Umed Investments & Marketing Co. Pvt. Ltd. v. Assistant Commissioner of Income-tax, Company Circle-II(4), Chennai / The Income-tax Officer (OSD), Company Circle-II(4) (i/c), Chennai / Income-tax Settlement Commission, Chennai
[Citation -2019-LL-0809-152]

Citation 2019-LL-0809-152
Appellant Name Umed Investments & Marketing Co. Pvt. Ltd.
Respondent Name Assistant Commissioner of Income-tax, Company Circle-II(4), Chennai / The Income-tax Officer (OSD), Company Circle-II(4) (i/c), Chennai / Income-tax Settlement Commission, Chennai
Court HIGH COURT OF MADRAS
Relevant Act Income-tax
Date of Order 09/08/2019
Judgment View Judgment
Keyword Tags settlement application • settlement commission • undisclosed income • commission earned • double taxation
Bot Summary: Income Tax Settlement Commission, Additional Bench, Sathguru Complex, 640, Anna Salai, Chennai - 600035 Respondents PRAYER: Writ Petition filed under Article 226 of the Constitution of India, praying to issue a writ of Certiorari, to call for the records pertaining to order dated 13.08.2009 under Section 281-B of the Income Tax Act, 1961 1/6 W.P.No. For Petitioner : Mr.V.S.Jayakumar For Respondents : Mr.J.Narayanasamy, SSC ORDER When Sri.Umed C.Mehta had filed a Settlement Application No. TN/CN7/2009-10/2/IT before the Income Tax Settlement Commission, who is the 3rd respondent herein, he had stated that the undisclosed income admitted in the Settlement Application was a commission earned from accommodation transaction with Mr.Parasmal Jain of M/s.Kawarlal Group. In consequence to the rejection of the Settlement Application of Mr.Umed C.Mehta, the petitioner herein has been served with an impugned order under Section 281-B of the Income Tax Act, which is under challenge in the present writ petition. Though the petitioner has raised several grounds in the writ petition, the learned counsel would submit that the aforesaid Mr.Parasmal Jain, during the pendency of the writ petition, had filed a Settlement Application before the Income Tax Settlement Commission in Settlement Application No.TN/CN51/2014-15/24-30/IT, wherein the very same income admitted by Mr.Umed C.Mehta has been dealt with in that proceedings and the application came to be disposed of. In view of the orders passed by the Settlement Commission in the case of Parasmal Jain, the respondents cannot tax the petitioner herein on the same transaction, which would result in double taxation. Per contra, the learned Standing Counsel for the respondents submitted that the proceedings pertaining to Umed C.Mehta before the Settlement Commission are in the nature of admonition and discretionary proceedings and therefore the findings that the income offered in one case, cannot be automatically applied and deducted in other cases, even though the transactions are one and the same and that the parties approaching the Commission should independently satisfy the Commission on all other criteria mandated under the provisions of the Income Tax Act. The order of the Settlement Commission, in the case of Parasmal Jain, was pursuant to the orders of the Settlement Commission in the case of Umed C.Mehta.


IN HIGH COURT OF JUDICATURE OF MADRAS DATED: 09.08.2019 CORAM: HONOURABLE MR. JUSTICE M.S. RAMESH W.P.No.27105 of 2009 and M.P.No.1 of 2009 M/s.Umed Investments & Marketing Co. Pvt. Ltd., 31, Kent Apartments, 26, Ritherdon Road, Vepery, Chennai - 600007. Rep. by its Director Sri. Umed C.Mehta ...Petitioner Vs 1. Assistant Commissioner of Income Tax, Company Circle, II (4), V Floor, New Block, Room No.514, 121, Nungambakkam High Road, Chennai - 600034. 2. Income Tax Officer (OSD), Company Circle-II(4) (i/c), Room No.514, New Block, 121, Nungambakkam High Road, Chennai - 600034. 3. Income Tax Settlement Commission, Additional Bench, Sathguru Complex, 640, Anna Salai, Chennai - 600035 Respondents PRAYER: Writ Petition filed under Article 226 of Constitution of India, praying to issue writ of Certiorari, to call for records pertaining to order dated 13.08.2009 under Section 281-B of Income Tax Act, 1961 1/6 W.P.No.27105 of 2009 with reference to GI.No:AAACK1447N passed by Assistant Commissioner of Income Tax, Company Circle II(4), Chennai - 34, first respondent herein addressed to M/s.Umed Investments & Marketing Co. and quash same. For Petitioner : Mr.V.S.Jayakumar For Respondents : Mr.J.Narayanasamy, SSC ORDER When Sri.Umed C.Mehta had filed Settlement Application No. TN/CN7/2009-10/2/IT before Income Tax Settlement Commission, who is 3rd respondent herein, he had stated that undisclosed income admitted in Settlement Application was commission earned from accommodation transaction with Mr.Parasmal Jain of M/s.Kawarlal Group. This explanation was disbelieved and Settlement Application came to be rejected on 23.10.2009. As against rejection order of 3rd respondent, petitioner has filed this writ petition. 