Principal Commissioner of Income-tax, Bhagalpur v. Union of India and Anr. / City Developers
[Citation -2019-LL-0220-71]

Citation 2019-LL-0220-71
Appellant Name Principal Commissioner of Income-tax, Bhagalpur
Respondent Name Union of India and Anr. / City Developers
Court HIGH COURT OF PATNA
Relevant Act Income-tax
Date of Order 20/02/2019
Judgment View Judgment
Keyword Tags full and true disclosure • settlement commission • disclosure of income
Bot Summary: The Income Tax Department through the Principal Commissioner of Income Tax, Bhagalpur prays for issuance of a Patna High Court CWJC No.9134 of 2017 dt.20-02-2019 2/5 writ in the nature of certiorari for quashing the order dated 04.01.2017 whereby the Income Tax Settlement Commission constituted under Section 245B of the Income Tax Act, 1961 has opined that the respondent No.2 having fulfilled the conditions laid down under Section 245C(1) for moving an application for settlement with nothing adverse to hold the application invalid, has been pleased to allow the application to be proceeded with while declaring it not invalid under Section 245D(2C) of 'the Act'. It is not in dispute that not only the application so filed by the petitioner seeking a settlement for assessment years 2014-15 and 2015-16 has been proceeded with by the 'Commission' but even final orders have been passed dated 25.05.2017 and allowed in exercise of powers vested under Section 245D(4) of 'the Act' and which has been questioned by the Department by filing the second writ petition arising from C.W.J.C. No. 1365 of 2018. Reverting to the issue in hand, the petitioner department is aggrieved by the processing of the application and the order so passed by the Commission in not holding the application invalid for the reasons that even when the respondent No.2 was facing prosecution for the assessment year in question, it never disclosed this aspect of the matter before the 'Commission'. Mr. Pathy learned counsel for the opposite party No.2 informs that it is on a similar objection raised that the Patna High Court CWJC No.9134 of 2017 dt.20-02-2019 4/5 'Commission' did not proceed with the application until the prosecution ended in exoneration of the respondent No.2. Even otherwise we fail to appreciate as to how such an objection can obstruct the exercise of the Commission under Section 245(2C) of 'the Act' because such exercise is founded on the provisions underlying Section 245C(2) which enables an assessee to move the 'Commission' at any stage during the pendency of assessment proceedings in case he is of the opinion that he has not given full and true disclosure of his income before the Assessing Officer. While the Patna High Court CWJC No.9134 of 2017 dt.20-02-2019 5/5 Settlement Commission kept the proceedings in abeyance due to pendency of the prosecution case, in our opinion even otherwise, the statutory provisions underlying Section 245C does not preclude the 'Commission' from proceeding despite such prosecution because the 3 pre-requisites which requires to be satisfied for invoking the remedy, does not require the assessee to disclose whether or not he is facing prosecution for the period in question. For the reasons discussed, we find absolutely no error in the jurisdiction exercised by the Settlement Commission in not declaring the application of the respondent 'not invalid' to interfere therewith and that the final orders have already been passed by the 'Commission' we dispose of the writ petition.


IN HIGH COURT OF JUDICATURE AT PATNA Civil Writ Jurisdiction Case No.9134 of 2017 Principal Commissioner of Income Tax, Bhagalpur Son of Sri Sunder Singh, Office of Assistant Commissioner of Income Tax Circle-1 1, 3rd Floor, R.N. Plaza, R B S S Sahay Road, Bhagalpur. ... ... Petitioner/s Versus 1. Union of India and Anr. 2. M/s City Developers Bansikunj, Dr. R.P. Road, Bhagalpur- 812002. ... ... Respondent/s with Civil Writ Jurisdiction Case No. 1365 of 2018 Principal Commissioner of Income Tax, Bhagalpur ... ... Petitioner/s Versus Union of India and Anr. ... ... Respondent/s Appearance : (In Civil Writ Jurisdiction Case No. 9134 of 2017) For Petitioner/s : Mr. Archana Sinha @ Archana Shahi, Adv. For Respondent/s : Mr. S.D Sanjay, Addl. Soc. Gen. (In Civil Writ Jurisdiction Case No. 1365 of 2018) For Petitioner/s : Mr.Archana Sinha @ Archana Shahi, Adv. For Respondent/s : Mr. S. D Sanjay, Addl. Soc. Gen. CORAM: HONOURABLE MR. JUSTICE JYOTI SARAN and HONOURABLE MR. JUSTICE ARVIND SRIVASTAVA ORAL JUDGMENT (Per: HONOURABLE MR. JUSTICE JYOTI SARAN) Date : 20-02-2019 Heard Mr. Archana Sinha, learned counsel for Income Tax Department who is petitioner before this Court through Principal Commissioner, Income Tax Department and Mr. D.V. Pathy, learned counsel for respondent No.2 and Mr. Anshuman Singh, learned counsel for Central Government Counsel. Income Tax Department through