S.b. Civil Writ Petition v. Deputy Commissioner Of Income Tax, Central Circle-1, Incometax Department, Statue Circle, Jaipur

HIGH COURT OF JUDICATURE FOR RAJASTHAN BENCH AT JAIPUR S.B. Civil Writ Petition No. 8677/2014 Gupta Trademart Pvt Ltd, C-46, Opp. Laxminarayan Vihar, AjmerRoad, Madanganj Kishangarh, Distt.- Ajmer. Rajasthan throughits Director Sh. Rajendra Gupta S/o late Shri Babu Lal Gupta,Aged 49 years R/o Opp. Laxminarayan Vihar, Ajmer Road,Madanganj Kishangarh, Distt.- Ajmer. Rajasthan ----Petitioner Versus 1. Deputy Commissioner of Income Tax, Central Circle-1, IncomeTax Department, Statue Circle, Jaipur. 2. Commissioner of Income Tax, Central, Income TaxDepartment, Statue Circle, Jaipur.Department, Statue Circle, Jaipur. ----Respondents Connected With S.B. Civil Writ Petition No. 8699/2014 Rajendra Gupta S/o late Shri Babu Lal Gupta, Aged 49 years R/oOpp. Laxminarayan Temple, Ajmer Road, Madanganj-Kishangarh,Distt.- Ajmer. Rajasthan-305801 ----Petitioner Versus 1. Deputy Commissioner of Income Tax, Central Circle-1, Jaipur. 2. Commissioner of Income Tax, Central, Jaipur. ----Respondent For Petitioner(s) : Ms. Sakshi Srivastava, Adv. with Mr. Bhrigu Sharma, Adv.For Respondent(s): Mr. Anil Mehta, AAG withMr. Siddharth Bapna HON'BLE MR. JUSTICE SANJEEV PRAKASH SHARMA Judgment / Order Reserved on 06/08/2021Pronounced on 25/08/2021 1.Both these writ petitions have been preferred by thepetitioners assailing the order dated 19/12/2013 passed by theIncome Tax Settlement Commission while exercising the powersunder Section 245D(4) of the Income Tax Act, 1961 (for short, ITAct) as also the orders dated 18/06/2014 & 21/02/2014respectively passed under Section 245D(6B) of the IT Act. 2.The petitioner-company which is a private limited companyhas filed the first writ petition while Mr. Rajendra Gupta, who isManaging Director of the petitioner-company, has also filedseparately the second writ petition. 3.Both the petitioners by way of these writ petitions havechallenged the legality, validity and propriety of the order dated19/12/2013 passed by the Income Tax Settlement Commissionwhile exercising the powers under Section 245D(4) of the IT Actwhereby the settlement application filed by the petitioners wasdisposed of. 4.In order to appreciate the controversy raised in the presentwrit petitions, it would be apposite to quote the relevantprovisions relating to settlement of cases as provided underChapter XIX of the IT Act which are as under:- "245C. [(1) An assessee may, at any stage of a caserelating to him, make an application in such form andin such manner as may be prescribed, and containinga full and true disclosure of his income which has notbeen disclosed before the [Assessing Officer], themanner in which such income has been derived, theadditional amount of income-tax payable on suchincome and such other particulars as may beprescribed, to the Settlement Commission to havethe case settled and any such application shall bedisposed of in the manner hereinafter provided: [Provided that no such application shall be madeunless,— (i) in a case where proceedings for assessment orreassessment for any of the assessment yearsreferred to in clause (b) of sub-section (1) of section153A or clause (b) of sub-section (1) of section 153Bin case of a person referred to in section 153A orsection 153C have been initiated, the additionalamount of income-tax payable on the incomedisclosed in the application exceeds fifty lakh rupees,[(ia) in a case where— (A) the applicant is related to the person referred toin clause (i) who has filed an application (hereafter inthis sub-section referred to as ―specified person);and (B) the proceedings for assessment or re-assessment for any of the assessment years referred to in clause(b) of sub-section (1) of section 153A or clause (b) ofsub-section (1) of section 153B in case of theapplicant, being a person referred to in section 153Aor section 153C, have been initiated, (A) the applicant is related to the person referred toin clause (i) who has filed an application (hereafter inthis sub-section referred to as ―specified person);and (B) the proceedings for assessment or re-assessment for any of the assessment years referred to in clause(b) of sub-section (1) of section 153A or clause (b) ofsub-section (1) of section 153B in case of theapplicant, being a person referred to in section 153Aor section 153C, have been initiated, the additional amount of income-tax payable on theincome disclosed in the application exceeds ten lakhrupees,] (ii) in any other case, the additional amount ofincome-tax payable on the income disclosed in theapplication exceeds ten lakh rupees, and such tax and the interest thereon, which wouldhave been paid under the provisions of this Act hadthe income disclosed in the application been declaredin the return of income before the Assessing Officeron the date of application, has been paid on orbefore the date of making the application and theproof of such payment is attached with theapplication.] [Explanation.