The assessee filed settlement application under section 245C before the Income-tax Settlement Commission (ITSC) disclosing additional income. Application was rejected for non-payment of taxes on the additional income disclosed in the settlement application. Subsequently the assesseee filed on more application which was accepted by the Settlement commission. Department has filed writ petition against the order of the settlement commission. Dismissing the petition the Court held that here is no bar for filing of a second application before the ITSC, when the earlier application was ‘not allowed’ to be proceeded with under section 245D(1). Section 245K(2) prohibits a subsequent application, only when the assessee had earlier made an application under section 245C and such an application has been ‘allowed’ to be proceeded with under section 245D(1). In contrast, there is no provision under the Income-tax Act, debarring the assessee from subsequently making an application after his original application was ‘rejected’ under section 245D(1) and ‘not allowed’ to be proceeded with. The fundamental requirement of the application under section 245C(1) is that the full and true disclosure of the income has to be made, along with the manner in which such income was derived. What requires to be taken into account by the ITSC is as to whether the assessee had explained the manner in which the additional income which was not disclosed before the Assessing Officer, has been disclosed in the application or not and whether, such a disclosure is a full and fair disclosure. This would basically be a factual aspect.  Court held that there is neither in violation of any statutory provisions of the Income-tax Act nor is there any defect in the decision making process.  Accordingly the writ petition was dismissed (AY. 2007-08 to 2011-12)