Principal Commissioner of Income Tax, Bhagalpur prays for issuance of Patna High Court CWJC No.9134 of 2017 dt.20-02-2019 2/5 writ in nature of certiorari for quashing order dated 04.01.2017 whereby Income Tax Settlement Commission (hereinafter referred to as 'Commission') constituted under Section 245B of Income Tax Act, 1961 (hereinafter referred to as 'the Act') has opined that respondent No.2 having fulfilled conditions laid down under Section 245C(1) for moving application for settlement with nothing adverse to hold application invalid, has been pleased to allow application to be proceeded with while declaring it not invalid under Section 245D(2C) of 'the Act'. It is not in dispute that not only application so filed by petitioner seeking settlement for assessment years 2014-15 and 2015-16 has been proceeded with by 'Commission' but even final orders have been passed dated 25.05.2017 and allowed in exercise of powers vested under Section 245D(4) of 'the Act' and which has been questioned by Department by filing second writ petition arising from C.W.J.C. No. 1365 of 2018. said writ petition has been listed analogous with present writ petition following our order passed on 05.02.2019 but records transpired that said writ petition has been admitted by this Court vide order passed on 09.02.2018 and when notice was issued to respondent No.2 which Mr. Pathy appearing on Patna High Court CWJC No.9134 of 2017 dt.20-02-2019 3/5 their behalf informs, has yet to be received. Ms. Sinha learned counsel appearing for Income Tax Department undertakes to serve copy of writ petition arising from C.W.J.C. No.1365 of 2018 on respondent No.2 through Mr. Pathy by tomorrow. Since C.W.J.C. No. 1365 of 2018 has already been admitted, even if order impugned therein is relatable to issue raised in present writ petition, it cannot be heard analogous with C.W.J.C. No.9134 of 2017 which is yet at admission stage and thus we delist C.W.J.C. No.1365 of 2018 and direct for its listing under heading 'For Hearing' as first case subject to part heard at 2.15 P.M. on Friday next i.e 22.2.2019. Reverting to issue in hand, petitioner department is aggrieved by processing of application and order so passed by Commission in not holding application invalid for reasons that even when respondent No.2 was facing prosecution for assessment year in question, it never disclosed this aspect of matter before 'Commission'. Mr. Pathy learned counsel for opposite party No.2 informs that it is on similar objection raised that Patna High Court CWJC No.9134 of 2017 dt.20-02-2019 4/5 'Commission' did not proceed with application until prosecution ended in exoneration of respondent No.2. Even otherwise we fail to appreciate as to how such objection can obstruct exercise of Commission under Section 245(2C) of 'the Act' because such exercise is founded on provisions underlying Section 245C(2) which enables assessee to move 'Commission' at any stage during pendency of assessment proceedings in case he is of opinion that he has not given full and true disclosure of his income before Assessing Officer. In other words, where assessment proceedings are pending and assessee is satisfied that he has not given full and true disclosure of income before Assessing Officer he can move 'Commission' by filing application under Section 245C(1) of 'the Act' disclosing his full and true income including one which has not been disclosed before Assessing authority as well manner in which such income has been derived together with additional amount of tax payable thereon. To that extent, Ms. Sinha is absolutely correct and unless these pre-requisites are satisfied, Settlement Commission would not proceed with application. situation in present contest is different. While Patna High Court CWJC No.9134 of 2017 dt.20-02-2019 5/5 Settlement Commission kept proceedings in abeyance due to pendency of prosecution case, in our opinion even otherwise, statutory provisions underlying Section 245C does not preclude 'Commission' from proceeding despite such prosecution because 3 pre-requisites which requires to be satisfied for invoking remedy, does not require assessee to disclose whether or not he is facing prosecution for period in question. For reasons discussed, we find absolutely no error in jurisdiction exercised by Settlement Commission in not declaring application of respondent 'not invalid' to interfere therewith and that final orders have already been passed by 'Commission' we dispose of writ petition. Re: C.W.J.C. No.1365 of 2018 In view of position explained above, list this matter 'For Hearing' on 22.02.2019 at 2.15 P.M. (Jyoti Saran, J) ( Arvind Srivastava, J) Bibhash AFR/NAFR AFR CAV DATE NA Uploading Date 28.02.2019 Transmission Date NA Principal Commissioner of Income-tax, Bhagalpur v. Union of India and Anr. / City Developer
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