Principal Commissioner Of Income Tax, Central v. Income Tax Settlement Commission

C/SCA/9883/2019 JUDGMENT IN THE HIGH COURT OF GUJARAT AT AHMEDABAD R/SPECIAL CIVIL APPLICATION NO. 9883 of 2019 FOR APPROVAL AND SIGNATURE: HONOURABLE MS.JUSTICE HARSHA DEVANI and HONOURABLE MS. JUSTICE SANGEETA K. VISHEN ==========================================================1 Whether Reporters of Local Papers may be allowed to Yessee the judgment ?2 To be referred to the Reporter or not ? Yes3 Whether their Lordships wish to see the fair copy of the No No 3 Whether their Lordships wish to see the fair copy of the No Nojudgment ?4 Whether this case involves a substantial question of law Noas to the interpretation of the Constitution of India or any order made thereunder ? ========================================================== PRINCIPAL COMMISSIONER OF INCOME TAX, CENTRAL Versus INCOME TAX SETTLEMENT COMMISSION ==========================================================Appearance: MR SANJAY JAIN, ADDITIONAL SOLICITOR GENERAL with MR PATHIK M ACHARYA, MR RAVI PRAKASH, MR AMAN MALIK and MR ADITYA AJAY (3520) for the Petitioner(s) No. 1 MR S GANESH, SENIOR ADVOCATE with MR B S SOPARKAR(6851) for the Respondent(s) No. 2,MR SN SOPARKAR, SENIOR ADVOCATE with MR B S SOPARKAR and MS JINAL SOLANKI for the Respondent(s) No. 3,4MR DEVANG VYAS(2794) for the Respondent(s) No. 1 ========================================================== CORAM: HONOURABLE MS.JUSTICE HARSHA DEVANI and HONOURABLE MS. JUSTICE SANGEETA K. VISHEN Date : 22/10/2019 ORAL JUDGMENT (PER : HONOURABLE MS.JUSTICE HARSHA DEVANI) 1.By this petition under articles 226 and 227 of the Constitution of India, the petitioner, namely, the Principal Commissioner of Income Tax, Central, Surat has challenged the order dated 30.1.2019 passed by the Income Tax Settlement Commission (the respondent No.1 herein) under section 245D(4) of the Income tax Act, 1961 (hereinafter referred to as “the IT Act”) to the extent it deals with undisclosed foreign income and assets of the respondents No.2, 3 and 4 (hereinafter referred to as “the contesting respondents”). 2.The facts, as averred in the petition, are that the respondents No.2, 3 and 4 Shri Vimal Patel, Shri Samir Patel and Shri Mehul Patel respectively, are promoters in the Banco Group of Companies. One of the main companies of the group M/s. Banco Products (India) Limited is a public limited company involved in the business of manufacturing of gaskets, radiators, charged air coolers and oil coolers extensively used in the automobile industry. As per the details submitted by them before the Settlement Commission, the contesting respondents were born in Kenya and are persons of Indian origin and that at present, they are residents of UAE though they have residences in UK and Africa and all of them hold British passports. In April, 2016 in the Panama Papers expose, a company by the name of Overseas Pearl Limited, British Virgin Island, registered in the British Virgin Islands and domiciled in Jersey, belonging to the contesting respondents, was mentioned. It is the case of the petitioner that the main issue in this case was the existence of ownership by Indian Tax Residents (respondents No.2, 3 and 4) in the shareholding of the company (i) M/s. Overseas Pearl Limited registered in the British Virgin Islands (ii) in another company by the same name in Liberia, and (iii) beneficial ownership of a trust named “Marias Trust” registered in Jersey and that as per the information, the contesting respondents are beneficial owners of the company M/s. Overseas Pearl Limited registered in Liberia as well as the British Virgin Islands. domiciled in Jersey, belonging to the contesting respondents, was mentioned. It is the case of the petitioner that the main issue in this case was the existence of ownership by Indian Tax Residents (respondents No.2, 3 and 4) in the shareholding of the company (i) M/s. Overseas Pearl Limited registered in the British Virgin Islands (ii) in another company by the same name in Liberia, and (iii) beneficial ownership of a trust named “Marias Trust” registered in Jersey and that as per the information, the contesting respondents are beneficial owners of the company M/s. Overseas Pearl Limited registered in Liberia as well as the British Virgin Islands. 2.1On 2.8.2016, a search and seizure operation came to be conducted by the Investigating Wing, Vadodara under section 132(1) of the IT Act at the residential premises and business premises of the Banco Group of Companies. The contesting respondents are the Directors in Banco Group of Companies. The main issue in this case was non-disclosure of foreign income and assets including foreign bank accounts in their returns by the contesting respondents for the period they were residents and were bound to disclose the same under section 139 of the IT Act and to include it in their total income. According to the petitioner, an appraisal report of the case was received by the Assessing Officer on 12.1.2017 and Foreign Tax and Tax Research Division (FT & TR) references were made by the Investigating Wing of the Income tax Department to several foreign jurisdictions to collect additional details regarding foreign assets/income of the contesting respondents. 