Commissioner of Income-tax-­25 and anr. v. Income-tax Settlement Commissioner, Additional Bench-II and ors
[Citation -2014-LL-1103-24]

Citation 2014-LL-1103-24
Appellant Name Commissioner of Income-tax-­25 and anr.
Respondent Name Income-tax Settlement Commissioner, Additional Bench-II and ors.
Court HIGH COURT OF BOMBAY
Relevant Act Income-tax
Date of Order 03/11/2014
Judgment View Judgment
Keyword Tags full and true disclosure • settlement commission • additional income • scope of enquiry • judicial review • name lender
Bot Summary: The grievance of petitioner revenue is that the settlement by the impugned order is bad as the impugned order ignores the petitioner's objection that the assessee has not made true and full disclosure of its Income to the Settlement Commission in its application and also at the time of passing the impugned order. 359 ITR 450 while dealing with the extent of judicial review in respect ::: Uploaded on - 14/11/2014 ::: Downloaded on - 28/01/2019 16:41:46 ::: ASN 2/5 WP-798 of order passed by the Settlement Commission observed as under: Before we deal with the merits of the challenge, it must be noted at the outset that the extent of judicial review in a determination made by the Settlement Commissioner must fall with the parameters settled by decided cases. In Jyotendrasinhji vs. S.I. Tripathi 201 ITR 611; AIR 1993 SC 1991 the Supreme Court emphasized that the only ground upon which an order passed by the Settlement Commission can be interfered with is that the order of the Commission is contrary to the provisions of the Act and that such contravention has prejudiced the appellant. The same principle has since been reiterated in a more recent judgment rendered in relation to the powers of the Settlement Commission constituted under the Central Excise Act in Union of India vs. Ind Swift Laboratories Ltd. 40 VST 1(SC); 7 GSTR 348; 4 SCC 635 by the Supreme Court; An order passed by the Settlement Commission could be interfered with only if the said order is found to be contrary to any provisions of the Act. After recording the submissions of the petitioner the impugned order holds that the explanation given by the applicant is reasonable as the applicant had based his disclosures of additional income by adopting the higher GP rate. In the circumstances, we find no reason to interfere with the order of the Settlement Commission passed under Section 245D(4) of the Act. ASN 5/5 WP-798 6) Accordingly, the petition is dismissed with no order as to costs.


IN HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION WRIT PETITION NO.798 OF 2014 Commissioner of Income Tax 25 and anr. ..Petitioners. vs. Income Tax Settlement Commissioner, Additional Bench II and ors. ..Respondents. Mr. Arvind Pinto for Petitioners. Mr. A.K.Jasani for Respondents. CORAM : M. S. SANKLECHA AND M.S. SONAK, JJ. DATE : O3 NOVEMBER 2014 PC: This petition under Article 226 of Constitution of India challenges order dated 19 August 2013 passed by Income Tax Settlement Commission (Settlement Commission) under Section 245D(4) of Income Tax Act, 1961 ( Act ). By impugned order assessment of respondent assessee was settled for A.Y.2010 11, 2011 12 and 2012 13 under Chapter XIXA of Act. grievance of petitioner revenue is that settlement by impugned order is bad as impugned order ignores petitioner's objection that assessee has not made true and full disclosure of its Income to Settlement Commission in its application and also at time of passing impugned order. 2) This Court in Major Metals Ltd. vs. Union of India and ors. 359 ITR 450 while dealing with extent of judicial review in respect ::: Uploaded on - 14/11/2014 ::: Downloaded on - 28/01/2019 16:41:46 ::: ASN 2/5 WP-798 of order passed by Settlement Commission observed as under: Before we deal with merits of challenge, it must be noted at outset that extent of judicial review in determination made by Settlement Commissioner must fall with parameters settled by decided cases. In Jyotendrasinhji vs. S.I. Tripathi (1993) 201 ITR 611 (SC); AIR 1993 SC 1991 Supreme Court emphasized that only ground upon which order passed by Settlement Commission can be interfered with is that order of Commission is contrary to provisions of Act and that such contravention has prejudiced appellant. This would be apart from grounds of bias, fraud or malice which would constitute separate category. Supreme Court held as follows ( Page 623 of 