—For the purposes of clause (ia),— (a) the applicant, in relation to the specified personreferred to in clause (ia), means,— (i) where the specified person is an individual, anyrelative of the specified person; (ii) where the specified person is a company, firm,association of persons or Hindu undivided family, anydirector of the company, partner of the firm, ormember of the association or family, or any relativeof such director, partner or member; (iii) any individual who has a substantial interest inthe business or profession of the specified person, orany relative of such individual; (iv) a company, firm, association of persons or Hinduundivided family having a substantial interest in the business or profession of the specified person or anydirector, partner or member of such company, firm,association or family, or any relative of such director,partner or member; (v) a company, firm, association of persons or Hindu undivided family of which a director, partner ormember, as the case may be, has a substantialinterest in the business or profession of the specifiedperson; or any director, partner or member of suchcompany, firm, association or family or any relativeof such director, partner or member; (vi) any person who carries on a business or profession,— (A) where the specified person being an individual, orany relative of such specified person, has asubstantial interest in the business or profession ofthat person; or (B) where the specified person being a company, firm, association of persons or Hindu undividedfamily, or any director of such company, partner ofsuch firm or member of the association or family, orany relative of such director, partner or member, hasa substantial interest in the business or profession ofthat person; (b) a person shall be deemed to have a substantialinterest in a business or profession, if— (A) in a case where the business or profession iscarried on by a company, such person is, [on thedate of search], the beneficial owner of shares (notbeing shares entitled to a fixed rate of dividend,whether with or without a right to participate inprofits) carrying not less than twenty per cent of thevoting power; and (B) in any other case, such person is, [on the date ofsearch], beneficially entitled to not less than twentyper cent of the profits of such business orprofession.] (1A) For the purposes of sub-section (1) of thissection 2 [***], the additional amount of income-taxpayable in respect of the income disclosed in anapplication made under sub-section (1) of thissection shall be the amount calculated in accordancewith the provisions of sub-sections (1B) to (1D). [(1B) Where the income disclosed in the application relates to only one previous year,— (i) if the applicant has not furnished a return inrespect of the total income of that year, then, tax (B) in any other case, such person is, [on the date ofsearch], beneficially entitled to not less than twentyper cent of the profits of such business orprofession.] (1A) For the purposes of sub-section (1) of thissection 2 [***], the additional amount of income-taxpayable in respect of the income disclosed in anapplication made under sub-section (1) of thissection shall be the amount calculated in accordancewith the provisions of sub-sections (1B) to (1D). [(1B) Where the income disclosed in the application relates to only one previous year,— (i) if the applicant has not furnished a return inrespect of the total income of that year, then, tax shall be calculated on the income disclosed in theapplication as if such income were the total income; (ii) if the applicant has furnished a return in respectof the total income of that year, tax shall becalculated on the aggregate of the total incomereturned and the income disclosed in the applicationas if such aggregate were the total income.] [(1C) The additional amount of income-tax payablein respect of the income disclosed in the applicationrelating to the previous year referred to in sub-section (1B) shall be,— (a) in a case referred to in clause (i) of that sub-section, the amount of tax calculated under thatclause; (b) in a case referred to in clause (ii) of that sub-section, the amount of tax calculated under thatclause as reduced by the amount of tax calculated onthe total income returned for that year; (c) * * * * * (1D) Where the income disclosed in the applicationrelates to more than one previous year, theadditional amount of income-tax payable in respectof the income disclosed for each of the years shallfirst be calculated in accordance with the provisionsof sub-sections (1B) and (1C) and the aggregate ofthe amount so arrived at in respect of each of theyears for which the application has been made undersub-section (1) shall be the additional amount ofincome-tax payable in respect of the incomedisclosed in the application. (1E) * * * * * (2) Every application made under sub-section (1)shall be accompanied by such fees as may beprescribed. (3) An application made under sub-section (1) shallnot be allowed to be withdrawn by the applicant. [(4) An assessee shall, on the date on which hemakes an application under sub-section (1) to theSettlement Commission, also intimate the AssessingOfficer in the prescribed manner of having madesuch application to the said Commission.] [(5) No application shall be made under this section on or after the 1st day of February, 2021] Procedure on receipt of an application undersection 245C.