2.2Notification S.O. 1791(E) dated 1.7.2015 came to be issued by the Central Government under the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015 (hereinafter referred to as “the Black Money Act”) in terms whereof, 30.9.2015 was specified as the date on or before which a person may make a declaration in respect of an undisclosed asset located outside India. However, the contesting respondents did not make any declaration of their undisclosed foreign income/assets in accordance with the provisions of the Black Money Act and the notification issued thereunder. 2.3During post search proceedings under section 131(1A) of the IT Act, the respondent No.2, by a letter dated 18.10.2016, disclosed Rs.100 crores for all the three contesting respondents and other entities in which they are directly and indirectly interested which was confirmed by the respondents No.2 and 3. Such disclosure related to bank accounts in Citibank N.A., Singapore, bank accounts in Habib Bank AG Zurich, Dubai and investment portfolio accounts in various foreign banks, details of which were found during the search proceedings. The disclosure of Rs.100 crores was made by the contesting respondents as their undisclosed income over and above their regular income. 2.4Thereafter, the matter was centralised with the Deputy Commissioner of Income-tax, Central Circle-3, Baroda and notices under section 153A of the IT Act were issued on 10.3.2017 in the group cases for assessment years 2011-12 to 2016-17. The limitation for passing the assessment order under section 153A of the IT Act was 31.12.2018. Notices under section 148 of the IT Act also came to be issued on 25.3.2017 to the contesting respondents for assessment years 2000-2001 to 2007-2008, on the basis of the information of undisclosed foreign assets and income, foreign bank accounts. 2.4Thereafter, the matter was centralised with the Deputy Commissioner of Income-tax, Central Circle-3, Baroda and notices under section 153A of the IT Act were issued on 10.3.2017 in the group cases for assessment years 2011-12 to 2016-17. The limitation for passing the assessment order under section 153A of the IT Act was 31.12.2018. Notices under section 148 of the IT Act also came to be issued on 25.3.2017 to the contesting respondents for assessment years 2000-2001 to 2007-2008, on the basis of the information of undisclosed foreign assets and income, foreign bank accounts. 2.5On 31.7.2017, the contesting respondents filed settlement applications under section 245C(1) of the IT Act before the Settlement Commission, Mumbai, for assessment years 2005-06 to 2013-14, assessment years 2004-05 to 2015-16 and assessments years 2004-05 to 2015-16, respectively. Before the Settlement Commission, the contesting respondents collectively offered aggregate additional income of Rs.129,09,82,999/- (which included Rs.125.35 crores on account of undisclosed foreign income and assets) in pursuance of the search under section 132 of the IT Act. Out of such amount, the contesting respondents offered total additional income of Rs.38,81,57,999/- in their return of income filed under section 153A as well as section 148 of the IT Act before the Assessing Officer during the pendency of the assessment proceedings, and Rs.90,28,25,000/- in their applications filed before the Settlement Commission. 2.6Vide order dated 14.8.2017 made under section 245D(1) of the IT Act, the applications made by the contesting respondents were admitted by the Settlement Commission and allowed to be proceeded with. Thereafter, vide order dated 28.9.2017 under section 245D(2C) of the IT Act, the Settlement Commission held that the applications made by the contesting respondents not to be “invalid”. Consequently, a report under rule 9 of the Income Tax Settlement Commission Procedure Rules, 1997 came to be submitted on 16.11.2017. Thereafter, several reports were furnished by the petitioner and the contesting respondents filed their responses thereto. 2.7 On 2.8.2018, notices under sub-section (1) of section 10 of the Black Money Act were issued to the contesting respondents for assessment years 2017-18 and 2018-19. In response thereto the contesting respondents filed their replies. During the pendency of the proceedings, vide letter dated 23.10.2018, the petitioner informed the Settlement Commission of the fact that the proceedings under the Black Money Act in these cases were pending. 2.8By a letter dated 6.12.2018, the Settlement Commission called for a verification report from the Department inter alia calling for information as to whether the Department wanted to continue the proceedings under the Black Money Act or the proceedings which were pending with the Settlement Commission in respect of the same income and the same assessees. By a letter dated 10.12.2018, the petitioner informed the Settlement Commission that as per the legal opinion of the senior standing counsel of the Income Tax Department the proceedings under section 10 of the Black Money Act can be initiated against the assessee; however, the income which is determined by the Settlement Commission is to be reduced from the income assessed under section 10 of the Black Money Act. The relevant part of the opinion was extracted in the said letter which reads as under: “Whether notice u/s 10 of the Act can be issued for those assessment years for which settlement proceedings are pending before the Settlement Commission? The proceedings before the Settlement Commission are under the provisions of the Income Tax Act. Thus, though notice under Section 10 can be issued for Assessment Years for which settlement proceedings are pending “Whether notice