M/S.global Exportsrepresented By Its v. Income Tax Settlement Commission, Additional Bench, Chennai, Ministry Of Finance, Department Of Revenue, 640, Anna Salai, Nandanam, Chennai – 600 035

IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED : 17.04.2021 CORAM THE HONOURABLE MR. JUSTICE S.M.SUBRAMANIAMW.P.Nos.663 to 665 of 2018andW.M.P.Nos.830 to 835 of 2018 Mr.Sridhar AnandRepresented by his Legal HeirLate Dr.P.Anand1B, A Block, Anugraha Apartments19, Nungambakkam High Road,Nungambakkam,Chennai – 600 034. ..Petitioner in W.P.No.663 of 2018 M/s.Anand Granite Exports Private LimitedRepresented by its Director,Mr.Sridhar Anand1B, A Block, Anugraha Apartments19, Nungambakkam High Road,Chennai – 600 034. ..Petitioner in W.P.No.664 of 2018 M/s.Global ExportsRepresented by its Partner,Mr.Sridhar Anand1B, A Block, Anugraha Apartments19, Nungambakkam High Road,Chennai – 600 034. ..Petitioner in W.P.No.665 of 2018 Vs. 1.Income Tax Settlement Commission, Additional Bench, Chennai, Ministry of Finance, Department of Revenue, 640, Anna Salai, Nandanam, Chennai – 600 035. 2.Deputy Commissioner of Income Tax, Central Circle 1(1), Chennai, New No.46, Mahatma Gandhi Road, Chennai – 600 034...Respondents in all W.Ps Prayer in W.P.No.663 of 2018 : Writ Petition filed under Article226 of the Constitution of India, to issue a Writ of https://hcservices.ecourts.gov.in/hcservices/ Certiorarified Mandamus, calling for the records of the 1[st]respondent contained in its impugned order bearingNo.TN/CN/51/2016-17/3-IT dated 16.11.2017 and to quash the sameas arbitrary, unjust and illegal, and to consequently, directthe 1[st] respondent to reconsider the application filed by thepetitioner bearing No.TN/CN/51/2016-17/3-IT and pass a freshorder under Section 245D(4) of the Income Tax Act, 1961 afteraffording the petitioner a sufficient opportunity of beingheard, in accordance with law. Prayer in W.P.No.664 of 2018 : Writ Petition filed under Article226 of the Constitution of India, to issue a Writ ofCertiorarified Mandamus, calling for the records of the 1[st]respondent contained in its impugned order bearingNo.TN/CN/51/2016-17/2-IT dated 16.11.2017 and to quash the sameas arbitrary, unjust and illegal, and to consequently, directthe 1[st] respondent to reconsider the application filed by thepetitioner bearing No.TN/CN/51/2016-17/2-IT and pass a freshorder under Section 245D(4) of the Income Tax Act, 1961 afteraffording the petitioner a sufficient opportunity of beingheard, in accordance with law. Prayer in W.P.No.665 of 2018 : Writ Petition filed under Article226 of the Constitution of India, to issue a Writ ofCertiorarified Mandamus, calling for the records of the 1[st]respondent contained in its impugned order bearingNo.TN/CN/51/2016-17/44-IT dated 16.11.2017 and to quash the sameas arbitrary, unjust and illegal, and to consequently, directthe 1[st] respondent to reconsider the application filed by thepetitioner bearing No.TN/CN/51/2016-17/44-IT and pass a freshorder under Section 245D(4) of the Income Tax Act, 1961 afteraffording the petitioner a sufficient opportunity of beingheard, in accordance with law. For Petitioner: Mr.R.Sivaraman [in all W.Ps] For Respondents : Mr.A.P.Srinivas Senior Standing Counsel [For Income Tax] [in all W.Ps]COMMON ORDER The orders of the Settlement Commission dated 16.11.2017are under challenge in the present writ petitions. 2. Admittedly, the petitioner filed applications underSection 245(C) of the Income Tax Act before the SettlementCommission to resolve the disputes with the Income TaxDepartment. The said applications were adjudicated by the https://hcservices.ecourts.gov.in/hcservices/ For Petitioner: Mr.R.Sivaraman [in all W.Ps] For Respondents : Mr.A.P.Srinivas Senior Standing Counsel [For Income Tax] [in all W.Ps]COMMON ORDER The orders of the Settlement Commission dated 16.11.2017are under challenge in the present writ petitions. 2. Admittedly, the petitioner filed applications underSection 245(C) of the Income Tax Act before the SettlementCommission to resolve the disputes with the Income TaxDepartment. The said applications were adjudicated by the https://hcservices.ecourts.gov.in/hcservices/ Settlement Commission and the learned counsel for the petitionerreiterated that the Settlement Commission has misunderstood thefacts and circumstances and formed an erroneous opinion anddismissed the applications. Thus, the petitioner must beprovided with an opportunity to re-adjudicate the issues beforethe Settlement Commission and to clarify the facts, enabling theSettlement Commission to decide the issues afresh. 