On the request of Shri Reddy, this process was done twice and he was fully satisfied. The print outs of the co-ordinates taken at the time of survey were duly signed by them in token of this fact. Due opportunity was given and it reflects that the entire process of volumetric measurement was done in presence of the representatives of the petitioners and no secrecy was required in the matter as alleged in the petition. 35-The respondents have further stated that so far as the survey operation under Section 133A is concerned, this issue has been examined and decided by this Court in Writ Petition No.7187/2012 decided on 31/07/2012. The respondents have further stated that volumetric measurements were carried out with the assistance of the domain experts, namely the team of Geonko India Pvt. Ltd. and officers of the Indian Bureau of Mines and the technique used was Total Stationed Technique. The respondents have stated that volumetric analysis done by them does not suffer from any infirmity and therefore, the question of interference by this Court does not arise. 36-His further contention is that all the arguments raised by the petitioners against the survey operation and the volumetric measurement report have been considered and are found to be devoid of any merit. The objections filed by the petitioners were not found acceptable as mining plan is only an estimation which can be revised later. Hence, the mining plan does not present a true and correct picture of estimation. It is liable to be revised as per ground realities. The quantity of minerals is not freezed by mining plan and actual availability of minerals may be different. 37-It has been further stated that the so called claim of inspections by the competent authority and the Collector of the District finding no illegality to the petitioners' mining operation is a facade, since incriminating evidences have been seized to establish that the petitioners was indulging in cash payments for illegal gratification including District Collector to facilitate the suppression of production at its mines. Thus, the so called inspection reports are all farce and therefore, no cognizance can be taken to such reports which have been prepared in connivance. Further, the department has also found discrepancy in the production of Ore declared in the mining returns vis a vis declared in the books of accounts. Thus, the mining returns also do not come to the rescue of the petitioners. 38-It has been further stated that the method of volumetric measurement adopted by the department is Total Station Method which has been done in the presence of officials from IBM. It is to be noted that Kajli Dongri Mines is related to Manganese Ore, which is scheduled mineral and IBM is the regulatory authority for scheduled minerals. Hence, the report prepared with the help of IBM officials is very scientific and authentic and cannot be challenged as the entire exercise was done in the presence of the petitioners and their representatives during the course of survey. 39-It has been further submitted that in the Volumetric Measurement Report, an image of 22/01/2007 was taken from Catosat and another image was taken of 12/07/2012. The surfaces of the mine of these two different dates were generated using Terrestrial Laster Scanning technology as well as Satellite based Photogrammetry. These two surfaces were brought together by common points available on both the 3D surface data. Hence, whatever data is available in the Report is the data of excavation from mine between January 2007 till 12/07/2012. Accordingly, there is no point of excavation prior to December, 2006. The petitioners contention is this regard are false and misleading. 39-It has been further submitted that in the Volumetric Measurement Report, an image of 22/01/2007 was taken from Catosat and another image was taken of 12/07/2012. The surfaces of the mine of these two different dates were generated using Terrestrial Laster Scanning technology as well as Satellite based Photogrammetry. These two surfaces were brought together by common points available on both the 3D surface data. Hence, whatever data is available in the Report is the data of excavation from mine between January 2007 till 12/07/2012. Accordingly, there is no point of excavation prior to December, 2006. The petitioners contention is this regard are false and misleading. 40-The respondents have further stated that Volumetric Measurements were made for the excavated area, heaps of Manganese Ore, ROM & over burden lying in the mine area alloted to M/s. S. R. Ferro Alloys. Volumetric Measurements were also made for the heaps of over burden lying in the area outside the mine area in village Pipalkhunta where permission for dumping overburden has been granted to M/s. S. R. Ferro Alloys by the Collector, Jhabua. Volumetric Measurements were also made for the heaps of over burden lying in the area outside the mine area in village Pipalkhunta where no permission for dumping over burden has been granted to M/s. S. R. Ferro Alloys by the Collector, Jhabua or any other government authority. Repeated opportunity was given to the partners and General Manager of the petitioner firm to inform whether the over burden was lying at any place other than the places mentioned above but they categorically stated that the over burden was not lying at any other place. 