u/s 10 of the Act can be issued for those assessment years for which settlement proceedings are pending before the Settlement Commission? The proceedings before the Settlement Commission are under the provisions of the Income Tax Act. Thus, though notice under Section 10 can be issued for Assessment Years for which settlement proceedings are pending before the Settlement Commission, ultimately benefit will be required to be granted while computation under Section 5 of the Act.” It was accordingly stated that it would be more appropriate to continue with the assessment of the income under the provisions of section 147 of the IT Act for which the assessees have already admitted the income and that if there is an income which is not assessed under the said section, then the difference would be brought to tax under the Black Money Act as per the relevant provisions thereof and the legal opinion of the Senior Standing Counsel of the Department. 2.9Thereafter, the Settlement Commission proceeded further with the applications under section 245C of the IT Act and by the impugned order dated 30.1.2019 made under sub-section (4) of section 245D thereof, computed the total income of the contesting respondents for the concerned assessment years and directed them to pay taxes including interest payable as per the order in four quarterly installments beginning March 2019 and ending in December, 2019 and further held that interest under section 245D(6A) will be chargeable as per the IT Act. The Settlement Commission granted further reliefs in terms of the impugned order. Being aggrieved, the petitioner has filed the present petition. 3.Mr. Sanjay Jain, learned Additional Solicitor General emphatically argued that the impugned order passed by the Settlement Commission is without jurisdiction, inasmuch as, the Settlement Commission had no jurisdiction to pass an order under the Income Tax Act in relation to undisclosed foreign income and assets which are covered under the Black Money Act. It was submitted that the Settlement Commission failed to appreciate that the Black Money Act has been enacted to make provisions to deal with the problem of black money, that is, undisclosed foreign income and assets, the procedure for dealing with such income and assets and to provide for imposition of tax on any undisclosed foreign income and assets held outside India. In this regard, the attention of the court was invited to the preamble of the Black Money Act. 3.1It was submitted that the Black Money Act is a special and later Act dealing with undisclosed foreign income and assets, while the Income Tax Act is a general law to consolidate and amend the law relating to income tax and as such the Black Money Act being a special legislation would prevail over the Income Tax Act for the purpose of assessment of undisclosed foreign income and assets after the coming into operation of the Black Money Act. 3.2The attention of the court was invited to the provisions of section 4 of the Black Money Act which provide for the ‘Scope of total undisclosed foreign income and asset’ and more particularly to sub-section (3) thereof which provides that the income included in the total undisclosed foreign income and asset under that Act shall not form part of the total income under the Income Tax Act. It was submitted that in view of the provisions of sub-section (3) of section 4 of the Black Money Act, it is clear that any undisclosed foreign income and asset which is assessable under the Black Money Act does not form part of income under the Income Tax Act and as such, the Income Tax Act is not applicable to those undisclosed foreign 3.2The attention of the court was invited to the provisions of section 4 of the Black Money Act which provide for the ‘Scope of total undisclosed foreign income and asset’ and more particularly to sub-section (3) thereof which provides that the income included in the total undisclosed foreign income and asset under that Act shall not form part of the total income under the Income Tax Act. It was submitted that in view of the provisions of sub-section (3) of section 4 of the Black Money Act, it is clear that any undisclosed foreign income and asset which is assessable under the Black Money Act does not form part of income under the Income Tax Act and as such, the Income Tax Act is not applicable to those undisclosed foreign income and asset. It was submitted that the legislature clearly wanted to exclude foreign income from the purview of the Income Tax Act. It was contended that therefore, the Settlement Commission had no jurisdiction to entertain and decide the applications made by the contesting respondents under section 245C of the IT Act. 3.3Reference was made to sections 10, 59 and 72 of the Black Money Act, to submit that these sections form a complete regime for assessment under the Black Money Act. It was contended that insofar as domestic income and assets are concerned, it is the income tax authorities who have the jurisdiction; however, in case of undisclosed foreign income or assets, it is the authorities appointed under the Black Money Act who have the jurisdiction. 