3. The learned Senior Standing counsel appearing onbehalf of the respondents/Department made a submission that itis a pre-condition that an assessee filing an application underSection 245(C) must come with full and true disclosure and withclean hands. Once it is established that true and fulldisclosure are not made and the facts are controverted, then theapplication itself is to be rejected in limini, in view of thepre-requisite condition contemplated under Section 245(C) of theIncome Tax Act. 4. The complete facts and circumstances as narrated inthe writ petitions become unnecessary, in view of the fact thatan assessee filing an application under Section 245(C) of theIncome Tax Act must establish at the first instance that trueand full disclosure of income is made before the SettlementCommission. In the event of controversy or discrepancy in thematter of true and full disclosure of income, then theSettlement Commission is empowered to reject the application inlimini. 5. The decisions arrived by the Settlement Commissionwith reference to the applications submitted by the petitioner,which reads as under: “ 7.1 We have considered the submissions made bythe learned CIT (DR) and learned AR and the reports ofthe Pr.CIT including information received from FT & TRDivision and the relevant records. On the freshsubmissions relating to foreign bank accounts anddocuments also further opportunity was given to thelearned AR. As regard the foreign bank accounts ordeposits or investments and income from M/s.UniversalConstruction Supplies, FZE, Sharjah, UAE and flat atDubai Marina, UAE of the applicant (Late) Dr.P.Anand,it is found that there is no disclosure of these factsin the SOF or in the returns. The Learned AR could notexplain anything about these aspects during the courseof hearing. Further, the business activities of theapplicant and the company M/s.Anand Granite Exports PvtLtd., (represented by the applicant as Director) inDubai have also not been disclosed in the SOF of therespective applications or in their returns of Income filed. Thus, the disclosure / statements made is notfull and true. The Commission is of the view that thereis concealment of facts which require deeperinvestigation into the case of the applicantparticularly with reference to foreign accounts/assets.The AR's stand that the applicant's legal heir whosigned the settlement application is not aware ofapplicant's dealings is not acceptable as the evidencesin the documents received from UAE Authorities revealedthat the legal heir Sri Sridhar Anand is also involvedin these dealings/transactions. Further, in the absenceof full and true facts in the SOF to the settlementapplication, the Commission feels that justice will bedone only by making further detailed investigation forproper assessment by the Department. Any adhocsettlement may not serve the purposes of provisions ofthe I.T. Act. 7.2. In the case of applicant various foreignbank accounts in Dubai, China and U.K have been foundand that the enquiry in relation to these accounts arein progress. As Late Dr.P.Anand was the ManagingDirector of Anand Granite Exports Private Ltd., duringthe period covered in the settlement application, it islikely that the affairs of the company may be foundinterlinked with these bank accounts. 7.3 Further, regarding the disclosure made inthe SOF, the applicant has failed to give the detailsof manner in which the income was earned. The learnedAR pleaded ignorance of the manner of earning theincome on the ground that Late Dr.P.Anand alone couldgive these details. Hence, the manner in which theincome earned is also stands unexplained. 7.4 As the disclosures is not full and true andthe manner in which the income derived is notexplained, the application is not maintainable.Reliance is placed in the cases of CIT Vs ITSC 310 ITR10, ACE Investments [2003] 264 ITR 571 (Mad) andAjmeera Housing [2010] 193 TAXMAN 193(SC). 7.5 Thus, on the grounds that the disclosure isnot full and true and that there is deficiency inexplaining the facts gathered by the Department fromUAE and the manner in which the income earned, theterms of settlement are not provided for. Theapplication is thus rejected. Hence the proceedingsbefore the Settlement Commission shall abate on thespecified date as defined in Explanation (ca) to sub-section(1) of Section 245HA of the I.T.Act. TheDepartment may take further course of action inaccordance with law.” 7.5 Thus, on the grounds that the disclosure isnot full and true and that there is deficiency inexplaining the facts gathered by the Department fromUAE and the manner in which the income earned, theterms of settlement are not provided for. Theapplication is thus rejected. Hence the proceedingsbefore the Settlement Commission shall abate on thespecified date as defined in Explanation (ca) to sub-section(1) of Section 245HA of the I.T.Act. TheDepartment may take further course of action inaccordance with law.” 7.1 We have