Pr. Commissioner Of Income Tax (Central), Pune v. Income Tax Settlement Commission & Ors

IN THE HIGH COURT OF JUDICATURE AT BOMBAYCIVIL APPELLATE JURISDICTION WRIT PETITION NO. 1788 OF 2018 Pr. Commissioner of Income Tax (Central), Pune..Petitioner Versus Income Tax Settlement Commission & Ors. ..Respondents ................... Mr. Charanjeet Chanderpal a/w Ms. Pragya Chandra for thePetitioner Mr. Charanjeet Chanderpal a/w Ms. Pragya Chandra for thePetitioner Mr. J.D. Mistri, Sr. Counsel a/w Mr. Madhur Agrawal i/by AtulJasani for the RespondentsMr. J.D. Mistri, Sr. Counsel a/w Mr. Madhur Agrawal i/by AtulJasani for the Respondents ................... CORAM : AKIL KURESHI & SARANG V. KOTWAL, JJ. DATE : APRIL 4, 2019. ORAL JUDGMENT(Per Akil Kureshi, J.) 1.This petition is filed by the Income Tax Department to challenge an order dated 30.5.2017 passed by the IncomeTax Settlement Commission ("Settlement Commission" forshort) under Section 245D(4) of the Income Tax Act, 1961("the Act" for short). 2.Brief facts are as under:- 2.1Respondent Nos. 2 to 4 assessees are PrivateLimited Companies engaged in the business of real estate development as a part of which, they had undertakendevelopment of township with all amenities and facilities forthe residents. The assessees applied to the SettlementCommission on 18.3.2016 to settle their cases forassessment years 2008-09 to 2015-16. The SettlementCommission passed an order dated 29.3.2016 under Section245D(1) of the Act. Relevant portion of which reads asunder:- 5.3 In view of the foregoing decisions of the High Courts includingthe jurisdictional High Court, we are of the considered view that theclaim of having made the true and full disclosure of additionalincomes and the manner of earning such incomes by the applicantsstands fulfilled in the present group of cases, in the background offulfillment of other technical parameters like payment of tax above thethreshold limit, giving of intimation to A.O., payment of filing fees andpayment of tax and interest and pendency of assessmentproceedings for the years under consideration. 6.Accordingly, we do not find any infirmity in the presentapplication in terms of the provisions of Section 245C(1) of the Act.Accordingly, we hold that the application is maintainable and allowthe same to be proceeded with further. 2.2 The settlement applications of the assessees thereafter proceeded before the Settlement Commission. The Department opposed the applications for settlementinter alia on the ground of non disclosure of additional income and lack of true and full disclosures. The SettlementCommission thereupon passed an order dated 10.5.2016under Section 245D(2C) of the Act. Relevant portion of theorder reads thus:- 6.Accordingly, we do not find any infirmity in the presentapplication in terms of the provisions of Section 245C(1) of the Act.Accordingly, we hold that the application is maintainable and allowthe same to be proceeded with further. 2.2 The settlement applications of the assessees thereafter proceeded before the Settlement Commission. The Department opposed the applications for settlementinter alia on the ground of non disclosure of additional income and lack of true and full disclosures. The SettlementCommission thereupon passed an order dated 10.5.2016under Section 245D(2C) of the Act. Relevant portion of theorder reads thus:- "9.4Various arguments have been advanced on behalf of theDepartment in order to show that the applicant concerns have notmade a clean breast of their affairs with reference to the full and truedisclosure of their respective incomes and the manner of earningsuch incomes before the Commission. The alleged dishonestconduct on part of the applicants engaged in acquisition of lands forMega City Project at Panvel and at Penn, respectively, have beenhighlighted with instances of exaggeration of expenditure towardscompensation for relinquishment of tenancy rights, service chargespaid to sister concerns, and brokerage and commission, legal,consultancy and other development work, without furnishinginformation regarding the names and identities of the recipientparties, farmers etc. As regards the expenses incurred towardsservice charges paid by Ms. Valuable Properties Pvt. Ltd. to thesister concerns viz. Ms. Valuable Infrastructure Pvt. Ltd. and M/s.Valuable Technologies Pvt. Ltd. it has been the allegation by theDepartment that the expenditures in the hands of M/s. ValuableProperties Pvt Ltd. are not commensurate with the services claimedto have been received, and the expenditures set off against suchreceipts in the hands of M/s. Valuable Infrastructure Pvt Ltd. and M/s.Valuable Technologies Pvt. Ltd. are highly exaggerated, and, in someinstances, made towards expenditures the nature