3.4The learned Additional Solicitor General next submitted that the contesting respondents neither disclosed their foreign income/assets in their income tax returns nor did they make any declaration of the same in terms of section 59 of the Black Money Act. Referring to the provisions of section 59 of the Black Money Act, it was submitted that the same provides that any person may make, on or after the date of commencement of the Black Money Act but on or after the date to be notified by the Central Government in the Official Gazette, a declaration in respect of any undisclosed asset located outside India and acquired from income chargeable to tax under the Income-tax Act for any assessment year prior to the assessment year beginning on 1[st] day of April, 2016 for which he has failed to furnish a return under section 139 of the Income-tax Act, which he has failed to disclose in a return of income furnished by him under the Income-tax Act before the date of commencement of that Act, or which has escaped assessment by reason of the omission or failure on the part of such person to make a return under the Income-tax Act or to disclose fully and truly all material facts necessary for the assessment or otherwise. It was submitted that, therefore, section 59 of the Black Money Act provides that any person may make a declaration in respect of undisclosed foreign income and asset. Thus, every person whether resident or not ordinarily resident in India was provided with an opportunity to make a declaration of undisclosed foreign income and asset. It was pointed out that vide notification S.O. 1791(E) dated 1.7.2015 issued by the Central Government under section 59 of the Black Money Act, 30.9.2015 was notified as the date on or before which a person may make a declaration in respect of an undisclosed asset located outside India and 31.12.2015 was notified as the date on or before which a person shall pay the tax and penalty in respect of the undisclosed asset located outside India so declared under section 59 of the Black Money Act. 3.5Reference was made to section 72(c) of the Black Money Act which provides that where any asset has been acquired or made prior to commencement of the Black Money Act, and no declaration in respect of such asset is made under that Chapter (that is, Chapter VI), such asset shall be deemed to have been acquired or made in the year in which a notice under section 10 is issued by the Assessing Officer and the provisions of the Black Money Act shall apply accordingly. It was submitted that the applicability of these provisions in the case of the contesting respondents is further strengthened by the circular of the Department bearing Circular No.13 of 2015 dated 6.7.2015 in answer to FAQ No.23 and Circular No.15 of 2015 dated 3.9.2015 and in answer to FAQ No.26, which read as under: “Question No.23: A person is a non-resident. However, he was a resident of India earlier and had acquired foreign assets out of income chargeable to tax in India which was not declared in the return of income or no return was filed in respect of that income. Can that person file a declaration under Chapter VI of the Act? Answer: Section 59 provides that a declaration may be made by any person of an undisclosed foreign asset acquired from income chargeable to tax under the Income-tax Act for any assessment year prior to assessment year 2016-17. Since the person was a resident in the year in which he had acquired foreign assets (which were undisclosed) out of income chargeable to tax in India, he is eligible to file a declaration under section 59 in respect of those assets under Chapter VI of the Act.” “Question 26: As per answer to question no.23 of Circular No.13 dated 06.07.2015, a person being a non-resident can file a declaration under Chapter VI of the Act in respect of asset acquired out of income chargeable to tax earned when he was resident in India in the past. However, para 3 of the Explanatory Circular No.12 dated 02.07.2015 states that a declaration may be filed by a person, being a resident in India. Are these positions contradictory? Answer: Para 3 of the Explanatory Circular No.12 dated 02.07.2015 provides that a resident may file a declaration under Chapter VI of the Act. It does not say that a non-resident who was earlier resident in India cannot file a declaration in respect of asset acquired out of income chargeable to tax in India earned when he was a resident. Answer to question no.23 of Circular No.13 dated 06.07.2015 says that a person may make a declaration under section 59 of the Act in respect of an undisclosed foreign asset acquired by him in the year in which he was resident in India. Thus, a specific situation has been dealt in answer to question no.23 of Circular No.13 dated 06.07.2015 which answers the query clearly.” Answer: Para 3 of the Explanatory Circular No.12 dated 02.07.2015 provides that a resident may file a declaration under Chapter VI of the Act. It does not say that a non-resident who was earlier resident in India cannot file a declaration in respect of asset acquired out of income chargeable to tax in India earned when he was a resident. Answer to question no.23 of Circular No.13 dated 06.07.2015 says that a person may make a declaration under section 59 of the Act in respect of an undisclosed foreign asset acquired by him in the year in which he was resident in India. Thus, a specific situation has been dealt in answer to question no.23 of Circular No.13 dated 06.07.2015 which answers the query clearly.” 