considered the submissions made bythe learned CIT (DR) and learned AR and the reports ofthe Pr.CIT including information received from FT & TRDivision and the relevant records. On the freshsubmissions relating to foreign bank accounts anddocuments also further opportunity was given to thelearned AR. As regard the foreign bank accounts ofLate Dr.P.Anand, Director of the applicant company(i.e., A/c.No.127591 in Commercial Bank of Dubai), itis found that these foreign bank accounts were notdisclosed by the applicants in their SOF or in thereturn of income filed before the Department. TheLearned AR also could not explain these transactionsduring the course of hearing. Further, as per theevidence furnished by UAE Authority, the applicantcompany obtained license on 28.10.2013 to do trading ofbuilding and constructions materials. But the businessactivities of the applicant company in Dubai and anyincome derived there from is also not disclosed in theSOF or in the returns of income filed before theDepartment. Thus, the disclosure made is not full andtrue. Further, the names of the maistries given forverification, do not tally with that of the names givenin the sworn statements, SOF and further, submissionsmade during the course of hearing. The Commission is ofthe view that there is concealment of facts whichrequire deeper investigation into the case of theCompany and the Director also, as the transactions areinterlinked. In the absence of full and true facts inthe SOF filed with the settlement application, theCommission also feels that justice will be done only bymaking further detailed investigation for properassessment of correct income by the Department. Anyadhoc settlement may not serve the purposes ofprovisions of the I.T.Act. Further, the applicantfailed to extend full co-operation to furnish andexplain the true nature of entries / transactions withBannari Amman Sugars Ltd.7.2. In the case of Late Dr.P.Anand, theDirector of the applicant company also various foreignbank accounts in Dubai, China and U.K have been foundand that the enquiry in relation to these accounts arein progress. As Late Dr.P.Anand was the ManagingDirector of the company during the period covered inthe settlement application, it is likely that theaffairs of the company may be found interlinked withthese bank accounts.7.3 Further, regarding the disclosure made inthe SOF, the applicant has failed to give the detailsof manner in which the income was earned. The learned AR pleaded ignorance of the manner of earning theincome on the ground that Late Dr.P.Anand alone couldgive these details. 7.4 Accordingly, we find that disclosures isnot full and true and the manner in which the incomederived was not explained. Hence, the application isnot maintainable. Reliance is placed in the cases ofCIT Vs ITSC 310 ITR 10, ACE Investments [2003] 264 ITR571 (Mad) and Ajmeera Housing [2010] 193 TAXMAN 193(SC). AR pleaded ignorance of the manner of earning theincome on the ground that Late Dr.P.Anand alone couldgive these details. 7.4 Accordingly, we find that disclosures isnot full and true and the manner in which the incomederived was not explained. Hence, the application isnot maintainable. Reliance is placed in the cases ofCIT Vs ITSC 310 ITR 10, ACE Investments [2003] 264 ITR571 (Mad) and Ajmeera Housing [2010] 193 TAXMAN 193(SC). 7.5 Thus, on the grounds that the disclosure isnot full and true and that there is deficiency inexplaining the facts gathered by the Department fromUAE and the manner in which the income earned, theterms of settlement are not provided for. Thesettlement application is thus rejected. Hence theproceedings before the Settlement Commission shallabate on the specified date as defined in Explanation(ca) to sub-section(1) of Section 245HA of the I.T.Act.The Department may take further course of action inaccordance with law.” TN/CN51/2016-17/44-IT 6.1 When the application of the presentapplicant was allowed to be proceeded with vide orderu/s 245D(1) dated 12.07.2016, vide para 4.2 of thesaid order it was clearly mentioned as under: “.......the Applicant firm has paidthe additional tax and interest thereon forthe A.Ys.covered in the Settlement Applicationand such payments of tax exceeds theprescribed limit as per explanation (vi)(B)under proviso (ia) of Section 245C(1), sincethe partner of the Applicant firm, Dr.P.Anandis a Director having substantial interest inthe company, Anand Granite Exports Pvt.Ltd.,specified person. The A.R.further submittedthat they are also covered as per explanation (v) under proviso (ia) of Section 245C(1).Mr.Sridhar Anand has substantial interest bothin the Applicant firm as well as in thecompany,AnandGraniteExportsPvt.Ltd.,......” 