M/S.kesaria Marketing Private Ltd v. Assistant Commissioner Of Income Tax, Company Circle, Ii (4), V Floor, New Block, Room

IN THE HIGH COURT OF JUDICATURE OF MADRAS DATED: 09.08.2019 CORAM: THE HONOURABLE MR. JUSTICE M.S. RAMESH W.P.No.27088 of 2009 andM.P.No.1 of 2009 M/s.Kesaria Marketing Private Ltd.,31, Kent Apartments,26, Ritherdon Road,Vepery, Chennai - 600007.Rep. by its DirectorSri. Umed C.Mehta...PetitionerVs 1. Assistant Commissioner of Income Tax, Company Circle, II (4), V Floor, New Block, Room No.514, 121, Nungambakkam High Road, Chennai - 600034. 2. The Income Tax Officer (OSD), Company Circle-II(4) (i/c), Room No.514, New Block, 121, Nungambakkam High Road, Chennai - 600034. 3. Income Tax Settlement Commission, Additional Bench, Sathguru Complex, 640, Anna Salai, Chennai - 600035....Respondents PRAYER: Writ Petition filed under Article 226 of theConstitution of India, praying to issue a writ of Certiorari, tocall for the records pertaining to order dated 13.08.2009 underSection 281-B of the Income Tax Act, 1961 with reference toG.I.No.AAACK1447N issued by the Assistant Commissioner of IncomeTax, Company Circle II(4), Chennai - 34, the first respondentherein addressed to M/s.Umed Investments & Marketing Co andquash the same. For Petitioner : Mr.V.S.Jayakumar For Respondents: Mr.J.Narayanasamy, SSC https://hcservices.ecourts.gov.in/hcservices/ O R D E R When Sri.Umed C.Mehta had filed a Settlement ApplicationNo. TN/CN7/2009-10/2/IT before the Income Tax SettlementCommission, who is the 3[rd] respondent herein, he had stated thatthe undisclosed income admitted in the Settlement Applicationwas a commission earned from accommodation transaction withMr.Parasmal Jain of M/s.Kawarlal Group. This explanation wasdisbelieved and the Settlement Application came to be rejectedon 23.10.2009. As against the rejection order of the 3[rd]respondent, the petitioner has filed this writ petition. 2. In consequence to the rejection of the SettlementApplication of Mr.Umed C.Mehta, the petitioner herein has beenserved with an impugned order under Section 281-B of the IncomeTax Act, which is under challenge in the present writ petition. 3. Though the petitioner has raised several grounds in thewrit petition, the learned counsel would submit that theaforesaid Mr.Parasmal Jain, during the pendency of the writpetition, had filed a Settlement Application before the IncomeTaxSettlementCommissioninSettlementApplicationNo.TN/CN51/2014-15/24-30/IT, wherein the very same incomeadmitted by Mr.Umed C.Mehta has been dealt with in thatproceedings and the application came to be disposed of. In viewof the orders passed by the Settlement Commission in the case ofParasmal Jain, the respondents cannot tax the petitioner hereinon the same transaction, which would result in double taxation.Hence, he would submit that the order of the SettlementCommission passed in the case of Umed C.Mehta requires to be re-visited. 4. Per contra, the learned Standing Counsel for therespondents submitted that the proceedings pertaining to UmedC.Mehta before the Settlement Commission are in the nature ofadmonition and discretionary proceedings and therefore thefindings that the income offered in one case, cannot beautomatically applied and deducted in other cases, even thoughthe transactions are one and the same and that the partiesapproaching the Commission should independently satisfy theCommission on all other criteria mandated under the provisionsof the Income Tax Act. Hence, the learned Standing Counsel wouldobject to the petitioner counsel's request for remand. 5. The order of the Settlement Commission, in the case ofParasmal Jain, was pursuant to the orders of the SettlementCommission in the case of Umed C.Mehta. It is not in disputethat the transactions pertaining to the undisclosed income ofUmed C.Mehta is also the subject matter of the SettlementApplication in the case of Parasmal Jain. If that being so, 5. The order of the Settlement Commission, in the case ofParasmal Jain, was pursuant to the orders of the SettlementCommission in the case of Umed C.Mehta. It is not in disputethat the transactions pertaining to the undisclosed income ofUmed C.Mehta is also the subject matter of the SettlementApplication in the case of Parasmal Jain. If that being so, https://hcservices.ecourts.gov.in/hcservices/ there is a possibility that such a subsequent consideration bythe Settlement Commission could be deemed as double taxation, incase the order dated 23.10.2009 passed by the SettlementCommission, in the case of Umed C.Mehta, is upheld. 6. It is also stated that the order passed in the case ofParasmal Jain by the Settlement Commission has become final.While that being so, if the objections of the learned StandingCounsel for the respondents is to be accepted, the possibilityof double taxation for one transaction may occur. As such, thisCourt is of the view that the issue in the case of Umed C.Mehtacould be reconsidered, in the light of the subsequentdevelopment through the orders passed by the SettlementCommission in the case of Parasmal Jain. Consequently, I deem itproper to refrain from addressing any other grounds raised bythe petitioner, challenging the impugned proceedings in thiswrit petition and that any further decision could await, afterfinal orders are passed by the Settlement Commission on remand. 7. It would be relevant to point out herein that when UmedC.Mehta had challenged the order of the Settlement Commissiondated 23.10.2009 passed in his Settlement Application No.TN/CN7/2009-10/2/IT, before this Court in W.P.No.23631 of 2009,this Court, by an order dated 09.08.2019, had set aside theorder of the 3[rd] respondent herein dated 23.10.2009 and remandedthe matter back for fresh consideration. 8. In view of the above, it would not be appropriate tointerfere with the present impugned order at this stage, but, itwould be appropriate to await the decision of the SettlementCommission, after remand, in the case of Umed C.Mehta. 9. Accordingly, the writ petition stands closed. No costs.Consequently, connected miscellaneous petition is closed. Assistant Registrar (CS-V) //True Copy// hvkTo 1. Assistant Commissioner of Income Tax, Company Circle, II (4), V Floor, New Block, Room No.514, 121, Nungambakkam High Road, Chennai - 600034. https://hcservices.ecourts.gov.in/hcservices/ 2. The Income Tax Officer (OSD), Company Circle-II(4) (i/c), Room No.514, New Block, 121, Nungambakkam High Road, Chennai - 600034. Company Circle-II(4) (i/c), Room No.514, New Block, 121, Nungambakkam High Road, Chennai - 600034. 3. Income Tax Settlement Commission, Additional Bench, Sathguru Complex, 640, Anna Salai, Chennai – 600035. Additional Bench, Sathguru Complex, 640, Anna Salai, Chennai – 600035. +1cc to Mr.V.S.Jayakumar, Advocate, S.R.No.68654 +1cc to Mr.J.Narayanaswamy, Advocate, S.R.No. 69439 W.P.No.27088 of 2009andM.P.No.1 of 2009GJ II(CO)GN(10/10/2019)