3.6It was submitted that in view of the provisions of section 59 of the Black Money Act, if in any past year the contesting respondents were required to make a declaration in respect of any undisclosed asset located outside India, which they had failed to disclose earlier under the Income Tax Act, they are assessees in default. It was pointed out that section 72(c) of the Black Money Act provides that where an asset has been acquired or made prior to the commencement of that Act, and no declaration in respect of such asset has been made under that Chapter, such asset shall be deemed to have been acquired in the year in which a notice under section 10 is issued by the Assessing Officer and the provisions of the Black Money Act would apply accordingly. It was submitted that section 72(c) relates to assets which are acquired even prior to the assessment year commencing on or after the 1[st] day of April, 2016. It was submitted that by not making a declaration as required under section 59 of the Black Money Act within the window provided for making such declaration, the contesting respondents would be deemed to be assessees in default and the undisclosed asset will be deemed to have been acquired in the year in which the Assessing Officer issued notices to them under section 10 of the Black Money Act. 3.7It was submitted that therefore, even in terms of sub-section (2) of section 2 of the Black Money Act prior to its amendment vide Finance No.2 Act of 2019, the contesting respondents would fall within the ambit of the expression assessee as defined therein. Reference was made to the 3.7It was submitted that therefore, even in terms of sub-section (2) of section 2 of the Black Money Act prior to its amendment vide Finance No.2 Act of 2019, the contesting respondents would fall within the ambit of the expression assessee as defined therein. Reference was made to the definition of “assessee” under sub-section (2) of section 2 of the Black Money Act which defines assessee to mean a person, being a resident other than not ordinarily resident in India within the meaning of clause (6) of section 6 of the Income Tax Act, by whom tax in respect of undisclosed foreign income and assets, or any other sum of money, is payable under that Act and includes every person who is deemed to be an assessee in default under the Black Money Act. It was submitted that a person who is deemed to be an assessee in default is covered by the expression “assessee” and, therefore, for the reason that they have not made any declaration of their foreign income and assets in terms of the Black Money Act, even in terms of the unamended section 2(2), the contesting respondents are assessees in default in terms of section 2(2) read with section 59 and section 72(c) of the Black Money Act and as such, the provisions of the Black Money Act are applicable to them for the period under consideration. Reliance was placed upon an unreported decision of the Supreme Court in the case of Union of India v. Gautam Khaitan rendered on 15.10.2019 in Criminal Appeal No.1593 of 2013. wherein it has been held that where no declaration in respect of the asset covered under the Black Money Act is made, such asset would be deemed to have been acquired or made in the year in which a notice under section 10 is issued by the Assessing Officer and the provisions of the Act shall apply accordingly. It was submitted that thus, non-declaration of assets under section 59 of the Black Money Act constitutes a default and the contesting respondents would be deemed to be assessees in default, even though the words “assessee in default” is not used in sections 59 and 72(c) of the Black Money Act. According to the learned counsel, the Settlement Commission should have conducted itself in accordance with law and should have left the undisclosed foreign income to proceedings under the Black Money Act. It was submitted that when this new enactment has paved window for separate set of officers to apply mind, and when it has been brought to its notice that proceedings under the Black Money Act have been initiated, the Settlement Commission should have confined its order to the undisclosed domestic income. 3.8 It was submitted that in view of the provisions of sub-section (3) of section 4 of the Black Money Act, undisclosed foreign income will not form part of the total income under the Income Tax Act. It was contended that the legislature wanted to exclude undisclosed foreign income from the purview of the Income Tax Act. According to the learned counsel, section 4 of the Black Money Act is the governing section, whereas section 5 thereof only deals with computation and speaks of assessments concluded under the Income Tax Act. It was argued that therefore, in view of the provisions of sections 4, 5 and 59 of the Black Money Act, the Black Money Act and the IT Act remain mutually exclusive and there is no overlapping. It was also submitted that though sub-section (3) of section 4 of the Black Money Act does not contain a non obstante clause, having regard to the object of the Act, the court may read a non obstante clause in it. Referring to the statement of objects and reasons as well as the preamble of the Black Money Act, it was submitted that having regard to object behind the enactment, this court in judicial review may consider non providing of an overriding provision to be an omission on the part of the legislature and read such a provision therein. 