6.2 Whereas, the applications in respect ofLate Dr.P.Anand and M/s.Anand Granite Exports Pvt.Ltd., have been rejected by the Commission u/s 245(D)vide orders dated 16.11.2017 on the grounds that theapplications are not maintainable as the disclosure isnot full and true and there is deficiency inexplaining the manner in which the income has been earned. Further, the applicant has suppressed theexport sales receipts amounting to Rs.1.32 crores forthe AY 2008-09, which was admitted only at the time offinal hearing after verification. Hence, the detailsdisclosed in the application and SOF is also not fulland true to this extent. As all these threeapplications are inter connected and linked, the termsof settlement are not provided for in the case of theapplicant firm also. The settlement application in thecase of M/s.Global Exports is thus rejected. Hence theproceedings before the Settlement Commission shallabate on the specified date as defined in Explanation(ca) to sub-section (1) of Section 245HA of theI.T.Act. The Department may take further course ofaction in accordance with law.” 6. As far as the above factual findings are concerned,High Court cannot re-appreciate the evidences or otherwise. Thefindings of the Settlement Commission reveals that true and fulldisclosure of income had not been made by the petitioner and thefacts, which were not stated along with the applications werealso considered by the Settlement Commission. 7. Perusal of the reasons given by the SettlementCommission reveals that the petitioner had not approached theSettlement Commission with true and full disclosure and such afinding cannot be interfered with, in view of the fact that thescope of Section 245(C) of the Income Tax Act is limited andonly in the event of approaching the Settlement Commission withclean hands, the settlement can be arrived and not otherwise. 6. As far as the above factual findings are concerned,High Court cannot re-appreciate the evidences or otherwise. Thefindings of the Settlement Commission reveals that true and fulldisclosure of income had not been made by the petitioner and thefacts, which were not stated along with the applications werealso considered by the Settlement Commission. 7. Perusal of the reasons given by the SettlementCommission reveals that the petitioner had not approached theSettlement Commission with true and full disclosure and such afinding cannot be interfered with, in view of the fact that thescope of Section 245(C) of the Income Tax Act is limited andonly in the event of approaching the Settlement Commission withclean hands, the settlement can be arrived and not otherwise. 8. Relying on the categorical findings of the SettlementCommission, the learned Senior Standing counsel appearing onbehalf of the respondents cited the judgment of the High Courtof Madras in the case of S.V.Shankar Vs. Settlement Commission,reported in [2007] 292 ITR 633 (Madras). The High Court made thefollowing observations: “6. It may be noted that the jurisdiction ofthis court under article 226 of the Constitution ofIndia is not that of the appellate court. Theprovision for settlement under Chapter XIX-A is in thenature of a statutory arbitration to which a personmay submit himself voluntarily. Hence, the power toreview that may be exercised under article 226 of theConstitution of India could only be in cases wherethere are mistakes apparent on the face of the record,but may not be exercised on the ground that thedecision is erroneous on merits. The decisions of theSupreme Court reported in [1993] 201 ITR 611)(Jyotendrasinhji v. S.I. Tripathi) and [1997] 223 ITR 840(Kuldeep Industrial Corporation v. ITO) clearlylays down the parameters of the scope of the enquiryby the High Court under article 226 or by the SupremeCourt under article 136 of the Constitution of India.In the circumstances, where the Commission has, on thebasis of materials on record, come to a decision, itwould not be open to the High Court to substitute itsview on the materials disclosed in preference to thatof the Settlement Commission. In [1993] 204 ITR 616(Shriyans Prasad Jain v. ITO), the apex court heldthat the court could not go into the questions of factrecorded by the Commission. Considering the limited jurisdiction and the fact thatafter due appreciation of the facts, the SettlementCommission had arrived at its finding, we do not findany merit to accept the plea of the petitioner herein.Consequently, the writ petition stands dismissed.There will be no order as to costs.” 