Allowing the petition the Court held that,  the Income-tax Department did not dispute the fact that the grant of refund was brought on record before the Settlement Commission only by supplementary report dated February 13, 2018, three days prior to the hearing of the application. The applicant submitted that he had claimed adjustment of the refund in respect of the additional tax liability arising in the application filed before the Commission and the sum was claimed inadvertently and stated that it was an unintentional one and that he may be pardoned. Considering the facts and circumstances of the case and more particularly, that the Department itself was not aware of the fact that the refund had been processed and granted on October 25, 2016, when it filed a report dated February 5, 2018 and it was brought on record only by way of a supplementary report dated February 13, 2018, it was inadvertently omitted by the assessee and the assessee having pleaded ignorance and inadvertence and sought for pardon, the Settlement Commission could not have treated the assessee’s case as one of making a false claim of refund. The Settlement Commission did not conduct an enquiry to satisfy itself that the stand taken by the Principal Commissioner by way of supplementary report could be a valid ground to come to a conclusion that the assessee had made a false claim on the refund due. The rejection of application was not justified. The order was set aside and the matter was remanded to the Settlement Commission for fresh consideration. ( AY. 2016-17)