C/SCA/2760/2020 ORDER IN HIGH COURT OF GUJARAT AT AHMEDABAD R/SPECIAL CIVIL APPLICATION NO. 2760 of 2020 PRINCIPAL COMMISSIONER OF INCOME TAX Versus AKSHAT SHAH Appearance: MRS MAUNA M BHATT(174) for Petitioner(s) No. 1 for Respondent(s) No. 1,2 CORAM: HONOURABLE MR.JUSTICE J.B.PARDIWALA and HONOURABLE MR. JUSTICE BHARGAV D. KARIA Date : 10/02/2020 ORAL ORDER (PER : HONOURABLE MR. JUSTICE BHARGAV D. KARIA) 1. By this petition under Article 226 and 227 of Constitution of India, petitioner has challenged order dated 17.10.2018, passed by Income Tax Settlement Commission (for short Settlement Commission ) under Section 245D of Income Tax Act 1961 (for short Act 1961) on ground that Settlement Commission passed impugned order though there was no true and full disclosure by assessee in application for settlement filed before Commission. 2. Mrs.Mauna Bhatt, learned Standing Counsel appearing for petitioner submitted that report of Commissioner under Rule 9 of Settlement Rules was submitted before Settlement Commission on basis of certain loose papers which were seized and inventoried at Page NO.43 to 45 of Annexure 9. These loose papers were found during course of search Page 1 of 18 Downloaded on : Tue Apr 21 10:43:55 IST 2020 C/SCA/2760/2020 ORDER proceedings at residence of assessee which contained valuation report dated 07.10.2010 for Financial Year 2009 10. According to valuation report, total value of jewelery was Rs.2,04,88,650/ . According to Mrs.Bhatt, assessee did not disclose this valuation of jewelery as per valuation report seized during course of search proceedings in application filed before Settlement Commission. It was, therefore, submitted that there is no true and full disclosure by assessee. 3. Reliance was placed on decision of Supreme Court in case of Ajmera Housing Corporation Vs. Commissioner of Income Tax [(2010) 326 ITR 642 (SC) dated 20th August, 2010 to submit that as there is no true and full disclosure by assesseee, order passed by Settlement Commission is required to be quashed and set aside. 4. With regard to aforesaid submission, it would be necessary to refer findings of Settlement Commission with regard to above issue, which is reproduced herein below: 9.2 Second issue pertain to unexplained investment of applicant in form of inventory of jewellery amounting to Rs.2,04,88,560/ found during course of search, although no physical stock of jewellery was found from possession of applicant out of said inventory of jewellery. In Report of PCIT dated 19.09.2018, based on valuation report dated 07.01.2010 found during course of search, PCIT has stated that Page 2 of 18 Downloaded on : Tue Apr 21 10:43:55 IST 2020 C/SCA/2760/2020 ORDER amount of Rs.2,04,88,560/ should be considered as undisclosed investment of applicant. In this regard, applicant has provided detailed submission explaining reason for obtaining such valuation report in year 2010 contending that amount of Rs.2,04,88,560/ should not be treated as undisclosed investment and any addition in this regard is unwarranted and has relied on decision of Hon'ble Gujarat High Court in case of Commissioner of Income Tax Vs. Mrugesh Jaykrishna [2000] 109 TAXMAN 89 (GUJ). However, without prejudice to his contentions, applicant submits that even though he does not agree with addition of Rs.2,04,8,560/ proposed by PCIT as undisclosed investment, to put quietus to issue and to settle matterthe applicant agrees to 50% of addition (i.e. Rs.1,02,44,280/ ) proposed by PCIT in AY 2010 11. Accordingly, sum of Rs.1,02,44,280/ is being added to income of applicant in Asst. Yr. 2010 11. 5. Settlement Commission arrived at aforesaid findings and accepted consensus given by assessee so as to put quietus to issue to settle matter on basis of explanation given by assessee to effect that in year 2010, assessee was contemplating to make investment into real estate and was contemplating to avail loan for said purposes and accordingly, valuation report was obtained solely for said purpose. It was also submitted by assessee that even during course of search proceedings, no physical jewelry belonging to assessee was found from residence or bank lockers which were referred to in valuation report. physical jewellary which was found during course of search proceedings was far less in terms of value in comparison to Page 3 of 18 Downloaded on : Tue Apr 21 10:43:55 IST 2020 C/SCA/2760/2020 ORDER jewellery reflected in valuation report obtained in year 2010 for purpose of obtaining loan. 5. This Court in case of Principal Commissioner Income Tax Surat 1 Vs. Shankarlal Nebhumal Uttamchandani vide judgment and order dated 07.01.2020 passed in Special Civil Application No.13251 of 2019 and allied matters, which were having similar facts as in present case, has observed and relied thus: 6. Per contra, learned Senior Advocate Mr. S.N. Soparkar assisted by learned advocate Mr. Bandish Soparkar for respondent assessee submitted that facts of present case are different than facts before Supreme Court in case of Ajmera Housing Corpn. (supra). Reliance was placed upon decision of Apex Court in case of Jyotendrasinhji v. S.I. Tripathi reported in (1993) 201 ITR 611 (SC) dated 2nd April, 1993 to submit that this Court is required to consider legality of procedure followed by Commission and not validity of order. He relied upon following observations made by Apex Court in said decision : 15. It is true that finality clause contained in Section 245 I does not and cannot bar jurisdiction of High Court under Article 226 or jurisdiction of this court under Article 32 or under