— 245D. [(1) On receipt of an application undersection 245C, the Settlement Commission shall,within seven days from the date of receipt of the application, issue a notice to the applicant requiringhim to explain as to why the application made by himbe allowed to be proceeded with, and on hearing theapplicant, the Settlement Commission shall, within aperiod of fourteen days from the date of theapplication, by an order in writing, reject theapplication or allow the application to be proceededwith: Provided that where no order has been passedwithin the aforesaid period by the SettlementCommission, the application shall be deemed to havebeen allowed to be proceeded with.] (1A) [Omitted by the Finance (No. 2) Act 1991 (2) A copy of every order under sub-section (1) shall be sent to the applicant and to the [PrincipalCommissioner or Commissioner]. [(2A) Where an application was made under section application, issue a notice to the applicant requiringhim to explain as to why the application made by himbe allowed to be proceeded with, and on hearing theapplicant, the Settlement Commission shall, within aperiod of fourteen days from the date of theapplication, by an order in writing, reject theapplication or allow the application to be proceededwith: Provided that where no order has been passedwithin the aforesaid period by the SettlementCommission, the application shall be deemed to havebeen allowed to be proceeded with.] (1A) [Omitted by the Finance (No. 2) Act 1991 (2) A copy of every order under sub-section (1) shall be sent to the applicant and to the [PrincipalCommissioner or Commissioner]. [(2A) Where an application was made under section 245C before the 1st day of June, 2007, but an orderunder the provisions of sub-section (1) of thissection, as they stood immediately before theiramendment by the Finance Act, 2007, has not beenmade before the 1st day of June, 2007, suchapplication shall be deemed to have been allowed tobe proceeded with if the additional tax on the incomedisclosed in such application and the interest thereonis paid on or before the 31st day of July, 2007. Explanation.—In respect of the applications referredto in this sub-section, the 31st day of July, 2007shall be deemed to be the date of the order ofrejection or allowing the application to be proceededwith under sub-section (1). (2B) The Settlement Commission shall,— (i) in respect of an application which is allowed to beproceeded with under sub-section (1), within thirtydays from the date on which the application wasmade; or (ii) in respect of an application referred to in sub-section (2A) which is deemed to have been allowedto be proceeded with under that sub-section, on orbefore the 7th day of August, 2007, call for a report from the [Principal Commissioner orCommissioner], and the [Principal Commissioner orCommissioner] shall furnish the report within aperiod of thirty days of the receipt of communicationfrom the Settlement Commission. (2C) Where a report of the [Principal Commissioneror Commissioner] called for under sub-section (2B)has been furnished within the period specified therein, the Settlement Commission may, on thebasis of the report and within a period of fifteen daysof the receipt of the report, by an order in writing,declare the application in question as invalid, andshall send the copy of such order to the applicantand the [Principal Commissioner or Commissioner]: Provided that an application shall not be declaredinvalid unless an opportunity has been given to theapplicant of being heard: Provided furtherthat where the [PrincipalCommissioner or Commissioner] has not furnishedthe report within the aforesaid period, the SettlementCommission shall proceed further in the matterwithout the report of the [Principal Commissioner orCommissioner]. [Provided alsothat where in respect of anapplication, an order, which was required to bepassed under this sub-section on or before the 31stday of January, 2021, has not been passed on orbefore the 31st day of January, 2021, suchapplication shall deemed to be valid] Provided furtherthat where the [PrincipalCommissioner or Commissioner] has not furnishedthe report within the aforesaid period, the SettlementCommission shall proceed further in the matterwithout the report of the [Principal Commissioner orCommissioner]. [Provided alsothat where in respect of anapplication, an order, which was required to bepassed under this sub-section on or before the 31stday of January, 2021, has not been passed on orbefore the 31st day of January, 2021, suchapplication shall deemed to be valid] (2D) Where an application was made under sub-section (1) of section 245C before the 1st day ofJune, 2007 and an order under the provisions of sub-section (1) of this section, as they stood immediatelybefore their amendment by the Finance Act, 2007,allowing the application to have been proceededwith, has been passed before the 1st day of June,2007, but an order under the provisions of sub-section (4), as they stood immediately before theiramendment by the Finance Act, 2007, was notpassed before the 1st day of June, 2007, suchapplication shall not be allowed to be furtherproceeded with unless the additional tax on theincome disclosed in such application and the interestthereon, is, notwithstanding any extension of timealready granted by the Settlement Commission, paidon or before the 31st day of July, 2007.] [(3) The Settlement Commission, in respect of— (i) an application which has not been declared invalidunder sub-section (2C); or (ii) an application referred to in sub-section (2D)which has been allowed to be further proceeded withunder that sub-section, may call for the records from the [PrincipalCommissioner or Commissioner] and afterexamination of such records, if the SettlementCommission is of the opinion that any further enquiry or investigation in the matter is necessary, it maydirect the [Principal Commissioner or Commissioner]to make or cause to be made such further enquiry orinvestigation and furnish a