41-It has been further stated by the respondents that during the course of survey, all the objections of the petitioner firm relating to classification of heaps into over burden, ROM or clean ore were duly considered and necessary corrections were made in the classification of heaps to the full satisfaction of the partners and General Manager Of the assessee firm. Detailed record of proceeding was made at the time of survey which bears testimony to this fact. The detailed statement of the partners and General Manager of the assessee firm also bear testimony to this fact. Thus, the objections raised by the petitioners are baseless and devoid of any merit. 42-In respect of writ petition preferred by the petitioners earlier i.e. Writ Petition No.7187/2012, which was disposed of with a liberty to challenge the proceedings before the appropriate forum, the respondents have stated that thereafter, a review petition was also preferred by the petitioner and the Review Petition No.448/2012 was decided on 31/07/2012. The respondents have furnished details of the partners / persons who were present at the time the volumetric analysis was done. The respondents have also placed reliance upon an order passed in Writ Petition No.8898/2013 decided on 13/04/2015. The respondents have placed heavy reliance upon an order passed by the Settlement Commission dated 17/02/2017 and the same reads as under:- “It was observed by us that the survey report of the domain expert M/s. Manish Pilliwar has indicated that the Total Station Method used by him and the 3D Terrestrial Laster Scanning carried out by M/s. Geonka India Pvt. Ltd. have both confirmed that the Total Excavated volume is to the tune of 14916770.55 cumt. In the expert's report, it has been clarified that the Volume of pit existing in 1998 has already been deducted while arriving at the above figure, i.e. the total excavated Volume mentioned above is that which has been excavated after 2007. Reports of M/s Geonko India Pvt. Ltd. which carried out the 3D Terrestrial Laster Scanning- expert M/s. Manish Pilliwar has indicated that the Total Station Method used by him and the 3D Terrestrial Laster Scanning carried out by M/s. Geonka India Pvt. Ltd. have both confirmed that the Total Excavated volume is to the tune of 14916770.55 cumt. In the expert's report, it has been clarified that the Volume of pit existing in 1998 has already been deducted while arriving at the above figure, i.e. the total excavated Volume mentioned above is that which has been excavated after 2007. Reports of M/s Geonko India Pvt. Ltd. which carried out the 3D Terrestrial Laster Scanning- Photogrammetry in continuation to the survey carried out by M/s. Pilliwar has clarified that the survey has been conducted thus:- “Determination of the Volume of the pit by utilizing the techniques of 3D Terrestrial Laster Scanning (present day) and Satellite date from NRSC (Satellite image of December 2006/January 2007)” [further, determination of Volume of at lease on heap by utilizing the techniques of 3D Terrestrial Laster Scanning (present day) for corroborative purposes.] In spite of the clear indication as above, the Applicant insisted that the Volume of Pit existing in 1998 should be deducted from the total excavated Volume as calculated in the domain expert's report. Apart from the above, they have said that the production of ore as shown in their books in the period from November 2006 till the date of the search i.e. 13.07.2012 should be reduced by the production of ore from 1998 to 2006 to arrive at the actual excavation for the period Nov. 2006 to July, 2012. We fail to appreciate the reason for this. It has also been observed by us that the Department had got the survey conducted by the domain expert, after giving an advance notice to appellant and taking the following measures: 1.Ensuring the presence of personnel from the regulatory authority i.e. Indian Bureau of Mines (IBM)authority i.e. Indian Bureau of Mines (IBM) 2.Ensuring the presence of the partners and GM of the Firm. 3.Videography of the entire proceedings. 4.Employing the latest technology which has the highest degree of accuracy to arrive at the result.degree of accuracy to arrive at the result. It is seen that soon thereafter, the applicant approached the Hon'ble High Court of Madhya Pradesh in a writ petition stating that this survey report should not be given any credence. The applicant was confirmed with these facts and our inference. Instead of coming up with cogent reasons to disprove the survey results, the applicant sought to persuade us to disregard the report on the following grounds: a)Qualification of the Surveyors; b)Affidavit of IBM before High Court; c)The surveyor must have inadvertently, taken ore to be the overburden and overburden to be ore.overburden and overburden to be ore. d)In any case, the quality of the ore excavated is poor and should not have been valued at these exorbitant rates. should not have been valued at these exorbitant rates. We find the above arguments to be unacceptable. Shri Manish Pilliwar was competent to conduct the Total Station Method Survey and the Company engaged to carry out the 3D terrestrial laser The applicant was confirmed with these facts and our inference. Instead of coming up with cogent reasons to disprove the survey results, the applicant sought to persuade us to disregard the report on the following grounds: a)Qualification of the Surveyors; b)Affidavit