A search and seizure action under section 132(1) of the Act\u00a0 was\u00a0 conducted at the premises of\u00a0 M\/s Ajmera Housing Corporation and incriminating materials\u00a0\u00a0 in the form of voluminous books of account, loose papers, files, hard disk, pen drives etc. were found and on that basis the income was assessed. The assessee approached the Settlement Commission by filing an application under section 245C(1) of the Act. The Settlement Commission called for report from the CIT as per the provisions of section 245D(1) of the Act. The CIT in his report alleged\u00a0\u00a0\u00a0\u00a0 that the applicant has not made true and full disclosure of its income. Hence, the application shall not be entertained at all. The Applicant, thereafter, filed revised settlement application declaring higher undisclosed income. The SettlementCommission passed an order under section 245D(1) of the Act and decided to proceed with the application. During the course of hearing the Applicant made further disclosure of undisclosed income before the Settlement Commission. The Settlement Commission passed final order under section 245D(4) of the Act and settled the undisclosed income by observing that the Applicant had cooperated during the course of proceedings before it. The department being aggrieved by the order of the Settlement Commission filed a Writ before the Hon\u2019ble Bombay High Court. The Hon\u2019ble High Court set aside the order of the Settlement Commission holding that it had not given any finding as to whether there was full and true disclosure of income by the Applicant. The Hon\u2019ble\u00a0 High Court further held that\u00a0 as the Settlement Commission has not apprised the department about the revised settlement application, the final order passed by it is against the principles of natural justice. Thus, the Hon\u2019ble Bombay High Court has set aside the order of\u00a0\u00a0 the Settlement Commission and remitted the entire issue back to it for deciding\u00a0\u00a0 the same afresh as per the provisions of law. The assessee being aggrieved by the order of the Hon\u2019ble Bombay High Court filed SLP before the Hon\u2019ble Supreme Court. The Hon\u2019ble Supreme Court set aside the order and remitted the issue back\u00a0 \u00a0to the Bombay High Court on the ground that it had not taken into consideration second report of the Commissioner which approximately coincided with the figures arrived at by the Settlement Commission and accepted by the Applicant.\u00a0\u00a0 As per the directions of the Hon\u2019ble Supreme Court, Bombay High Court passed\u00a0\u00a0\u00a0\u00a0\u00a0 a fresh order and once again setaside the order of the Settlement Commission<\/p>\n
\u00a0<\/p>\n
\u00a0<\/p>\n
by holding that the Appellant had failed to make true and full disclosure initially\u00a0 as well as at the time of second disclosure and also for violation of principles of natural justice as proper opportunity was not given to department.<\/p>\n
The Applicant being aggrieved by the decision of the Hon\u2019ble Bombay High Court filed the present SLP before the Hon\u2019ble Supreme Court.<\/p>\n
\u00a0<\/p>\n
Question arises as to whether disclosure of \u201cfull and true\u201d particulars of undisclosed income and \u201cthe manner\u201d in which such income had been derived\u00a0\u00a0\u00a0 are the pre-requisites for a valid application under section 245C(1) of the Act.<\/p>\n
\u00a0<\/p>\n
In the present case the Hon\u2019ble Bombay High Court has remitted the issue back\u00a0\u00a0\u00a0\u00a0 to the Settlement Commission for determination of total income, penalty etc. However, the Hon\u2019ble Bombay High Court while setting aside the case, has not given any direction to examine the issue of maintainability of application under section 245C(1) of the Act in the absence of full and true disclosure which\u00a0 is sine qua non for deciding the settlement of cases before the Settlement Commission.<\/p>\n
\u00a0<\/p>\n
Dismissing the petition, the Court held that, on perusal of provisions of section 245C(1) of the Act, it is clear that at the time of filing an application before the Settlement Commission the Applicant has to fulfill three conditions, namely: (i) disclose full and true disclosure of its undisclosed income, (ii) the manner of deriving the undisclosed income and (iii) the amount of additional tax payable\u00a0\u00a0\u00a0\u00a0 on the undisclosed income. Therefore, unless the Settlement Commission records its satisfaction on this aspect, it will not have any jurisdiction to pass any order settling the case. Thus, the Hon\u2019ble Bombay High Court was not justified in setting aside the\u00a0 proceedings before the\u00a0 Settlement Commission even\u00a0 though\u00a0 it was convinced that the Applicant had not made full and true disclosure of their income while making application under section 245C of\u00a0 the Act. Add (AY. 1989-90, 1990-91, 1991-92, 1992-93, 1993-94) (CA Nos.6827, 6848 of 2010<\/p>\n
Editorial : <\/em><\/strong>Ratio is explained in PCIT v. Shreyansh Corporation (2020) 421 ITR 153\/268 Taxman 334 (Guj) (HC) PCIT v. ITSC (2017) 249 Taxman 54\/(2018) 409 ITR 495 (Guj.) (HC)<\/em><\/strong><\/p>\n \u00a0<\/em><\/strong><\/p>\n \u00a0<\/em><\/strong><\/p>\n 292 CTR 363\/79 taxmann.com 186 (Bom) (HC)<\/em><\/strong><\/p>\n \u201cSeek not greater wealth, but simpler pleasure; not higher fortune, but deeper felicity.\u201d<\/em><\/p>\n – Mahatma Gandhi<\/p>\n","protected":false},"excerpt":{"rendered":" S. 245C : Settlement Commission – Application for settlement of cases – Undisclosed income – full and true disclosure \u2013 Revising the application during the course of proceedings is not permissible. [S. 245D(4)]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[21],"tags":[],"class_list":["post-13441","post","type-post","status-publish","format-standard","hentry","category-income-tax-act"],"acf":[],"jetpack_featured_media_url":"","jetpack_shortlink":"https:\/\/wp.me\/p9S2Rw-3uN","jetpack-related-posts":[],"jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts\/13441","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/comments?post=13441"}],"version-history":[{"count":1,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts\/13441\/revisions"}],"predecessor-version":[{"id":13442,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts\/13441\/revisions\/13442"}],"wp:attachment":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/media?parent=13441"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/categories?post=13441"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/tags?post=13441"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}Editorial : SLP of revenue is dismissed, PCIT v. Shree Aadhyashakti Enterprises (2018) 256 Taxman 70\/406 ITR 40 (SC), CIT v. ITSC (2017) 244 Taxman 156 (Guj.) (HC), also refer, (WP No. 2562 of 2016 dt. 12-2-2017) PCIT v. ITSC (2017)<\/h4>\n