9. In the case of Abdul rahim Vs. Income Tax SettlementCommission, Chennai, reported in [2018] 96 taxmann.com 571(Madras), the High Court made the following observations:“16. It is to be noted at this juncture thatthe Settlement Commission is vested with power toreject the Settlement Application at three stages, asprovided under Section 245D of the said Act.Rejection at the threshold is contemplatedunder Section 245D(1). Rejection after notice to theRevenue and on perusing the report filed by theRevenue could be made under Section 245D(2). Whilerejection under Section 245D(1) is a dismissal at theadmission stage, rejection under Section 245D(2) isafter notice to the revenue and on being satisfiedwith non disclosure of true and full undisclosedincome. The third stage of rejection is contemplatedunder Section 245D(4), after directing the Revenue tofurnish records and thereafter to conduct aninvestigation or enquiry. In all these stages, thesatisfaction of the Commission with regard to trueand full disclosure of income must continue to existso as to carry over the proceedings from one stage toanother and finally, to pass an order determining theterms of settlement as provided under Section 245D(6). In other words, true and full disclosure is thelife line, satisfaction of the same should remain tolive in the mind of the Commission till the finalorder is passed. On the other hand, if the Commissionfinds, at any stage of the proceedings under Section245D that the applicant has not come before theCommission with clean hands and by disclosing true Commission, Chennai, reported in [2018] 96 taxmann.com 571 and full income, it is empowered to reject theapplication, thereby driving the applicant to facethe regular assessment proceedings. The applicantcannot, as a matter of right, seek the Commission tocarry over the application from one stage to another,notwithstanding the fact as to whether true and fulldisclosure of income was made or not. In other words,the applicant who approaches the Commission,bypassing the regular assessment proceedings, mustprovide material facts without any suppression andestablish that the disclosure of income in theapplication is true and full in its strict sense.Otherwise, the applicant cannot find fault with theCommission in showing him the door to face theregular assessment proceedings. The term "true andfull disclosure" does not mean that whatever theamount shown by the applicant, which according to himis undisclosed income, is in fact, the true and fulldisclosure. It may be the disclosure of undisclosedincome in the view of the applicant. But whether suchdisclosure is "true and full", in its strict sense,is a question that should fetch an answer in favourof the petitioner/applicant at all stages even afterhearing the revenue. In other words, such disclosureshould not give room for deduction of concealed factwith regard to any other income either after gettinga report from the Revenue or conducting aninvestigation or enquiry at the instance of theCommission.” 10. Relying on the above judgments, the learned SeniorStanding counsel is of an opinion that the writ petitions arenot entertainable as the findings of the Settlement Commissionerare unambiguous regarding the true and full disclosure of incomeby the writ petitioner. When the pre-requisite condition forfiling an application under Section 245(C) of the Income Tax Acthas not been fulfilled, then there is no reason to entertain thewrit petitions under Article 226 of the Constitution of India. 10. Relying on the above judgments, the learned SeniorStanding counsel is of an opinion that the writ petitions arenot entertainable as the findings of the Settlement Commissionerare unambiguous regarding the true and full disclosure of incomeby the writ petitioner. When the pre-requisite condition forfiling an application under Section 245(C) of the Income Tax Acthas not been fulfilled, then there is no reason to entertain thewrit petitions under Article 226 of the Constitution of India. 11. Section 245(C) of the Income Tax Act contemplates'Application for Settlement of cases'. Sub clause 1 enumeratesthat 'An assessee may, at any stage of a case relating to him,make an application in such form and in such manner as may beprescribed, and containing a full and true disclosure of hisincome which has not been disclosed before the AssessingOfficer, the manner in which such income has been derived, theadditional amount of income-tax payable on such income and suchother particulars as may be prescribed, to the SettlementCommission to have the case settled and any such applicationshall be disposed of in the manner hereinafter provided.” 12. Section 245(D) contemplates 'Procedure on receipt ofan application under section 245C'. Therefore, to entertain anapplication for settlement, these preliminary factors are to beconsidered by the Settlement Commission. Once on facts,Settlement Commission made a finding that the petitioner has notapproached the Commission with full and true disclosure, thenthere is no reason to proceed further to settle the disputesbetween the parties. 