of IBM before High Court; c)The surveyor must have inadvertently, taken ore to be the overburden and overburden to be ore.overburden and overburden to be ore. d)In any case, the quality of the ore excavated is poor and should not have been valued at these exorbitant rates. should not have been valued at these exorbitant rates. We find the above arguments to be unacceptable. Shri Manish Pilliwar was competent to conduct the Total Station Method Survey and the Company engaged to carry out the 3D terrestrial laser scanning, M/s Geonko India Pvt. Ltd. is being run by IIT graduates. In the affidavit filed by IBM before the High Court, the IBM official have sworn that they stand by the measurements, but are not trained to understand all the aspects of technology used therein. As for the third point, regarding inadvertent mistake, we are not inclined to accept the applicant's claim, as the survey report was signed by the IBM officials, the partners and GM of the Group as well as the surveyors. If such a blunder was committed, this would have been pointed out immediately. We have also been told the entire proceeding was videographed. Evidence would be available there too. As far as the rates are concerned we communicated that for the purpose of valuation, the average / lowest rate can be applied to the extra ore found mined on the premises. The applicants did not agree to the offer. They insisted that since no extra ore was found at all, no addition can be made.” 43-The contention of the respondent is that as per the finding of Settlement Commission it is clear that the report of the domain experts was held to be scientific and authentic and all the objections raised by the petitioners in this regard have been over ruled by the Commission. The respondents have further stated that Shri Manish Pilliwar was engaged as domain expert for doing volumetric measurement and not in his capacity as a registered valuer. It has also been stated that Shri Manish Pilliwar has filed an affidavit on 16/08/2013 before the High Court and has stated on oath that he has experience of making volumetric measurement by the Total Station Technique and has earlier undertaken the same job in twelve other cases for volumetric measurements for stock of Iron Ore, Coal, Dolomite, Dolochar etc. 44-It has also been stated that Manish Pilliwar has the qualification and experience for carrying out volumetric measurements. The respondents have also stated that the qualification of registered valuer imported from Wealth Tax Act read with Wealth Tax Rules is applicable only when Section 142A is invoked. The provisions of section 142A of the Income Tax Act and the provisions of Wealth Tax Act and the Wealth Tax Rules are not at all applicable in the present case i.e. a case where survey is conducted under Section 133A of the Income Tax Act. 45-It has also been stated that Central Board of Direct Taxes has issued instructions i.e. instruction No.5/2011 for taking opinion of technical experts and bringing on record technical evidence in cases involving complex issue of technical nature and substantial revenue after following the directions of the Hon'ble Supreme Court dated 12/08/2010 in the case of CIT, Delhi Vs. Bharti Cellular Ltd. reported in (2010) 193 Taxman 97 (SC). The respondents have further stated that taking help of technical experts of different fields during the course of survey has been an established practice in the Income Tax Department and such help of technical experts is taken when the case involves revenue running into crores. In the present case, the revenue involved was running into crores 45-It has also been stated that Central Board of Direct Taxes has issued instructions i.e. instruction No.5/2011 for taking opinion of technical experts and bringing on record technical evidence in cases involving complex issue of technical nature and substantial revenue after following the directions of the Hon'ble Supreme Court dated 12/08/2010 in the case of CIT, Delhi Vs. Bharti Cellular Ltd. reported in (2010) 193 Taxman 97 (SC). The respondents have further stated that taking help of technical experts of different fields during the course of survey has been an established practice in the Income Tax Department and such help of technical experts is taken when the case involves revenue running into crores. In the present case, the revenue involved was running into crores of rupees and therefore, the action of the department was fully justified in the eyes of law. 46-It has also been stated that a report was prepared by the domain expert with the help of IBM officials and the entire report cannot be put aside. It has also been stated that the respondents have also denied the petitioner's averment that competent authority to do the volumetric measurements is State Government. Much has been said in the return about the report prepared by Shri Pilliwar and associates. It has been stated that assistance was sought from various government organization by Shri Pilliwar and report submitted by Shri Pilliwar is authentic report and has rightly been relied upon by the department as well as by the Settlement Commission. 