of which are notrelatable to the business activities of the latter two concerns. TheLd. AR on behalf of the three applicants has valiantly tried to makeout a defensible case against such allegations by stating thatnotwithstanding the fact that a sum of Rs.101 Crores has beendebited as bogus compensation expenditure in the hands of M/s. Valuable Resources Pvt. Ltd. and a few parties may have deniedhaving tenancy rights in respect of the lands for whichcompensations were allegedly been paid, all the three applicantshave made full and true disclosure of their respective incomes andhave also satisfactorily explained the manner of earning such incomeAlthough there appear to be a few suspicious features in respect ofthe activities and conduct of all the three applicants in thebackground of the admission of bogus compensation payment madeto M/s. Arion Commercial Pvt Ltd. Kolkata, yet there is no clinchingevidence against the applicants, warranting and treating theirapplications invalid at this stage. Whatever objections have beenraised on behalf of the Department could be examined further indetail later when the matter is carried forward to the next stage. 9.5 It is pertinent at this juncture to refer to certain judicialpronouncements including that of the jurisdictional Bombay HighCourt on the issue of acceptability and advancement of anapplication to the next stage. The Hon'ble Bombay High Court inCIT vs Settlement Commission in 375 ITR 483 held that, "We are notconcerned in this case with the merits of the disclosures. We find thatonce the majority holds that the conditions regarding the thresholdlimit for the quantum of tax for additional income, payment of tax andinterest thereupon and pendency of proceedings all are fulfilled thenthe application was not liable to be rejected on any technical ground."In recent judgment dated 8.12.2015 in Principal CIT (Central) Vs.Settlement Commission (2016) Tax Corp. (DT) 05293 (Gujarat) ,the Hon'ble High Court held that the question of fulfillment of allmaterial requirements of a valid application for settlement wouldbe still open for the Commission to examine in further enquiryunder section (3) of S. 245D before passing of final order undersection (4) of S 245D. The Hon'ble Court made a reference to ajudgment of the Hon'ble Delhi High Court - CIT vs Income TaxSettlement Commission (2013) 35 Taxman Com 56 (Delhi) where itwas held that "from the Tove provisions, it is apparent that the settlement application passes through several stages before the finalorder providing for the terms of settlement is passed by theSettlement Commission. The first stage is is u/s. 245D(1). This isfollowed by the next step u/s. 245D(2C) and finally by the orderpassed u/s. 245D(4). In this present case, the final order u/s.245D(4) is yet to be passed. The orders u/s. 245D(1) and 245D(2C)are not final orders and they are subject to the final orders that maybe passed under section 245D(4). 10.In conclusion, we feel that the applicants havesuccessfully rebutted the various averments made on behalf ofthe Department, and also disclosed the manner of earning theincome hitherto undeclared to the Department. Hence, we areof the considered view that in the absence of any evidencewhich could prove fatal to the respective application of theapplicants and render the applications as not being full and trueat this juncture, we do not invalidate such applications at thisstage, and as such, allow them to be taken to furtherproceedings u/s. 245D(4)." 2.3 The Settlement Commission passed its impugnedorder dated 30.5.2017 under Section 245D(4) of the Act andaccepted the assessees' offer of settlement inter aliaobserving that having regard to the disclosure of the furtheradditional income during the proceedings, the SettlementCommission was satisfied about true and full disclosures. Itwas observed that the disclosure of additional income of Rs.18 Crores during the proceedings would not detract from thenature of true and full disclosure made previously. The computation of income was made by the SettlementCommission. Subject to payment of such computed tax withinterest, the assessees would get immunity from penalty andprosecution. In such order of assessment, the SettlementCommission had taken into account and dealt with atconsiderable length the objections of the Department againstaccepting the settlement applications of the assessees. Inthe context of lack of true and full disclosure, theCommission observed as under:- computation of income was made by the SettlementCommission. Subject to payment of such computed tax withinterest, the assessees would get immunity from penalty andprosecution. In such order of assessment, the SettlementCommission had taken into account and dealt with