3.9It was further submitted that notices under sub-section (1) of section 10 of the Black Money Act were issued to the contesting respondents on 2.8.2018 for assessment years 2017-18 and 2018-19 during the pendency of proceedings before the Settlement Commission. It was submitted that the initial information relating to undisclosed foreign income/assets of the contesting respondents came to the notice of the Assessing Officer on 12.1.2017 (the date on which appraisal report was received by the Assessing Officer), relevant to assessment year 2017-18 and in case of disclosure before the Settlement Commission on 22.8.2017, which is the date when the applications and copies of statement of facts of the contesting respondents was received by the Assessing Officer. 3.10It was further submitted that the proviso to sub-section (1) of section 3 of the Black Money Act provides that an undisclosed asset located outside India shall be charged to tax on its value in the previous year in which such asset comes to the notice of the Assessing Officer and, therefore, in the present case the contesting respondents are liable to be dealt with under the Black Money Act. It was submitted that the Black Money Act was in operation at the time when the settlement application dated 31.7.2017 was filed before the Settlement Commission making a disclosure of undisclosed foreign income and asset and, therefore, the Settlement Commission could not have proceeded with the settlement proceedings under the IT Act to the extent they related to undisclosed foreign income and assets. It was argued that the contesting respondents never disclosed any foreign income or asset in their returns of income though they were tax residents in India till assessment year 2013-14 in the case of Shri Vimal Patel, and till assessment year 2015-16 in the case of Shri Mehul K. Patel and Shri Samir Patel. 3.11Referring to the provisions of section 3 of the Black Money Act, it was submitted that this is the charging section and the base of the charge is on every assessee in respect of assessment years commencing or after the 1[st] day of April, 2016. It was submitted that the proviso to sub-section (1) of section 3 of the Black Money Act prescribes that even the undisclosed assets located outside India pertaining to a period prior to commencement of this Act shall be charged to tax on its value in the previous year when it comes to the notice of Assessing Officer. 3.12Reference was made to the provisions of sub-section (1) of section 10 of the Black Money Act, to submit that in view thereof, the Assessing Officer may, on receipt of an information from an income-tax authority under the Income-tax Act or any other authority under any law for the time being in force or on coming of any information to his notice, serve on any person, a notice requiring him on a date to be specified, to produce or cause to be produced such accounts or documents or evidence as the Assessing Officer may require for the purposes of that Act and may, from time to time, serve further notices requiring the production of such other accounts or documents or evidence as he may require. It was submitted that, accordingly, notices for assessment year 2017-18 and for assessment year 2018-19 were issued under section 10 of Black Money Act in accordance with the provisions of section 10, that is, the year when the information pertaining to undisclosed foreign income and assets came to the notice of the Assessing Officer. the Assessing Officer. 3.13Reference was made to sub-section (12) of section 2 of the Black Money Act which defines “Undisclosed foreign income and asset” to submit that the definition nowhere mentions the years to which the undisclosed foreign income and asset pertains. It was submitted that sub-section (12) of section 2 read with sub-section (1) of section 10 shows that unlike the Income Tax Act, the Black Money Act does not limit the years for which proceedings under that Act could be initiated and that what is assessable under Black Money Act is undisclosed foreign asset when it comes to the notice of the Assessing Officer, and the value of such assets would be charged to tax as per the proviso to section 3 of the Black Money Act. 3.14Next, it was submitted that the definition of ‘assessee’ under sub-section (2) of section 2 of Black Money Act has been amended by the Finance Bill No.2 2019, to bring within its ambit non-residents. It was pointed out that sub-section (2) of section 2 has been amended with retrospective effect from 1[st] July, 2017, to submit that the contesting respondents would, therefore, fall within the ambit of “assessee” with effect from 1[st] July, 2015. It was submitted that since the contesting respondents clearly fall within the ambit of the definition of “assessee’ as defined under sub-section (2) of section 2 of the Black Money Act, the undisclosed foreign income and asset of the contesting respondents are governed by the provisions of the Black Money Act and the Settlement Commission had no jurisdiction to pass any order under section 245D (4) of the IT Act in respect of such income and asset. 