Article 136, as case may be. But that does not mean that jurisdiction of this Court in appeal preferred directly in this court is any different than what it would be if assessee had first approached High Court under Article 226 and then come up in appeal to this court under Article 136. party does not and cannot gain any advantage by approaching this Court directly under Article 136, instead of approaching High Court under Article 226. This is not limitation inherent in Article 136; it is limitation which this court imposes on itself having regard to nature of function performed by Commission and keeping in view principles of Page 4 of 18 Downloaded on : Tue Apr 21 10:43:55 IST 2020 C/SCA/2760/2020 ORDER judicial review. May be, there is also some force in what Dr. Gauri Shankar says viz., that order of commission is in nature of package deal and that it may not be possible, ordinarily speaking, to dissect its order and that assessee should not be permitted to accept what is favourable to him and reject what is not. According to learned counsel, Commission is not even required or obligated to pass reasoned order. Be that as it may, fact remains that it is open to Commission to accept amount of tax by way of settlement and to prescribe manner in which said amount shall be paid. It may condone defaults and lapses on part of assessee and may waive interest, penalties or prosecution, where it thinks appropriate. Indeed, it would be difficult to predicate reasons and considerations which induce commission to make particular order, unless of course commission itself chooses to, give reasons for its order. Even if it gives reasons in given case, scope of enquiry in appeal remains same as indicated above viz., whether it is,contrary to any of provisions of Act. In this context, it is relevant to note that principle of natural justice (audi alteram parterri) has been incorporated in Section 245 D itself. sole overall limitation upon Commission thus appears, to be that it should act in accordance with provisions of Act. scope of enquiry, whether by High Court under Article 226 or by this Court under Article 136 is also same whether order of Commission is contrary to any of provisions of Act and if so, apart from ground of bias, fraud & malice which, of course, constitute separate independent category has it prejudiced petitioner/appellant. Reference in this behalf may be had to decision of this Court in RB Shreeram Durga Prasad & Fatechand Nursing Das v. Settlement Commission (1989) 176 I.T.R. 169, 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 with decision making process." Reliance was placed upon decision of House of Lords in Chief Constable of N.W. Police v. Evans, [1982] 1 W.L.R.1155. Thus, appellate power under Article 136 was equated to power of judicial review, where Page 5 of 18 Downloaded on : Tue Apr 21 10:43:55 IST 2020 C/SCA/2760/2020 ORDER 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 main controversy in these appeals relates to interpretation of settlement deeds though it is true, some contentions of law are also raised. commission has interpreted trust deeds in particular manner. Even if interpretation placed by commission on said deeds is not correct, it would not be ground for interference in these appeals, since wrong interpretation of deed of trust cannot be said to be violation of provisions of Income Tax Act. it is equally clear that interpretation placed upon said deeds by Commission does not bind authorities under Act in proceedings relating to other assessment years. 6.1) Learned Senior Counsel for respondent assessee further relied upon decision of this Court in case of Commissioner of Income tax I v. Income Tax Settlement Commission reported in (2017) 390 ITR 306 (Gujarat) dated 12th July, 2016, wherein this Court has held as under : 10. It can thus be seen that on issue of true and full disclosure, stage at which such disclosures should be made and effect of making further disclosures by revising initial offers of settlement was examined by Supreme Court in case of Ajmera Housing Corporation (supra). manner in which Supreme Court has dealt with such issue and has made elaborate and conclusive observations, it cannot be stated contrary to what was argued before us that above noted portion of judgment should not be seen as ration of judgment of Supreme Court. Ratio of this judgment is that true and full disclosure of income must be made at initial stage and large scale remissions in such disclosure itself would show that initial disclosures were not true. 11. However, facts of present case are somewhat different. applicants had initially offered on money rotation of Rs. 25 lakhs, Rs. 21 lakhs and Rs. 30 lakhs respectively and income at Page 6 of 18 Downloaded on : Tue Apr 21 10:43:55 IST 2020 C/SCA/2760/2020 ORDER rate of 12.5 per cent thereof by way of interest earned which during course of assessment proceedings was revised to Rs. 50 lakhs, Rs. 50 lakhs and Rs. 75 lakhs respectively with rate of return at 15 per cent. With respect to revised rate of return, even counsel for Revenue would not be in position to argue that same would form part of declaration of two incomes since whether rate of return should be estimated to 12.5 per cent or 15 per cent would be would be substantially in realm of estimation of not profit. He would however, strenuously contend that revised declaration of on money should be enough to establish that initial disclosures made by assessees were not full or true disclosures of such income. In this context, we had called for letter written by applicants making such revised offers. Copies of such letters dated 6.2.2014 written by partners of firm are produced on record. In such letters, it was conveyed that applicants had filed petition for settlement in which offered sum of Rs. 7,75,000/ at rate of 12 per cent on peak balance of funds deployed in money lending activity. It was further stated that applicant during course of hearing under section 245D(4), in spirit of settlement, agreed to further additional income of Rs. 39,12,667/ which is computed on basis stated hereinbelow: a. interest in money lending activity @ 15% p.a.; b. Amount deployed in money lending activity Rs. 50,00,000/ c. Income out of on money receipt @ 15%. 