atconsiderable length the objections of the Department againstaccepting the settlement applications of the assessees. Inthe context of lack of true and full disclosure, theCommission observed as under:- "14.2 The thrust of the Department's contention emanate from itsview that the three applicants, particularly VPPL and VRIL, have notmade a clean breast of their affairs in terms of the fullness andtrueness of their respective incomes inasmuch as regarding thebusiness activity of aggregation of different parcels of land forlaunching Mega City projects at Panvel and at Pen, they have tried toweave a complex story of payments to various intermediariesincluding corporate entities by cheques, receiving back the chequeamounts in cash and then making further payments by cash tolandlords, brokers, middle level aggregators, and also persons whoclaimed false tenancy rights over certain lands, without adducing anycogent evidences in support of such claims. It is the contention of theDepartment that a major amount of expenditures shown undervarious heads like purchase of land from various land owners,service charges paid to two companies of the Valuable group,payment for compensation of relinquishment of rights and brokerageand land development charges, have been excessively inflated andmajor portion of such expenditures have been siphoned off for thebenefit of promoters and management personnel and other corporate companies of the Valuable group and, thus, the incomesshown/declared in their respective settlement applications have beengrossly understated. 14.3 On a conspectus of the whole range of issues in the light ofthe objections raised, and the infirmities pointed out by theDepartment, we are of the view that notwithstanding the possibility ofexistence of certain infirmities in the claims of the applicants ofhaving incurred various categories of expenditures of high amountstowards aggregation of lands for the purpose of launching Mega Cityprojects, it needs to be recognized that aggregation of land on theoutskirts of a megapolis like Mumbai involves a very uphill andformidable effort and drainage of substantial resources, withoutwhich such objective is extremely difficult to achieve, more so, in thepolitico-economic-social contexts, where there are innumerablehurdles one has to surmount. The applicants have been able toconvince us that multiple players have stepped into the process ofland aggregation including brokers, petty politicians, wheel dealersand other local musclemen, who have demanded their respectivepounds of flesh in order to facilitate the applicants to acquire ahomogeneous and single large patch of land possible. Of course, theapplicants have not been able to lead full evidences in support ofexpenditures under various heads, and also their modus operandi ofpayment to intermediaries in cheques and receipt back of cash fromthem though appear to be a dishonest practice, yet having regard tothe demand of the various stakeholders for cash, payments, suchpractice can be said to be a prudent one for achieving the objects ofthe business of aggregation of lands by the applicant. There mayhave been some leakage of revenue/income by way of inflatedclaims, yet the Department's plea that the extent of land claimedhave been purchased by the applicants cannot be true, is notmaintainable, having regard to the furnishing of certain number ofsale deed/purchase documents in digital format to the assessingofficer [ by way of sample copies ], and the subsequent furnishing of affidavits declaring therein that the applicants are in possession ofthe relevant purchase documents relating to the entire patch of landpurchased for aggregation and development. ......... 14.6Taking a macro view of the nature of the businessactivities and the complex issues involved, and having regard to thedisclosure of further additional incomes during the proceedings u/s.245D(4), we are of the considered view that the applicants have beenable to satisfy us about the fullness and trueness of their respectiveincomes, and have also explained the manner of earning the same.However, this disclosure of additional income of Rs. 18 Crores duringthe present proceedings will not detract from the true and full natureof the income already disclosed in their respective SOFs, and alsowould not dilute the manner of earning the same. Hence, we herebysettle the cases of the applicants, accordingly." 