3.15It was further submitted that Black Money Act is a special Act dealing with the undisclosed foreign income and assets while the Income Tax Act is a general law to consolidate and amend the law relating to Income Tax and as such the Black Money Act being a special legislation prevails over the Income Tax Act for the purposes of assessment of undisclosed foreign income and assets after coming into operation of the Black Money Act. In support of such submission, reliance was placed upon the decision of the Supreme Court in Commercial Tax Officer, Rajasthanv. BinaniCements Limited and Another, (2014) 8 SCC 319, wherein it has been held thus:- “34. It is well established that when a general law and a special law dealing with some aspect dealt with by the general law are in question, the rule adopted and applied is one of harmonious construction whereby the general law, to the extent dealt with by the special law, is impliedly repealed. This principle finds its origins in the Latin maxim of generalia specialibus non derogant i.e. general law yields to special law should they operate in the same field on same subject (Vepa P. Sarathi, Interpretation of Statutes, 5th Edn., Eastern Book Company; N.S. Bindra’s Interpretation of Statutes, 8th Edn., The Law Book Company; Craies on Statute Law, S.G.G. Edkar, 7th Edn., Sweet & Maxwell; Justice G.P. Singh, Principles of Statutory Interpretation, 13th Edn., Lexis Nexis; Craies on Legislation, Daniel Greenberg, 9th Edn., Thomson Sweet & Maxwell, Maxwell on Interpretation of Statutes, 12th Edn., Lexis Nexis).” 3.16It was submitted that the contesting respondents had claimed that what they have disclosed before the 3.16It was submitted that the contesting respondents had claimed that what they have disclosed before the Settlement Commission is income for assessment years 2005-06 to 2013-14 for Shri Vimal Patel and for assessment years 2004-05 to 2015-16 in case of Samir Patel and Mehul Patel, and not assets. It was pointed out that under the Black Money Act, undisclosed foreign income can be taxed only for assessment year 2016-17 for which the relevant previous year is 2015-16. This is so because section 3 of the Black Money Act clearly mentions the same. However, due to the effect of proviso to section 3, the undisclosed foreign asset can be taxed for any previous year and shall be charged to tax on its value in the previous year in which such asset comes to the notice of the Assessing Officer. It was submitted that in this regard, it is necessary to understand the subject matter of the income offered by the contesting respondents. It was pointed out that the contesting respondents have offered their global income, that is, income earned and accrued outside India along with income arising in India for assessment years when the contesting respondents were resident in India. Therefore, the income earned during those years was chargeable to tax In India. Referring to the items of income offered to tax as mentioned in the applications made by the contesting respondents under section 245C of the IT Act, it was pointed out that the same include the following:- “a. Items of Income credited to various foreign bank accounts of the Applicant in the form of income from Investments in shares, debentures, bonds, time deposits and units of mutual funds / investment instruments (Securities):accounts of the Applicant in the form of income from Investments in shares, debentures, bonds, time deposits and units of mutual funds / investment instruments (Securities): 1.Dividends received on Securities 2.Income distribution on the Units3.Interest on bonds, debentures and time deposits2.Income distribution on the Units3.Interest on bonds, debentures and time deposits 4.Gains on purchase and sale of Securities b.Distribution of Income from Discretionary Trust set up outside India where the Applicant is one of the beneficiaries c.Credits in the foreign bank accounts of the Applicant jointly with other brothers primarily representing the income earned by the group entities. The source and manner of earning said income is explained hereafter. d.Income in the form of rental and gains from immovable property in which investment was made out of the funds in these accounts. e.Income attributable to assets transferred to Frangipani Trust by the applicant and included as income of the applicant. f.Income on account of unexplained investment in purchase of land. g.Miscellaneous credits in the bank accounts maintained outside India for which information about source is not available due to lapse of time.” 3.17It was submitted that on a perusal of the above, it could be seen that out of income accrued/arisen to the contesting respondents in the years in which they were resident in India, they have acquired assets like shares, bonds, debentures, mutual funds, other investments, bank account balances are which all assets of the contesting respondents. According to the learned counsel for the petitioner, the income arising at a particular time and credited in the account of a person is income but the bank account as such and the balance in that account at any point of time, constitutes the asset of the person. It was submitted that section 59 of the Black Money Act also refers to undisclosed asset located outside India and acquired from income chargeable to tax under the Income-tax Act for any assessment year prior to assessment year 2016-17. In this case, the contesting respondents had acquired shares/debentures/bonds/ mutual funds, etc. as admitted by them before the Settlement Commission in the years in which they were residents. Therefore, the claim made by the contesting respondents that they have offered only income before the Settlement Commission and not any asset does not hold good because what is taxable under Income-tax Act, 1961 is the income. 