211 ITR). scope of enquiry, whether by High Court under article 226 or by this court under article136 is also same Whether order of Commission is contrary to any of provisions of Act and if so, apart from ground of bias, fraud and malice which, of course, constitute separate and independent category, has it prejudiced petitioner appellant. Reference in this behalf may be had to decision of this court in R.B.Shreeram Durga Prasad and Fatechand Nursing Das vs. Settlement Commission (IT and WT) (1989) 176 ITR 169 (SC); AIR 1989 SC 1038 which too was appeal against orders of Settlement Commission. Sabyasachi Mukharji, J. speaking for Bench comprising himself and S.R. Pandian, J. observed that in such case this court is concerned with legality of procedure followed and not with validity of order. learned Judge added judicial review is concerned not with decision but when decision making process. Reliance was placed upon decision of House of Lords in Chief Constable of Chief Constable of N.W. Police v. ::: Uploaded on - 14/11/2014 ::: Downloaded on - 28/01/2019 16:41:46 ::: ASN 3/5 WP-798 Evans(1982) 1 WLR 1155 (HL). Thus, appellate power under article 136 was equated to power of judicial review, where appeal is directed against orders of Settlement Commission. For all above reasons, we are of opinion that only ground upon which this Court can interfere in these appeals is that order of Commission is contrary to provisions of Act and that such contravention has prejudiced appellant. same principle has since been reiterated in more recent judgment rendered in relation to powers of Settlement Commission constituted under Central Excise Act in Union of India vs. Ind Swift Laboratories Ltd. (2011) 40 VST 1(SC); (2011) 7 GSTR 348 (SC); (201`1) 4 SCC 635 by Supreme Court (page 10 of 40VST and page 357 of 7 GSTR); order passed by Settlement Commission could be interfered with only if said order is found to be contrary to any provisions of Act. So far as findings of fact recorded by Commission or question of facts are concerned, same is not open for examination either by High Court or by Supreme Court. 3) Keeping above parameters in mind we shall now examine grievance of petitioner. It is submitted by Mr. Pinto, learned Counsel for petitioner that revenue had before Settlement Commission objected to settlement as assesse had not made in its settlement petition full and true disclosure of its income . It is petitioner's case that amount shown as purchases to extent of Rs.55.92 lacs of ploy bags be added to petitioner's income under Section 69C of Act. ( website published by Sales Tax department who had declared its supplier not to be genuine ::: Uploaded on - 14/11/2014 ::: Downloaded on - 28/01/2019 16:41:46 ::: ASN 4/5 WP-798 but mere name lender in 2004). 4) We find that that aforesaid submission of revenue has been considered by Tribunal in Paragraphs 10 to 12 of impugned order. After recording submissions of petitioner impugned order holds that explanation given by applicant is reasonable as applicant had based his disclosures of additional income by adopting higher GP rate. Consequently, alleged suspicious purchases was of no relevance. Besides, it also records that Revenue does not disputes that applicant had made actual purchases of poly bags as evidenced by Rule 9 report of Commissioner of income Tax. petitioner's submission that Section 69C of Act has to be invoked was on ground that suppliers were not available was also found untenable in view of decision of this Court in CIT vs. Nikunj Eximp Enterprises (P) Ltd. 35 Taxman 384 (Bombay)/216 Taxman 171 wherein it was held that merely because supplier of goods had not appeared before Assessing Officer it would not lead to conclusion that no purchases were made by petitioner. 5) In view of fact that Tribunal has considered submissions of petitioners as well as assessee and has recorded finding of fact that purchases of assessee were genuine. Consequently no occasion to invoke Section 69C of Act can arise. Moreover, this finding of fact has not been shown to be perverse. In circumstances, we find no reason to interfere with order of Settlement Commission passed under Section 245D(4) of Act. ASN 5/5 WP-798 6) Accordingly, petition is dismissed with no order as to costs. (M. S. SONAK, J.) (M.S. SANKLECHA, J.) Commissioner of Income-tax-25 and anr. v. Income-tax Settlement Commissioner, Additional Bench-II and or
Report Error