12. Similar declarations were made in case of other applicants as well. It can thus be seen that these revised offers of tax was in nature of spirit of settlement and cannot be seen in strict sense of abandoning initial disclosures and replacing same by fresh disclosures on basis of such revised offers. What in essence assessee did was to raise their offers marginally to put end to entire dispute through settlement or in spirit of settlement as is referred to in said letter. This cannot be seen as accepting that original or initial declaration was not true and full disclosure thereby paving way for application of judgment in case of Ajmera Housing Corporation (supra). 6.2) Reliance was also placed on decision of Page 7 of 18 Downloaded on : Tue Apr 21 10:43:55 IST 2020 C/SCA/2760/2020 ORDER Court in case of Commissioner of Income tax I v. Income Tax Settlement Commission and anr. reported in (2017) 244 Taxman 156 (Gujarat) dated 2nd September, 2016, wherein it is held as under : 8. In view of above facts and circumstances, more particularly, in view of fact that this Court is dealing with and examining order of said commission in exercise of writ jurisdiction keeping in view scope of judicial review and keeping in view exercise of extra ordinary jurisdiction, this Court is of opinion that from overall background of fact without said Commission has thoroughly examined minutely all details related to issue in question and arrived at particular finding which this Court found not to substitute same. In background of these facts and circumstances, resultantly, petition deserves to be dismissed. 6.3) Reliance was also placed on decision of this Court in case of Principal Commissioner of Income tax, Central v. Income Tax Settlement Commission reported in (2017) 249 Taxman 54 (Gujarat) dated 13th June, 2017, wherein it is held as under : 14. It is true that before Settlement Commission, assessees indicated that additional disclosure of Rs.50 lakhs each may be accounted for assessment year 2014 15. However, we cannot lose sight of fact that such disclosures were, as noted above, in spirit of settlement and to put end to controversy. assessees therefore cannot be pinned down to effect of such disclosures in year 2014 15 alone. We cannot fragment larger picture and telescope additional disclosures for particular year and taking into account comparable figures for that year decide whether such disclosures would shake initial disclosures as to apply ratio laid down by Supreme Court in case of Ajmera Housing (supra) and to hold that initial disclosures themselves were untrue projecting additional disclosures for all years assessees had sought settlement, we find Commission committed no error in accepting them and in proceeding to pass final order on such settlement applications. Page 8 of 18 Downloaded on : Tue Apr 21 10:43:55 IST 2020 C/SCA/2760/2020 ORDER 6.4) Reliance was also placed on recent decision of this Court in case of Principal Commissioner of Income Tax, Central v. Income Tax Settlement Commission dated 22nd October, 2019 in Special Civil Application No. 9883/2019, wherein it is held as under : 50. In above backdrop, decision of Supreme Court in case of Ajmera Housing Corporation v. Commissioner of Income tax (supra), on which reliance has been placed by learned counsel for petitioner would, in opinion of this court, have no applicability to facts of present case, inasmuch as, in facts of said case, assessee had filed application under section 245C before Settlement Commission disclosing amount of Rs.1,94,33,580/ for relevant assessment year in addition to income declared in return of income submitted by them earlier. During course of proceedings before Settlement Commission, assessee filed revised settlement application containing confidential annexures and related papers declaring therein additional income of Rs.11.41 crore. Thus, while in application under section 245C(1) of IT Act, disclosure was of Rs.1.94 crores, in revision application additional income of Rs.11.41 crore, which was approximately five times amount originally disclosed, came to be made. Besides, in that case, revised settlement application had been made and it is in backdrop of such facts and circumstances that Supreme Court held that full and true disclosure of income which had not been previously disclosed by assessee being precondition for valid application under section 245C(1) of Act. scheme of Chapter XIXA does not contemplate revision of income so disclosed in application against item 11 for form. court further held that if assessee is permitted to revise his disclosure, in essence, he would be making fresh application in relation to same case by withdrawing earlier application and that in this regard, section 245C(3) of Act which prohibits withdrawal of application once made under sub section (1) of said section is instructive inasmuch as it manifests that assessee cannot be permitted to resile from his stand at any stage during proceedings. 