3.18It was submitted that section 5 of the Income Tax Act defines ‘Scope of total Income’ and specifies that ‘total income’ of any person who is resident in any previous year includes all income from whatever source received/deemed to have been received in India, accrues or arises/deemed to accrues or arise in India or accrues or arises to him outside India during such year. It was submitted that the scheme of the Income Tax Act is required to be understood with reference to section 69A thereof, which by deeming fiction taxes assets as income. It was submitted that section 69B of the Income tax Act also provides such deeming fiction and treats the amount of investment not fully disclosed in books of accounts as income and, therefore, even the assets which were not part of the books of account and offered to tax can be charged only as income under the Income Tax Act. 3.19Next, it was submitted that while it is true that before the Settlement Commission, the petitioner had stated that they desire to proceed further in the proceedings before the Settlement Commission, the principle of estoppel does not apply against a statute and consent cannot confer jurisdiction upon an authority which does not have such jurisdiction. It was submitted that despite there being no objection raised by the Department for continuance of the proceedings before the Settlement Commission in ignorance of the mandate of the Black Money Act, it was the duty of the Settlement Commission not to proceed with the settlement proceedings to the extent they related to undisclosed foreign income and assets. Reliance was placed upon the decision of the Supreme Court in the case of Maharshi Dayanand University vs. Surjeet Kaur, (2010) 11 SCC 159, for the proposition that there can be no estoppel/promissory estoppel against the legislature in the exercise of the legislative function nor can the Government or public authority be debarred from enforcing a statutory prohibition. Promissory estoppel being an equitable doctrine, must yield when the equity so requires. 3.20Reliance was also placed upon the decision of the Supreme Court in the case of Collector v. Cine Exhibitors (P) Ltd., (2012) 4 SCC 441, for the proposition that it is settled in law that the doctrine of promissory estoppel is founded on the principles of equity and to avoid injustice. The said principle cannot be soundly embedded or treated to be sacrosanct when a public authority carries out a representation or a promise which is prohibited by law or is devoid of the authority of law. 3.21It was further submitted that it is well settled law that consent cannot confer jurisdiction upon an authority which does not have such jurisdiction. In support of such submission, reliance was placed upon the decision of the Supreme Court in the case of JagmittarSainBhagat v. Health Services, 3.21It was further submitted that it is well settled law that consent cannot confer jurisdiction upon an authority which does not have such jurisdiction. In support of such submission, reliance was placed upon the decision of the Supreme Court in the case of JagmittarSainBhagat v. Health Services, Haryana,(2013) 10 SCC 136, wherein it has been held that it is a settled legal proposition that conferment of jurisdiction is a legislative function and it can neither be conferred with the consent of the parties nor by a superior court, and if the court passes a decree having no jurisdiction over the matter, it would amount to nullity as the matter goes to the root of the cause. Such an issue can be raised at any stage of the proceedings. The finding of a court or tribunal becomes irrelevant and unenforceable/inexecutable once the forum is found to have no jurisdiction. Similarly, if a court/tribunal inherently lacks jurisdiction, acquiescence of party equally should not be permitted to perpetrate and perpetuate defeating the legislative animation. The court cannot derive jurisdiction apart from the statute. In such eventuality the doctrine of waiver also does not apply. 3.22It was, accordingly, urged that merely because before the Settlement Commission, the Department had consented to proceed further with the settlement proceedings, it would not vest in the Settlement Commission the jurisdiction to entertain and decide the application under section 245C of the Income tax Act in respect of the undisclosed foreign income and asset. 3.23The learned Additional Solicitor General further submitted that apart from the fact that the impugned order passed by the Settlement Commission is unsustainable on the ground of lack of jurisdiction, another aspect which goes to the root of the matter is that the contesting respondents had not made full and true disclosure of their foreign income and assets in the applications made under section 245C of the Black Money Act. It was submitted that it is well settled that in the scheme of Chapter XIX-A of the Income Tax Act, there is no stipulation for revision of an application under section 245C (1) and the natural corollary is that determination of income by the Settlement Commission has necessarily to be with reference to the income disclosed in the application filed under said section in the prescribed form. It was submitted that it is also well settled that the Settlement Commission is not meant to be an optional forum chosen at the option of the assessee for the settlement of the tax liability of the assessee as also his liability for further proceedings or prosecution under the Income Tax Act or other Acts, even while the assessee continues to be dishonest and deliberately fails to make a true and full disclosure of the extent of the income which he h