3.This order of Settlement Commission, it appears that,the Department has challenged mainly on the ground thatthe Settlement Commission did not pass an order underSection 245D(3) of the Act though repeatedly requested bythe Department. The grounds of challenge contained in thepetition revolves around this issue. Under this ground, theDepartment contends that the Settlement Commission oughtto have ordered a further enquiry into the transactions of theassessees which were admittedly bogus. The SettlementCommission committed an error in granting immunityagainst penalty and prosecution without full enquiry. TheSettlement Commission failed to pass a speaking order at 245D(3) stage. This deprived the Department an opportunityto submit its report on various issues covered under thesettlement applications. It is contended that in Rule 9report, it was mentioned that certain transactions of theassessees needed to be verified since in the assessmentproceedings, proper details were not furnished. 4.On the basis of such material on record, learnedcounsel Mr. Chanderpal for the Department vehementlycontended that the Settlement Commission has committedserious error by passing order under Section 245D(4) withoutformally disposing of the Department's request for an orderunder Section 245D(3). Even otherwise, looking to thecomplexity of the facts and material on record, furtherenquiry was necessary. By not permitting such furtherenquiry, the Settlement Commission deprived theDepartment of an opportunity to rebut the assessees'assertions of true and full disclosures of the undisclosedincome. 5.Learned counsel Mr. Mistri for the assessees opposed the petition contending that the enquiry or investigationunder sub-section (3) of Section 245D is at the discretion ofthe Settlement Commission. The Commissioner of IncomeTax cannot apply for such order or insist that the SettlementCommission must call for such further enquiry orinvestigation. The Department was granted fullestopportunity to produce the material before the SettlementCommission to oppose the settlement applications of theassessees. The Commissioner had filed report under Rule 9of the Income Tax Settlement Commission Rules. Even aftercrossing the stage of Section 245D(2C), the Commissionerhad produced additional reply with accompanyingdocuments which were duly examined by the SettlementCommission before passing order under Section 245D(4) ofthe Act. Learned counsel relied on the decision of theDivision Bench of this Court in case of CIT Vs. Income TaxSettlement Commission & Anr.[1] to contend that it is notobligatory on the part of the Settlement Commission to callfor further investigation / enquiry as referred to in sub-section (3) of Section 245D of the Act. He further submittedthat the Settlement Commission has minutely examined the 1[2014] 360 ITR 539 (Bom) 1[2014] 360 ITR 539 (Bom) material produced by both sides before coming to theconclusion that the assessees had made true and fulldisclosure. The findings of the Settlement Commission arenot even challenged in the petition. In any case, thejurisdiction of this Court to interfere with an order of theSettlement Commission passed on merits is extremelylimited. He, therefore, submitted that the petition bedismissed. 6.In order to resolve the controversy, we may peruse thestatutory provisions contained in Chapter XIX-A of the Act,which pertains to settlement of cases. As is well known, anassessee desirous of having his case settled may, under sub-section (1) to Section 245C, apply for the same withnecessary information and details prescribed therein. Theprocedure to be followed once such application is filed, isprescribed under Section 245D of the Act; relevant portion ofwhich reads as under:- "245D.(1) On receipt of an application under section 245C, theSettlement Commission shall, within seven days from the date ofreceipt of the application, issue a notice to the applicant requiring himto explain as to why the application made by him be allowed to beproceeded with, and on hearing the applicant, the Settlement Commission shall, within a period of fourteen days from the date ofthe application, by an order in writing, reject the application or allowthe application to be proceeded with: Provided that where no order has been passed within the aforesaidperiod by the Settlement Commission, the application shall bedeemed to have been allowed to be proceeded with. (2) A copy of every order under sub-section (1) shall be sent to theapplicant and to the [Principal Commissioner or] Commissioner. (2C) Where a report of the [Principal Commissioner or]Commissioner called for under sub-section (2B) has been furnishedwithin the period specified therein, the Settlement Commission may,on the basis of the report and within a period of fifteen days of thereceipt of the report, by an order in writing, declare the application inquestion as invalid, and shall send the copy of such order to theapplicant and the [Principal Commissioner or] Commissioner: Provided that an application shall not be declared invalid unless anopportunity has been given to the applicant of being heard: Provided further that where the [Principal Commissioner or]Commissioner has not furnished the report within the aforesaidperiod, the Settlement Commission shall proceed further in thematter without the report of the [Principal Commissioner or]Commissioner. ........ (3) The Settlement Commission, in respect of— (i) an application which has not been declared invalid under sub-section (2C); orsection (2C); or (ii) an application referred to in sub-section (2D) which has beenallowed to be further proceeded with under that sub-section,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 theSettlement Commission is of the opinion that any further enquiry orinvestigation in the matter is necessary, it may direct the [PrincipalCommissioner or] Commissioner to make or cause to be made suchfurther enquiry or investigation and furnish a report on the matterscovered by the application and any other matter relating to the case,and the [Principal Commissioner or] Commissioner shall furnish thereport within a period of ninety days of the receipt of communicationfrom the Settlement Commission: Provided that where the [Principal Commissioner or] Commissionerdoes not furnish the report within the aforesaid period, the SettlementCommission may proceed to pass an order under sub-section (4)without such report. (4) After examination of the records and the report of the PrincipalCommissioner or Commissioner, if any, received under— (i) sub-section (2B) or sub-section (3), or Provided that where the [Principal Commissioner or] Commissionerdoes not furnish the report within the aforesaid period, the SettlementCommission may proceed to pass an order under sub-section (4)without such report. (4) After examination of the records and the report of the PrincipalCommissioner or Commissioner, if any, received under— (i) sub-section (2B) or sub-section (3), or (ii) the provisions of sub-section (1) as they stood immediatelybefore their amendment by the Finance Act, 2007,before their amendment by the Finance Act, 2007, and after giving an opportunity to the applicant and to the [PrincipalCommissioner or] Commissioner to be heard, either in person orthrough a representative duly authorised in this behalf, and afterexamining such further evidence as may be placed before it orobtained by it, the Settlement Commission may, in accordance withthe provisions of this Act, pass such order as it thinks fit on thematters covered by the application and any other matter relating tothe case not covered by the application, but referred to in the reportof the [Principal Commissioner or] Commissioner. From these provisions, one can broadly notice theprocedure where once an application for settlement is filedby an assessee under Section 245C(1), in terms of Section245D(1) of the Act, the Settlement Commission within sevendays of receipt of such application, issue notice to theapplicant requiring him to explain why the application shouldbe allowed to be proceeded with. After hearing theapplicant, the Settlement Commission may, within 14 days ofthe date of the application, pass an order in writing rejectingthe application or allowing the application to proceed further.As per the proviso, if no such order is passed within the timeprescribed, the application shall be deemed to have beenallowed to proceed with. 7.Once this stage is crossed, the Settlement Commissionwould be required to pass an order under Section 245D(2C).As per said provision, if a report has been received from theCommissioner, the Settlement Commission may within 15days of the receipt of the report pass an order in writingdeclaring the application as invalid. In absence of any reportfrom the Commissioner, the Settlement Commission would proceed without such a report. 8.As per Section 245D(3), in respect of an applicationwhich has not been declared invalid under sub-section (2C),the Settlement Commission may call for records from theCommissioner and after examination of the records, if theCommission is of the opinion that any further enquiry /investigation is necessary, it may direct the Commissionerto make or to cause such enquiry or investigation andproduce the report within the prescribed time. Proviso toSection 245D(3) provides that if the report of theCommissioner is not received within the time prescribed, theSettlement Commission may proceed to pass order undersub-section (4) without such report. 