13. The learned counsel appearing on behalf of the writpetitioner mainly contended that on 09.11.2017, copies of theBank statement and other documents were handed over to thepetitioner for his comments and the cases were adjourned to10.11.2017. Thus, no opportunity was provided to the petitioner,enabling him to explain about the statements and the documentsfurnished to him. Such an opportunity of one day provided isinsufficient to verify the documents as well as the statementsand therefore, further opportunity is to be given to thepetitioner, enabling him to clarify certain factual aspects withreference to the report of the Commissioner. 14. The learned counsel for the petitioner is of anopinion that the Settlement Commission made an erroneous findingregarding the facts and circumstances and regarding theinvolvement of the writ petitioner along with his father, whowas maintaining a Bank account in UAE. In this context, thelearned counsel for the petitioner solicited the attention ofthis Court regarding the procedures as contemplated underSection 245 (D) of the Income Tax Act. Relying on theprocedures, the learned counsel for the petitioner is of anopinion that an opportunity is mandatory and such a valuableopportunity is to be granted in full, enabling the assessee toclarify or explain such factual matrix. The applicationssubmitted by the petitioner were not made invalid under Section245(D)(2C) of the Act. While so, under Sub Clause 4 to Section245(D), an opportunity is to be provided to the petitioner andan adjudication is also required. When the Settlement Commissionis empowered to adjudicate the issues with reference to theprovisions of the Income Tax Act, then regarding additionalinformations or additional income are also to be adjudicated andthe correctness of such disclosures are also to be considered.However, in the present cases, no such findings are arrived noran adjudication undertook with reference to Section 245(D)(4) ofthe Act. Thus, the orders of the Settlement Commission areperverse and liable to be set aside and further, opportunity isto be provided to the petitioner, enabling him to clarify andexplain the factual aspects for the purpose of settling thedisputes. 15. The learned counsel for the petitioner contended that 15. The learned counsel for the petitioner contended that even the report of the Commissioner did not speak about theinvolvement of the petitioner, who is the son of Dr.P.Anand, inwhose name, the Foreign Account was found. In this regard, thereport of the Commissioner reveals that the petitionerMr.Sridhar Anand along with his father, Dr.P.Anand, purchased anapartment at No.403, La Residencia Del Mar, Dubai Marina, Plot6L, District 6. Based on the report of the Commissioner, theSettlement Commission formed an opinion that the documentsreceived from UAE Authorities revealed that the legal heir SriSridhar Anand is also involved in these dealings/transactions.Such factual findings made by the Settlement Commission cannotbe further adjudicated by the High Court under Article 226 ofthe Constitution of India. Such disputed facts can beadjudicated by the parties with reference to the documents andevidences before the authorities competent at the time ofregular assessment to be made by the authority. Thus, the saidcontention deserves to be rejected. 16. This Court is of the considered opinion that Section245(D) cannot be read in isolation. Section 245(D) is to be readalong with 245(C). Both the provisions are to be read togetherto form an opinion and to cull out the spirit involved in thematter of receiving an application for settlement of cases.Section 245(C) contemplates 'Application for Settlement ofcases'. Once an application is filed, it is to be verified,whether the application is filed with reference to theingredients contemplated under Section 245(C). Once all suchingredients are fulfilled, then the Settlement Commission shouldfollow the procedures as contemplated under Section 245(D).Under Section 245(D), various stages are provided. At anystage, if the Settlement Commission formed an opinion that therewas no full and true disclosure with reference to the factsnarrated in the application, then the Settlement Commission isempowered to reject the application filed under Section 245(C).Thus, the procedural aspects enumerated under Section 245(D) isto conduct the enquiry for the purpose of settlement and such aprocedural aspects are to be read along with the spirit of theprovision as contemplated under Section 245(C) of the Act. 17. Conjoint reading of these provisions would revealthat the report of the Commissioner of Income Tax, opportunityfor the petitioner to convert the materials and all such aspectsare provided, enabling the petitioner to establish his caseswith reference to the applications filed and not in respect ofthe other income or other materials. 