2. In consequence to rejection of Settlement Application of Mr.Umed C.Mehta, petitioner herein has been served with impugned order under Section 281-B of Income Tax Act, which is under challenge in present writ petition. http://www.judis.nic.in 2/6 W.P.No.27105 of 2009 3. Though petitioner has raised several grounds in writ petition, learned counsel would submit that aforesaid Mr.Parasmal Jain, during pendency of writ petition, had filed Settlement Application before Income Tax Settlement Commission in Settlement Application No.TN/CN51/2014-15/24-30/IT, wherein very same income admitted by Mr.Umed C.Mehta has been dealt with in that proceedings and application came to be disposed of. In view of orders passed by Settlement Commission in case of Parasmal Jain, respondents cannot tax petitioner herein on same transaction, which would result in double taxation. Hence, he would submit that order of Settlement Commission passed in case of Umed C.Mehta requires to be re-visited. 4. Per contra, learned Standing Counsel for respondents submitted that proceedings pertaining to Umed C.Mehta before Settlement Commission are in nature of admonition and discretionary proceedings and therefore findings that income offered in one case, cannot be automatically applied and deducted in other cases, even though transactions are one and same and that parties approaching Commission should independently satisfy Commission on all other criteria mandated under provisions of Income Tax Act. Hence, http://www.judis.nic.in 3/6 W.P.No.27105 of 2009 learned Standing Counsel would object to petitioner counsel's request for remand. 5. order of Settlement Commission, in case of Parasmal Jain, was pursuant to orders of Settlement Commission in case of Umed C.Mehta. It is not in dispute that transactions pertaining to undisclosed income of Umed C.Mehta is also subject matter of Settlement Application in case of Parasmal Jain. If that being so, there is possibility that such subsequent consideration by Settlement Commission could be deemed as double taxation, in case order dated 23.10.2009 passed by Settlement Commission, in case of Umed C.Mehta, is upheld. 6. It is also stated that order passed in case of Parasmal Jain by Settlement Commission has become final. While that being so, if objections of learned Standing Counsel for respondents is to be accepted, possibility of double taxation for one transaction may occur. As such, this Court is of view that issue in case of Umed C.Mehta could be reconsidered, in light of subsequent development through orders passed by Settlement Commission in case of Parasmal Jain. Consequently, I deem it proper to refrain from addressing any other http://www.judis.nic.in 4/6 W.P.No.27105 of 2009 grounds raised by petitioner, challenging impugned proceedings in this writ petition and that any further decision could await, after final orders are passed by Settlement Commission on remand. 7. It would be relevant to point out herein that when Umed C.Mehta had challenged order of Settlement Commission dated 23.10.2009 passed in his Settlement Application No. TN/CN7/2009-10/2/IT, before this Court in W.P.No.23631 of 2009, this Court, by order dated 09.08.2019, had set aside order of 3rd respondent herein dated 23.10.2009 and remanded matter back for fresh consideration. 8. In view of above, it would not be appropriate to interfere with present impugned order at this stage, but, it would be appropriate to await decision of Settlement Commission, after remand, in case of Umed C.Mehta. 9. Accordingly, writ petition stands closed. No costs. Consequently, connected miscellaneous petition is closed. 09.08.2019 Index:Yes/No Internet: Yes/No Speaking order/Non-speaking order hvk 5/6 W.P.No.27105 of 2009 M.S.RAMESH,J. hvk To 1. Assistant Commissioner of Income Tax, Company Circle, II (4), V Floor, New Block, Room No.514, 121, Nungambakkam High Road, Chennai - 600034. 2. Income Tax Officer (OSD), Company Circle-II(4) (i/c), Room No.514, New Block, 121, Nungambakkam High Road, Chennai - 600034. 3. Income Tax Settlement Commission, Additional Bench, Sathguru Complex, 640, Anna Salai, Chennai - 600035. W.P.No.27105 of 2009 and M.P.No.1 of 2009 09.08.2019 6/6 Umed Investments & Marketing Co. Pvt. Ltd. v. Assistant Commissioner of Income-tax, Company Circle-II(4), Chennai / Income-tax Officer (OSD), Company Circle-II(4) (i/c), Chennai / Income-tax Settlement Commission, Chennai
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