9.After passing through all these stages, the most crucialstage is where the Settlement Commission passes the finalorder under Section 245D(4) of the Act. As per ths provision,the Settlement Commission would pass the order afterexamination of the records and the report of theCommissioner if received under sub-section (2B) or sub- section (3). Such order would be passed after givingopportunity of hearing to the applicant as also to theCommissioner and after examining such further evidence asmay be placed before it or obtained by it. 9.After passing through all these stages, the most crucialstage is where the Settlement Commission passes the finalorder under Section 245D(4) of the Act. As per ths provision,the Settlement Commission would pass the order afterexamination of the records and the report of theCommissioner if received under sub-section (2B) or sub- section (3). Such order would be passed after givingopportunity of hearing to the applicant as also to theCommissioner and after examining such further evidence asmay be placed before it or obtained by it. 10. The above noted provisions would, therefore, make itclear that under sub-section (3) of Section 245D of the Act, itis a discretion of the Settlement Commission after calling forand examination of records, to require the Commissioner tomake further enquiry / investigation if the SettlementCommission is of the opinion that any further enquiry orinvestigation in the matter is necessary. First thing,therefore, that can be discerned is that if the SettlementCommission does not intend to exercise such discretion, it isnot necessary for the Settlement Commission to pass aformal order under sub-section (3). The order may benecessary if the Settlement Commission desires to havefurther enquiry or investigation to be carried out by theCommissioner. The insistence of the Department, therefore,for the Settlement Commission to pass a formal order beforeproceeding further to the stage of Section 245D(4) of the Act was not a valid one. This, however, would not mean that theDepartment has no stakes in the matter. As a party to thesettlement application, it has a right to oppose theapplication for settlement made by an assessee. It would bewithin the Department to urge the Settlement Commission,in a given set of circumstances, to exercise the discretionreferred to in sub-section (3) and any exercise of discretionby a quasi-judicial body like the Settlement Commission mustbe on rational basis and for valid reasons. In a give case,therefore, if the Department was able to demonstrate thatthe Settlement Commission failed to exercise the discretionthough the facts of the case so required, it would be open forthe Department to contest such a decision of the SettlementCommission, having failed to persuade the SettlementCommission to exercise such discretion. To that limitedextent, we do not think that the Department had no locusstandi to urge the Settlement Commission to examine thefacts and exercise the powers under sub-section (3) ofSection 245D or to question the decision of the SettlementCommission whether expressed by speaking order orotherwise, before the Court. We may recall, as per the provisions of the settlement of cases, once an application forsettlement is filed and it is allowed to proceed further, thepending assessment stands suspended. SettlementCommission assumes the powers of the Assessing Authority.The powers of the Departmental Authorities to carry outfurther enquiry or investigation would be severely restricted. 11. The decision of this Court in the case of CIT Vs. ITSC(supra) did touch upon the nature of the powers enjoyed bythe Settlement Commission under Section 245D(3) of theAct. In this context, the Court observed that it is evidentboth from the language of sub-section (3) and the terms ofsub-section (4) that the Settlement Commission is notrequired to in every case to cause an enquiry or investigationto be made under sub-section (3). It was further observedthat under sub-section (4), the Settlement Commissionbesides considering the report, if any, of the Commissionerunder sub-section (2B) or sub-section (3) is empowered toexamine such further evidence as may be placed before it orobtained by it. Such evidence would include the evidencewhich may be produced either by the assessee or by the Commissioner. In the said case, however, the Departmenthad approached the Court where the Settlement Commissionwas yet to apply its mind whether an enquiry under Section245D(3) should be ordered. In that view of the matter, theCourt was not inclined to entertain the proceedings at thatstage. It was, however clarified that during the course of itsproceedings, the Settlement Commission would specificallybring to bear its consideration on whether an enquiry underSection 245D(3) should be ordered having regard to thecircumstances of the case. 12. Coming back to the facts of the case, we may recall,the Department had not filed any application before theSettlement Commission setting out grounds and reasonswhy in facts of the case, such enquiry or investigation asenvisaged under