18. It is to be understood that the procedures ascontemplated under Section 245(D) cannot travel beyond the scopeof the applications filed under Section 245(C)of the Income TaxAct. If Section 245(D), the procedures as contemplated areallowed to go beyond the scope of Section 245(C), then https://hcservices.ecourts.gov.in/hcservices/ 17. Conjoint reading of these provisions would revealthat the report of the Commissioner of Income Tax, opportunityfor the petitioner to convert the materials and all such aspectsare provided, enabling the petitioner to establish his caseswith reference to the applications filed and not in respect ofthe other income or other materials. 18. It is to be understood that the procedures ascontemplated under Section 245(D) cannot travel beyond the scopeof the applications filed under Section 245(C)of the Income TaxAct. If Section 245(D), the procedures as contemplated areallowed to go beyond the scope of Section 245(C), then https://hcservices.ecourts.gov.in/hcservices/ undoubtedly, the very spirit of Section 245(C) for settlement ofcases are diluted and further, it will result in usurping thepowers of the Assessing Officer and other competent authoritiesfor initiation of actions under the other provisions of theIncome Tax Act. Every authority is empowered to exercise hispower within the parameters and within the ambit of theprovisions of the Act. As far as the settlement cases areconcerned, the application filed under Section 245(C) is to beentertained and to be dealt with in accordance with theprocedures as contemplated under Section 245(D) and theprocedures as contemplated under Section 245(D) would notprovide powers to the Settlement Commission to travel beyond thescope of the provisions and with reference to Section 245(C).Procedures are contemplated in order to cull out the truthregarding the true and full disclosure to be made along with theapplication filed under Section 245(C) and therefore, at anystage of the enquiry, the Settlement Commission, if able to forman opinion that an application is not filed with true and fulldisclosure, then such an application shall be rejected. The verylegislative intention of the procedures formulated under Section245(D) is to ensure that the application for settlement of casesare considered in accordance with Section 245(C) and therefore,the powers of the Settlement Commission is limited to the extentof the scope of Section 245(C) and the other provisions of theAct can be exercised only in order to formulate an opinion andnot to make a regular assessment under the Act, which is thepower to be exercised by the competent authority and certainlynot by the Settlement Commission. 19. In this regard, it is relevant to consider thejudgment of the Hon'ble Division Bench of the Madras High Courtin the case of Canara Jewellers Vs. Settlement Commission,reported in [2009] 184 Taxman 491 (Madras), and the relevantparagraphs are extracted hereunder: “8. The provision of Section 245C of the IncomeTax Act, 1961 fell for consideration before the SupremeCourt and High Courts from time time. In C.I.T. vs.Express Newspapers Ltd., (1994) 206 I.T.R. 443 (SC),the Supreme Court held that in an applicationunder Section 245C of the Act, for settlement ofapplicant's income-tax case, there should be disclosureof income not earlier disclosed before the AssessingOfficer. If the Assessing Officer or the income-taxauthority has already discovered it and either hasgathered the material to establish the particulars ofsuch income or fraud fully or is at a stage ofinvestigation/enquiries, then the disclosure cannot besaid to be voluntary or in good faith and the assesseecannot be allowed to take advantage of thecomparatively easy course of settlement. The scope of Section 245C of the Income Tax Act, 1961 was alsonoticed by this Court in Ace Investments Ltd. vs.Settlement Commission, (2003) 264 I.T.R. 571 (Mad),wherein a learned single Judge of this Court held thatfull and true disclosure of income by the assessee is acondition precedent for settlement of cases and forgrantofimmunityfrompenaltyandprosecution. Sections 245C and 245H of the Income TaxAct, 1961 contemplate full and true disclosure by theapplicant of income and the manner in which such incomehas been derived. When once it is held that anapplication filed for settlement of cases is notmaintainable on the ground that the applicant has notmade full and true disclosure of the income, proceedingwith such application and deciding the issue would beoutside the power of the Settlement Commission, as theapplication itself is not in conformity with Section245C(1) of the Act. A similar view was expressed by aDivision Bench of this Court in Dr. C.M.K. Reddy vs.Settlement Commission, (2008) 306 I.T.R. 403 (Mad). 