report on the matterscovered by the application and any other matterrelating to the case, and the [Principal Commissioneror Commissioner] shall furnish the report within aperiod of ninety days of the receipt of communicationfrom the Settlement Commission: Provided that where the [Principal Commissioner orCommissioner] does not furnish the report within theaforesaid period, the Settlement Commission mayproceed to pass an order under sub-section (4)without such report. (4) After examination of the records and the reportof the [Principal Commissioner or Commissioner], ifany, received under— (i) sub-section (2B) or sub-section (3), or (ii) the provisions of sub-section (1) as they stoodimmediately before their amendment by the FinanceAct, 2007, and after giving an opportunity to theapplicant and to the [Principal Commissioner orCommissioner] to be heard, either in person orthrough a representative duly authorised in thisbehalf, and after examining such further evidence asmay be placed before it or obtained by it, theSettlement Commission may, in accordance with theprovisions of this Act, pass such order as it thinks fiton the matters covered by the application and anyother matter relating to the case not covered by theapplication, but referred to in the report of the[Principal Commissioner or Commissioner]. (4A) The Settlement Commission shall pass an orderunder sub-section (4),— (i) in respect of an application referred to in sub-section (2A) or sub-section (2D), on or before the31st day of March, 2008; (ii) in respect of an application made on or after the 1st day of June, 2007 [but before the 1st day ofJune, 2010], within twelve months from the end ofthe month in which the application was made;] [(iii) in respect of an application made on or after the1st day of June, 2010, within eighteen months fromthe end of the month in which the application wasmade.] (4A) The Settlement Commission shall pass an orderunder sub-section (4),— (i) in respect of an application referred to in sub-section (2A) or sub-section (2D), on or before the31st day of March, 2008; (ii) in respect of an application made on or after the 1st day of June, 2007 [but before the 1st day ofJune, 2010], within twelve months from the end ofthe month in which the application was made;] [(iii) in respect of an application made on or after the1st day of June, 2010, within eighteen months fromthe end of the month in which the application wasmade.] [(5) Subject to the provisions of section 245BA, thematerials brought on record before the SettlementCommission shall be considered by the Members of the concerned Bench before passing any order undersub-section (4) and, in relation to the passing of suchorder, the provisions of section 245BD shall apply.] (6) Every order passed under sub-section (4) shallprovide for the terms of settlement including anydemand by way of [tax, penalty or interest], themanner in which any sum due under the settlementshall be paid and all other matters to make thesettlement effective and shall also provide that thesettlement shall be void if it is subsequently found bythe Settlement Commission that it has been obtainedby fraud or misrepresentation of facts. [(6A) Where any tax payable in pursuance of anorder under sub-section (4) is not paid by theassessee within thirty-five days of the receipt of acopy of the order by him, then, whether or not theSettlement Commission has extended the time forpayment of such tax or has allowed payment thereofby instalments, the assessee shall be liable to paysimple interest at [one and one-fourth per cent. forevery month or part of a month] on the amountremaining unpaid from the date of expiry of theperiod of thirty-five days aforesaid.] [(6B) The Settlement Commission may, with a viewto rectifying any mistake apparent from the record,amend any order passed [***] under sub-section (4)— (a) at any time within a period of six months fromthe end of the month in which the order was passed;or (b) at any time within the period of six months fromthe end of the month in which an application forrectification has been made by the PrincipalCommissioner or the Commissioner or the applicant,as the case may be: Provided that no application for rectification shall bemade by the Principal Commissioner or theCommissioner or the applicant after the expiry of sixmonths from the end of the month in which an orderunder sub-section (4) is passed by the SettlementCommission: Provided further that an amendment which has theeffect of modifying the liability of the applicant shallnot be made under this sub-section unless theSettlement Commission has given notice to theapplicant and the Principal Commissioner orCommissioner of its intention to do so and has allowed the applicant and the Principal Commissioneror Commissioner an opportunity of being heard.] (7) Where a settlement becomes void as providedunder sub-section (6), the proceedings with respectto the matters covered by the settlement shall bedeemed to have been revived from the stage atwhich the application was allowed to be proceededwith by the Settlement Commission and the income-tax authority concerned, may, notwithstandinganything contained in any other provision of this Act,complete such proceedings at any time before theexpiry of two years from the end of the financial yearin which the settlement became void. allowed the applicant and the Principal Commissioneror Commissioner an opportunity of being heard.] (7) Where a settlement becomes void as