P. Suman (Smt.) v. CIT (2021) 205 DTR 385 / 322 CTR 655 / 130 taxmann.com 249/( 2022) 440 ITR 214 (Mad.)(HC)

S. 245D : Settlement Commission-Procedure-Application-Directed to file additional income-Entitle to immunity from penalty and prosecution. [S. 153CA, 245C, 245D(4), Art. 226]

The petition is in the business of jewellery and diamonds. On directions of ITSC, Commissioner submitted a verification report based on which assessee was directed to offer additional income by way of further disclosure.  ITSC passed order under section 245D(4) and granted assessee immunity from penalty and prosecution.  Revenue filed the writ petition and contended that since assessee disclosed additional income during pendency of settlement proceedings and full and true disclosure was not made by assessee at first instance, order passed by ITSC was to be set aside.  Single judge allowed the petition of the revenue and set aside the order of Settlement Commission.  On appeal the division Bench held that  the additional income was offered with view to bring quietus to matter and in spirit of settlement and further disclosure pursuant to verification report submitted before ITSC which was a further report under section 245D could not be construed to non-suit assessee that full and true disclosure was not made before ITSC. The petitioner is entitle to immunity from penalty and prosecution.  (AY.  2007-08 to 2012-13)

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