11. So far as Section 245F is concerned, thoughthe Settlement Commission is empowered to have allpowers which are vested in an Income Tax Authorityunder the Act, in addition to the power conferred underChapter XIXA, but such power can be exercised for thepurpose of procedure of settlement of applicationunder Section 245C and not for re-assessment of tax ofa particular year which is vested with the AssessingAuthority.” 20. The High Court of Delhi in the case of Rohit KumarGupta Vs. Principal Commissioner of Income Tax, Central-II,reported in [2019] 109 taxmann.com 257(Delhi), held as follows:“45. The above decision interprets Section245D (4) as a substantive provision from where thepowers of the ITSC to pass 'such order as if it thinksfit' arises. The next question that arises is whetherthe expression 'such orders if it thinks fit' wouldinclude the power to pass an order rejecting anapplication. If the interpretation placed by thePetitioners on this provision is accepted it wouldmean that after having allowed the applications to beproceeded with in terms of its order passedunder Section 245D (1) of the Act, the ITSC cannot atthis stage, after the report of the Commissioner hasbeen submitted to it pursuant to an orderunder Section 245D (2C) of the Act, dismiss theapplication at all and that it would necessarily have to pass an order providing for the terms ofsettlement. However, this does not appear to be acorrect understanding of the ambit of the expression'such orders it deems fit.' 47. The Court is unable to understand how theabove decision helps the Petitioners in support oftheir contention that the ITSC cannot at the stage ofpassing of final order under Section 245D(4) of theAct, reject an application for failure of theApplicant to make a full and true disclosure and themanner in which the undisclosed income was derived.” 21. In the present cases, the findings of the SettlementCommission are unambiguous and specific facts and circumstanceswere also relied on by the Settlement Commission to arrive adecision regarding true and full disclosure by the petitioner.Such a finding of fact need not be interfered with by the HighCourt under Article 226 of the Constitution of India, unlesssuch facts are found to be error apparent. When there was anadjudication of facts and the Settlement Commission arrived afinding that factually the petitioner has not established thathe filed applications under Section 245(C) with true and fulldisclosure, then the High Court is expected to exerciserestraint in entertaining a writ proceedings under Article 226of the Constitution of India. 21. In the present cases, the findings of the SettlementCommission are unambiguous and specific facts and circumstanceswere also relied on by the Settlement Commission to arrive adecision regarding true and full disclosure by the petitioner.Such a finding of fact need not be interfered with by the HighCourt under Article 226 of the Constitution of India, unlesssuch facts are found to be error apparent. When there was anadjudication of facts and the Settlement Commission arrived afinding that factually the petitioner has not established thathe filed applications under Section 245(C) with true and fulldisclosure, then the High Court is expected to exerciserestraint in entertaining a writ proceedings under Article 226of the Constitution of India. 22. In the present cases, the petitioner could not ableto establish that he approached the Settlement Commission withclean hands and the element of true and full disclosure ascontemplated under Section 245(C) had not been establishedbefore the Settlement Commission and therefore, there is noperversity or infirmity as such in respect of the findingsarrived. 23. It is brought to the notice of this Court that theSettlement Commission has already been abolished with effectfrom 01.02.2021. This being the factum established, the writpetitions fail and accordingly, all the three writ petitionsstand dismissed. No costs. Consequently, connected miscellaneouspetitions are closed. Kak https://hcservices.ecourts.gov.in/hcservices/ To 1.Income Tax Settlement Commission, Additional Bench, Chennai, Ministry of Finance, Department of Revenue, 640, Anna Salai, Nandanam, Chennai – 600 035. Additional Bench, Chennai, Ministry of Finance, Department of Revenue, 640, Anna Salai, Nandanam, Chennai – 600 035. 2.Deputy Commissioner of Income Tax, Central Circle 1(1), Chennai, New No.46, Mahatma Gandhi Road, Chennai – 600 034. Central Circle 1(1), Chennai, New No.46, Mahatma Gandhi Road, Chennai – 600 034. +3cc to Mr.R.Sivaraman, Advocate, S.R.No.23332 +3cc to Mr.A.P.Srinivasan, Advocate, S.R.No.23306 to 23308 W.P.Nos.663 to 665 of 2018SKY(CO)GN(07/06/2021)