providedunder sub-section (6), the proceedings with respectto the matters covered by the settlement shall bedeemed to have been revived from the stage atwhich the application was allowed to be proceededwith by the Settlement Commission and the income-tax authority concerned, may, notwithstandinganything contained in any other provision of this Act,complete such proceedings at any time before theexpiry of two years from the end of the financial yearin which the settlement became void. [(8) For the removal of doubts, it is hereby declaredthat nothing contained in section 153 shall apply toany order passed under sub-section (4) or to anyorder of assessment, reassessment or recomputationrequired to be made by the [Assessing Officer] inpursuance of any directions contained in such orderpassed by the Settlement Commission [and nothingcontained in the proviso to sub-section (1) of section186 shall apply to the cancellation of the registrationof a firm required to be made in pursuance of anysuch directions as aforesaid.]" 6.Brief facts of the case as noticed are that on 09/09/2010, thepetitioner and its director Rajendra Gupta (petitioner in CWPNo.8699/2014) were subjected to search and seizure underSection 132 of the IT Act and were served with consequentialnotices issued under Section 153A of the IT Act for initiatingassessment proceedings in case of search. The petitionerapproached the Settlement Commission and filed applicationunder Section 245C(1) of the IT Act in the prescribed formseeking settlement of their cases on 29/06/2012 for the period AY2007-08 to 2012-13 making true and full disclosure of income notdisclosed before the Assessing Officer alongwith the manner inwhich such income has been derived and additional amount ofIncome Tax payable thereon for the period specified therein. TheSettlement Commission upon being satisfied that the petitioner has fulfilled the condition precedent under Section 245A, 245Cand 245D(1) of the IT Act allowed the Settlement Application tobe proceeded with by passing order under Section 245D(1) of theIT Act. Further, as per Section 245D(2B) of the IT Act, therespondent No.2 furnished its report wherein objection as to thevalidity of the Settlement Application of the petitioner was madeon the ground of non-making of true and full disclosure of income.However, the Settlement Commission after considering the reportpassed an order under Section 245D(2C) of the IT Act declaringthe application to be valid and accordingly proceeded further withthe application. Subsequent to passing order under Section245D(2C) of the IT Act, the Settlement Application along withannexures were forwarded to the respondent no. 2 with thedirections to furnish its report within the prescribed period as perthe procedure prescribed in Rule-9 of the IT Settlement(Procedure) Rules, 1997 and Rule-9 report was submitted on16/11/2012 and rejoinder to the same was submitted by thepetitioner. 7.It was contended that in the report submitted by therespondent no.2 under Rule 9, it was stated that the disclosure ofthe additional income of Rs.30,98,140/- made by the petitionerbefore the Settlement Commission is incomplete, improper, untrueand not acceptable and it may at least be assessed atRs.40,88,71,231/-. The Settlement Commissioner accordingly videorder under Section 245D(3) of the IT Act issued on 07/11/2013instructed the respondent No.2 to get the examination done bythe Forensic Science Laboratory (hereinafter referred to as FSL) inrespect of certain documents seized from the premises of theDirector of the petitioner and Shri Rajesh Jain of Mayura Group. 7.It was contended that in the report submitted by therespondent no.2 under Rule 9, it was stated that the disclosure ofthe additional income of Rs.30,98,140/- made by the petitionerbefore the Settlement Commission is incomplete, improper, untrueand not acceptable and it may at least be assessed atRs.40,88,71,231/-. The Settlement Commissioner accordingly videorder under Section 245D(3) of the IT Act issued on 07/11/2013instructed the respondent No.2 to get the examination done bythe Forensic Science Laboratory (hereinafter referred to as FSL) inrespect of certain documents seized from the premises of theDirector of the petitioner and Shri Rajesh Jain of Mayura Group. The respondent No.2 vide its report dated 06/12/2013 submittedthat the report from FSL was unlikely to be received before thelimitation for passing order under Section 245D(4) in GTPL groupi.e. 31/12/2013. 8.It was further contended that the Settlement Commission bygoing beyond its jurisdiction and without appreciating that theSettlement and adjudication/assessment proceedings are twoalternative modes of dispute resolution and the scope and processof both are fundamentally different, passed the impugned orderdated 19/12/2013 under Section 245D(4) of the Act in a mannerthat the Settlement Applications were disposed of by theSettlement Commission by assuming role as of anAssessing/Adjudicating Officer instead of statutory role as aSettlement Commission. 