47-A rejoinder has been filed by the petitioner and it has been stated that the petitioner has offered income of Rs.23.53 Crores before the Settlement Commission and has deposited the tax to the tune of Rs.12.61 Crores and the interest of the revenue is fully protected. The petitioner has further stated that the respondents have made an attempt to mislead this Court and the report of so called domain expert cannot be relied upon. Shri Pilliwar does not even possess basic qualification under Rule 8A of the Wealth Tax Rules and twelve cases in which he has done volumetric analysis are all of heaps of materials lying at the factory and / or godown premises. 48-It has also been stated that Shri Pilliwar does not have domain knowledge nor past experience can be attributed to Mr. Pilliwar and by no stretch of imagination can he be called a domain expert. Moreover, his reputation is also questionable as would be evident from the decision rendered in Writ Petition No.4186/2004. It has also been stated that the partners of the petitioner firm and Shri K. S. S. Reddy were given only the co-ordinates which do not denote any head or tail of the final result. In fact the objection of the petitioner is to the preparation of the final report dated 24/07/2012 by an incompetent person who has no expertise in geology or mining. 49-It has also been stated that the question of basic qualification arose in Writ Petition No.1146/2015 whrein the petitioner was qualified as B. E. but did not hold the relevant degree in mechanical or civil engineering and was not found qualified by this Court to be a registered valuer for the purposes of Income Tax Department. It has been further stated that Shri Pilliwar does not have the basic qualification of a geologist and he is merely qualified as 'Bachelor in Civil Engineering'. 50-It has been further stated that even the certificate issued to Shri Pilliwar by the Income Tax Department authorizes 49-It has also been stated that the question of basic qualification arose in Writ Petition No.1146/2015 whrein the petitioner was qualified as B. E. but did not hold the relevant degree in mechanical or civil engineering and was not found qualified by this Court to be a registered valuer for the purposes of Income Tax Department. It has been further stated that Shri Pilliwar does not have the basic qualification of a geologist and he is merely qualified as 'Bachelor in Civil Engineering'. 50-It has been further stated that even the certificate issued to Shri Pilliwar by the Income Tax Department authorizes him to value immovable property other than agricultural lands, plantations, forests, mines and quarries. It has been stated by the petitioner that Shri Pilliwar is not authorized even by the Income Tax Department to value mines and quarries. 51-It has also been stated that Shri Pilliwar is not an expert in respect of total station method and 3D Terrestrial Laster Scanning Method. His contention is that the State Government has also filed a report on 05/07/2013. Lastly it has been stated that the order of Settlement Commission as it is based upon the use of technology by Shri Pilliwar without considering whether he has the necessary qualification or not is bad in law. It has also been stated that the Settlement Commission without considering the fact that IBM personnel have stated in the affidavit that they were not aware of the technology used by Shri Pilliwar as given to the IBM officials at the time of volumetric analysis was carried out, has erred in law and facts. It has also been stated that the Settlement Commission has safely ignored the factum of withdrawal of Writ Petition No.8898/2012 by the petitioner without considering the specific liberty granted by this Court to raise all contentions before the Settlement Commission. It has also been stated that the report of the State Government was erroneously turned down as it was filed in judicial proceedings by the State of Madhya Pradesh. 52-A reply to the rejoinder has been filed and this Court really don't understand as to why the learned counsel for the Income Tax Department has filed her affidavit alongwith the reply to the rejoinder. Such a practice is never heard of. The officers of the department should have filed an affidavit along with the reply to the rejoinder. However, in the reply to the rejoinder the respondents have defended the report submitted by the Shri Manish Pilliwar and have stated that Shri Manish Pilliwar is listed in the panel of Bank approved valuers of Bank of India, Punjab National Bank, Oriental Bank of Commerce, Indian Oil Corporation, Hindustan Petroleum Corporation Ltd., Bharat Petroleum Corporation Ltd, etc. It has been stated that the report submitted by Shri Pilliwar does not warrant any interference as the IBM officials and M/s. Geonka India Pvt. Ltd. were also present at the time report was prepared. Learned counsel for the respondent has placed reliance upon a judgment delivered in the case ofAjmera Housing Corporation & Anr. Vs. Commissioner of Income Tax reported in (2010) 234 CTR (SC) 118 and his contention is that scope of interference under Article 226 is quite limited in the matter of order passed by the Settlement Commission. The respondents prays for dismissal of the writ petition. 53-Heard learned counsel for the parties and perused the record. 54-The undisputed facts of the case reveal that the petitioner No.1 is a partnership firm and the other petitioners are partners / erstwhile partner of petitioner No.1 firm. They are aggrieved by order dated 10/07/2012 passed by Settlement Commission, Principal Bench, New Delhi under Section 245D(4) of the Income Tax Act declaring settlement