Section 245D(3) of the Act was necessary.The Settlement Commission had scrutinized the settlementapplication at two stages, while passing the order underSection 245D(1) and thereafter under Section 245D(2C) ofthe Act. The first enquiry, of course, would be summary innature, considering the time constraint, as well as absence of participation by the Department. The second stage enquiryunder Section 245D(2C) would be more incisive. In both theorders, the Settlement Commission had been prima faciesatisfied about the correctness of the disclosure made by theassessees. In both such orders, the Settlement Commissionhad deferred its final opinion on such issue at the time ofpassing the final order. We have reproduced the relevantportion of the final order. The Settlement Commission hasdiscussed the rival contentions at considerable length,adverted to the material on record and come to theconclusion that there was no failure of full and truedisclosure. These findings are not under challenge before us.In any case, as per the settled law, the jurisdiction of theCourt in examining the correctness of the SettlementCommission's orders in exercise of Writ Jurisdiction isextremely narrow and would be confined to the scrutinywhether the order of the Settlement Commission is inaccordance with the provisions of the Act. In fact, in suchorder, the Settlement Commission had also given reasonswhy further enquiry on investigation was not necessary. 13. We may recall even in absence of any enquiry orinvestigation in terms of sub-section (3) of Section 245D, theState Commission while passing the order under Section245D(4), would look into any further evidence which may bebrought on record. As observed by this Court in CIT vs. ITSC(supra), such further evidence may as well be produced bythe Commissioner. In the present case, it is undisputed thatthe Commissioner did produce additional material. It wasalso looked into by the Settlement Commission. 14. In view of such facts and particularly considering thatthe Department had neither laid a foundation before theSettlement Commission establishing why further enquiry orinvestigation ought to have been called, nor led any suchgrounds before us to demonstrate how the SettlementCommission committed an error in refusing to exercise thediscretion, we do not find that the Department had made outa case for interference. 15. Before closing, we may notice a relevant facts. Itappears that the Department's representative had orally 14. In view of such facts and particularly considering thatthe Department had neither laid a foundation before theSettlement Commission establishing why further enquiry orinvestigation ought to have been called, nor led any suchgrounds before us to demonstrate how the SettlementCommission committed an error in refusing to exercise thediscretion, we do not find that the Department had made outa case for interference. 15. Before closing, we may notice a relevant facts. Itappears that the Department's representative had orally persisted with the Settlement Commission to pass an orderunder Section 245D(3) of the Act calling upon further enquiryor investigation by the Commissioner which would enable theDepartment to verify and establish that the disclosures madeby the assessees were not true and full. Since theSettlement Commission did not do so, the Department hadearlier filed Writ Petition No. 6347 of 2017. In this petition,the Department had prayed that the Settlement Commissionbe directed to give opportunity to the petitioner to verify thetransactions referred to in objections of the Departmentcontained in the reports under Rules 9 and 9A of the IncomeTax Settlement Commission Rules. Essentially, therefore, insuch petition, also the Department's case was that theSettlement Commission should have called for or permittedfurther enquiry or investigation by the Commissioner on thepoints raised in the reports. It appears that this petition wasfiled after Settlement Commission passed its final orderunder Section 245D(4) of the Act. The Department,however, was not aware about the development and seemsto have proceeded on the basis that settlement proceedingswere still pending. Whatever be the bonafide impression of the Department, this petition came to be withdrawn withoutany further rider. It is not clear whether the petition waswithdrawn after arguments or it was withdrawn because theDepartment came to know about the dismissal of thesettlement proceedings and desired to file a fresh petition inview of such material change. In any case, we have notproceeded on the basis of the Department's earlier petitionbeing withdrawn without permission to file a fresh one. 16. In the result, the petition is dismissed. [ SARANG V. KOTWAL, J. ] [ AKIL KURESHI, J ]