9.It was further stated that from the findings of the SettlementCommission, it is prima facie evident that the Commissiondisbelieved the true and full disclosure and assumed the role ofAssessing Officer and made an addition which is 155 times of thedisclosed. It is further stated that the petitioner submitted anapplication for rectification under Section 164 and by way of anorder dated 18/06/2014 the Settlement Commission partlyaccepted the application under Section 245D(6B) of the IT Act. 10.It was further contended that the impugned order dated19/12/2013 passed by the learned Settlement Commission underSection 245D(4) of the IT Act is without jurisdiction and suffersfrom vice of non-application of mind, arbitrariness and theCommission exceeded its jurisdiction by proceeding as AssessingOfficer. The Commission completely lost sight of themaintainability criteria for the Settlement Application prescribed 10.It was further contended that the impugned order dated19/12/2013 passed by the learned Settlement Commission underSection 245D(4) of the IT Act is without jurisdiction and suffersfrom vice of non-application of mind, arbitrariness and theCommission exceeded its jurisdiction by proceeding as AssessingOfficer. The Commission completely lost sight of themaintainability criteria for the Settlement Application prescribed under Section 245C(1) of the IT Act wherein the full and truedisclosure of income by an assessee in the Settlement Applicationis the condition precedent/eligibility for a valid SettlementApplication. Thus, when the Settlement Commission is of the viewthat full and true disclosure of income has not been made then theSettlement Application itself becomes non-maintainable and thesame is the prerequisite for a valid Application under Section245C(1) of the IT Act. It is also submitted that the procedure ofsettlement is different from the Assessment.11.In support of his submissions, learned counsel for thepetitioners relied upon the judgments rendered in KakadiaBuilders (P) Ltd. Vs. CIT; (2019) 4 SCC 543; PrincipalCommissioner of Income Tax Vs. Rasi Seeds (P) Ltd.: 2021SCC OnLine Mad 1706; Commissioner of Income Tax Vs.Income Tax Settlement Commissioner: (2014) 365 ITR 68Ajmera Housing Corporation Vs. CIT: (2010)8 SCC 739;Commissioner of Income Tax Vs. Income Tax SettlementCommission: 2014 SCC OnLine Bom 4726; ACE InvestmentsLtd. Vs. Settlement Commission: 2003 SCC OnLine Mad1100; Canara Jewellers Vs. Settlement Commission: 2009SCC OnLine Mad 2905; Assistant Commissioner of IncomeTax Vs. Emta Coal Limited: 2017 SCC OnLine Cal 13188; CITVs. Express Newspapers Ltd.: (1994)2 SCC 374; P.L. TatwalVs. State of MP: (2014)11 SCC 431; CBI Vs. Ashok KumarAggarwal: (2014)14 SCC 295; Kan Singh Parihar Vs. Stateof Raj. & Ors. (SB Civil Writ Petition No.12983/2017),decided on 20/07/2021 by this Court; Brij Lal Vs. CIT:(2011) 1 SCC 1; Abdul Rahim Vs. Income Tax SettlementCommission & Ors. (WP No.14404/2018), decided by Madras High Court vide order dated 24/08/2018 andCommissioner of Income Tax Central-II Vs. Income TaxSettlement Commission & Ors.. 12.Per-contra, learned counsel for the Revenue supported theorder impugned and submitted that once the petitioners havesurrendered themselves before the Settlement Commission, theSettlement Commission has complete and full right to additionallylook into the other incomes which may not have been disclosed bythem and it can also proceed to assess itself the income of thepetitioners. The contention, therefore, of the petitioners has beenopposed with the submission that the Settlement Commission hasa jurisdiction much wider. 13.Learned counsel for the Revenue relies on the law laid downby the Supreme Court in Brij Lal & ors. Vs. Commissioner ofIncome Tax, Jalandhar: (2011)1 SCC 1 in support of hiscontentions. 14.Learned counsel for the Revenue has also filed writtensubmissions wherein it has been stated that the writ petitionsshould be dismissed also on account of suffering from delay,latches and acquiescence. It is stated that the writ petition hasbeen filed on 11/07/2014 against the final order which was passedon 19/12/2013. It is further stated that the petitioner has actedupon and deposited the installments as per the directions issuedby the learned Settlement Commission in the order impugned. Theamount was directed to be deposited by the learned SettlementCommission in 6 installments and the petitioners movedapplication praying to deposit the amount in 24 installmentsinstead. The learned Settlement Commission granted benefit andincreased the installments to 15 which was accepted by the petitioner-assessee and he acted upon accordingly. Thus, it is acase of acquiescence to the order passed by the learnedSettlement Commission and therefore, the petitioner is estoppedfrom challenging the said order before this Court after acceptingthe same without any demur. 15.Learned counsel for the Revenue also pointed out that by theimpugned order, the petitioner was granted immunity fromprosecution and penalty imposable under the Act as providedunder the provisions contained under Section 245H of the Act. Thepetitioner and its officers have been enjoying such protection andbenefit and therefore, are now estopped from challenging theorder impugned. The petitioner-assessee has been accorded thebenefit of not going through the regular assessment proceedingsin pursuance to Section 153-A of the Act. 16.Learned counsel for the Revenue also submitted that afinality is attained to the order passed by the learned SettlementCommission under Section 245D(4) of the Act. He supports thesubmissions in terms of Section 245I of the Act. It is furthersubmitted that the learned Settlement Commission order can beconsidered as void only if it is found that the order was obtainedby fraud or misrepresentation of facts. The terms used in Section245D(4) of the Act are much wider and even any otherinformation, which the learned Settlement Commission mayreceive, can be taken note of while passing the order. The learnedSettlement Commission has a power of assessment. He also reliedupon a judgment of the Supreme Court rendered in AjmeraHousing Corporation & Anr. Vs. Commissioner of IncomeTax: (2010) 8 SCC 739. 17.After hearing learned counsel for the parties, this Court hasgone through the material available on record as well as thejudgments cited at bar. 18.The powers of settlement commission were the subjectmatter of examination before two Constitutional Benches of theSupreme Court in Commissioner of Income Tax, Mumbai Vs.Anjum M.H. Ghaswala & Ors.: (2002) 1 SCC 633 and Brij Lal& ors. Vs. Commissioner of Income Tax, Jalandha (supra).However, the issue raised before this Court in the present writpetitions has not been examined by the Supreme Court on boththe aforesaid cases. In Commissioner of Income Tax, MumbaiVs. Anjum M.H. Ghaswala & Ors. (supra) the question, whicharose for consideration, was "Whether the Settlement Commissionconstituted under Section 245B of the Act has the jurisdiction toreduce or waive the interest chargeable under Section 234A, 234Band 234C of the Act while passing orders under Section 245D(4)of the Act". In Brij Lal & ors. Vs. Commissioner of IncomeTax, Jalandhar (supra), the questions re-framed by theConstitutional Bench were "Whether Section 234B of the Actapplies to the proceedings of Settlement Commission underChapter XIX-A of the Act?" and second if yes, "What is theterminal point for levy of such interest- whether such interestshould be computed up to the date of the order under Section245D(1) or up to the date of the order of the Commission underSection 245-D(4)?" and third "Whether the SettlementCommission could reopen its concluded proceedings by invokingSection 154 of the said Act so as to levy interest under Section234-B, though it was not so done in the original proceedings?"Thus, the judgments were essentially in relation to the interest for defaults in payments of advance tax and at what terminal pointthe levy of such interest can be imposed and what are the powersin granting the relief under the CBDT Circulars. The mootquestion, which has been essentially raised in the present writpetitions is "Whether the Settlement Commission can proceed andpass final orders on an application moved by an assessee afterfinding that the concerned assessee has not truly and fullydisclosed the income?" and secondly, "Whether it can proceed tomake assessment after adding the undisclosed income andthereafter pass orders by including such non-disclosure?." defaults in payments of advance tax and at what terminal pointthe levy of such interest can be imposed and what are the powersin granting the relief under the CBDT Circulars. The mootquestion, which has been essentially raised in the present writpetitions is "Whether the Settlement Commission can proceed andpass final orders on an application moved by an assessee afterfinding that the concerned assessee has not truly and fullydisclosed the income?" and secondly, "Whether it can proceed tomake assessment after adding the undisclosed income andthereafter pass orders by including such non-disclosure?." 19.The Madras High Court in Principal Commissioner of Income Tax Vs. Rasi Seeds (P) Ltd. & Anr. (supra), withoutadjudicating the issue, held that "it is not in dispute that forentertaining an application for settlement under Section 245-C ofthe Income Tax Act, the assessee must disclose true and fullincome enabling the Commission to settle the issues. If any non-disclosure is identified, during the course of the proceedings, thatitself is sufficient to reject the application in limine. TheCommission is not empowered to proceed further as in the eventof identifying non-disclosure of income, since the AssessingOfficer is the Authority to proceed with the reassessment. 20.InAjmera Housing Corporation & Anr. Vs.Commissioner of Income Tax (supra), the Supreme Court heldas under:- "27. It is clear that disclosure of "full and true"particulars of undisclosed income and "the manner" inwhich such income had been derived are the pre-requisites for a valid application under Section245C(1) of the Act. Additionally, the amount of incometax payable on such undisclosed income is to becomputed and mentioned in the application. It needsparticulars of undisclosed income and "the manner" inwhich such income had been derived are the pre-requisites for a valid application under Section245C(1) of the Act. Additionally, the amount of incometax payable on such undisclosed income is to becomputed and mentioned in the application. It needs little emphasis that Section 245C(1) of the Actmandates "full and true" disclosure of the particularsof undisclosed income and "the manner" in which suchincome was derived and, therefore, unless theSettlement Commission records its satisfaction on thisaspect, it will not have the jurisdiction to pass anyorder on the matter covered by the application. 29.Since Rules 6 and 8 of the 1987 Rules have somebearing on the issues involved, for the sake of readyreference, these are extracted below: 6.Commissioner's report etc., under Section245C(1).-- On receipt of a settlement application, acopy of the said application (other than the Annexureand the statements and other documentsaccompanying such Annexure) shall be forwarded bythe Commission to the Commissioner with thedirection to furnish his report under Sub-section (1) ofsection 245Dwithin thirty days of the receipt of thesaid copy of the application by him or within suchfurther period as the Commission may specify. 8. Commissioner's further report.--Where an order is passed by the Commission under Sub-section (1) ofsection 245Dallowing the settlement application to beproceeded with, copy of the Annexure to the saidapplication, together with a copy of each of thestatements and other documents accompanying suchannexure, shall be forwarded to the Commissioneralong with a copy of the said order with the directionthat the Commissioner shall furnish a further reportwithin ninety days of the receipt of the said Annexure(including the statements and other documentsaccompanying it or within such further period as theCommission may specify. 30.It will also be useful to extract the relevantportions of Form (No. 34B), prescribed for making anapplication under Section 245C(1) of the Act:[Form No. 34B] [See rules 44C and 44CA] is passed by the Commission under Sub-section (1) ofsection 245Dallowing the settlement application to beproceeded with, copy of the Annexure to the saidapplication, together with a copy of each of thestatements and other documents accompanying suchannexure, shall be forwarded to the Commissioneralong with a copy of the said order with the directionthat the Commissioner shall furnish a further reportwithin ninety days of the receipt of the said Annexure(including the statements and other documentsaccompanying it or within such further period as theCommission may specify. 30.It will also be useful to extract the relevantportions of Form (No. 34B), prescribed for making anapplication under Section 245C(1) of the Act:[Form No. 34B] [See rules 44C and 44CA] Form of application for settlement of cases undersection 245C(1) of the Income-tax Act, 1961 10. Particulars of the issues to be settled, nature andcircumstances of the case and complexities of theinvestigation involved [See Note 7] 11. Full and true disclosure of income which has notbeen disclosed before the Assessing Officer, themanner in which such income has been derived and the additional amount of income-tax payable on suchincome [See Notes 9 and 10] .... Signed (Applicant)Notes: .... 7. Full details of issues for which application forsettlement is made, the nature and circumstances ofthe case and complexities of the investigation involvedmust be indicated against item 10. Where theapplication relates to more than one assessment year,these details should be furnished for each assessmentyear. .... 9. The additional amount of income-tax payable on theincome referred to in item 11 should be calculated inthe manner laid down in Sub-sections (1A) to (1D) ofSection245C. 10. The details referred to in item 11 shall be givenin the Annexure to this application. (Emphasis supplied by us) 34.In our opinion even when the SettlementCommission decides to proceed with the application, itwill not be denuded of its power to examine as towhether in his application under Section 245C(1) ofthe Act, the assessee has made a full and truedisclosure of his undisclosed income. We feel that thereport(s) of the Commissioner and other documentscoming on record at different stages of theconsideration of the case, before or after theSettlement Commission has decided to proceed withthe application would be most germane todetermination of the said question. 35.It is plain from the language of Sub-section (4)of Section 245D of the Act that the jurisdiction of theSettlement Commission to pass such orders as it maythink fit is confined to the matters covered by theapplication and it can extend only to such matterswhich are referred to in the report of theCommissioner under Sub-section (1) or Sub-section(3) of the said Section. A "full and true" disclosure ofincome, which had not been previously disclosed bythe assessee, being a pre-condition for a validapplication under Section 245C(1) of the Act, thescheme of Chapter XIX-A does not contemplaterevision of the income so disclosed in the applicationagainst item No. 11 of the form. Moreover, if an 35.It is plain from the language of Sub-section (4)of Section 245D of the Act that the jurisdiction of theSettlement Commission to pass such orders as it maythink fit is confined to the matters covered by theapplication and it can extend only to such matterswhich are referred to in the report of theCommissioner under Sub-section (1) or Sub-section(3) of the said Section. A "full and true" disclosure ofincome, which had not been previously disclosed bythe assessee, being a pre-condition for a validapplication under Section 245C(1) of the Act, thescheme of Chapter XIX-A does not contemplaterevision of the income so disclosed in the applicationagainst item No. 11 of the form. Moreover, if an assessee is permitted to revise his disclosure, inessence, he would be making a fresh application inrelation to the same case by withdrawing the earlierapplication. In this regard, Section245C(3) of the Actwhich prohibits the withdrawal of an application oncemade under Sub-section (1) of the said Section isinstructive in as much as it manifests that an assesseecannot be permitted to resile from his stand at anystage during the proceedings. Therefore, by revisingthe application, the applicant would be achievingsomething indirectly what he cannot otherwise achievedirectly and in the process rendering the provision ofSub-section (3) of Section245C of the Act otiose andmeaningless. In our opinion, the scheme of saidChapter is clear and admits no ambigui