51. Adverting to facts of present case, as Page 9 of 18 Downloaded on : Tue Apr 21 10:43:55 IST 2020 C/SCA/2760/2020 ORDER noticed earlier, contesting respondents have not resiled from their stand in application made under section 245C of IT Act. contesting respondents have also not made any further disclosure during course of settlement proceedings but have only agreed to pay additional tax on basis of computation made by revenue in respect of disclosure made by them. 6.5) Referring to aforesaid decisions, it was submitted that in facts of present case, respondent assessee has offered and disclosed further amount of Rs. 12 Crore in addition to disclosed amount of Rs. 22.09 Crore so as to put end to controversy and in spirit of settlement before Commission. respondent has made overall additional disclosure of Rs. 12 Crore in all five years before Commission altogether. It was therefore, submitted that in view of aforesaid legal pronouncements and settled legal position, considering facts of case of respondent before Commission, decision of Apex Court in case of Ajmera Housing Corpn. (supra), cannot be made applicable to facts of present case. It was further submitted that Commission is convinced by item wise explanation submitted by respondent assessee in response to income of Rs. 113 Crore suggested by petitioner. It was therefore submitted that in view of decision of Apex Court in case of Jyotendrasinhji (supra), Commission is not required to give any reason, as Commission has acted in accordance with provisions of Act of 1961. He further submitted that as scope of inquiry is very limited, no interference is required to be made in impugned order passed by Commission. 7. Having considered submissions made by learned counsel for respective parties and order passed by Commission, only question which arises for consideration in facts of present case is that whether additional income disclosed to tune of Rs. 12 Crore by respondent assessee during course of proceedings before Commission can be said to be fresh and substantial disclosure or not and to come to conclusion that it is far greater than initial disclosure made by respondent assessee so as to apply decision of Apex Court in case of Ajmera Housing Corpn. (supra) and in case of Shree Nilkanth Page 10 of 18 Downloaded on : Tue Apr 21 10:43:55 IST 2020 C/SCA/2760/2020 ORDER Developers (supra) ? 8. In view of aforesaid observations made by Apex Court, this Court is required to examine and inquire as to whether order of Commission is contrary to any of provisions of Act or not and if so, apart from grounds of bias, fraud and malice which of course constitute separate and independent category, has it prejudiced petitioner or not. In facts of present case, merely because respondent assessee has disclosed additional income of Rs. 12 Crore during course of settlement, it cannot be said that Commission has not followed procedure prescribed under Act of 1961. 9. disclosure made during course of proceedings before Commission is not new disclosure as found by Apex Court in case of Ajmera Housing Corpn. (supra) as under : 26. procedure laid down in Section 245D of Act, contemplates that on receipt of application under Section 245C(1) of Act, Settlement Commission is required to forward copy of application filed in prescribed form (No. 34B), containing full details of issues for which application for settlement is made, nature and circumstances of case and complexities of investigation involved, save and except annexures, referred to in item No. 11 of form and to call for report from Commissioner. Commissioner is obliged to furnish such report within period of 45 days from date of communication by Settlement Commission. Thereafter, Settlement Commission, on basis of material contained in said report and having regard to facts and circumstances of case and/or complexity of investigation involved therein may by order, allow application to be proceeded with or reject application. After order under Section 245D(1) is made, by Settlement Commission, Rule 8 of 1987 Rules mandates that copy of annexure to application, together with copy of each of statements and other documents accompanying such annexure shall be forwarded to Commissioner and further report shall be called from Commissioner. Settlement Commission can also direct Page 11 of 18 Downloaded on : Tue Apr 21 10:43:55 IST 2020 C/SCA/2760/2020 ORDER Commissioner to make further enquiry and investigations in matter and furnish his report. Thereafter, after examining record, Commissioner's report and such further evidence that may be laid before it or obtained by it, Settlement Commission is required to pass order as it thinks fit on matter covered by application and in every matter relating to case not covered by application and referred to in report of Commissioner under sub section (1) or sub section (3) of said Section. It bears repetition that as per scheme of Chapter, in first instance, report of Commissioner is based on bare information furnished by assessee against item No. 10 of prescribed form, and material gathered by revenue by way of its own investigation. It is evident from language of Section 245C(1) of Act that report of Commissioner is primarily on nature of case and complexities of investigation, as annexure filed in support of disclosure of undisclosed income against item No. 11 of form and manner in which such income had been derived are treated as confidential and are not supplied to Commissioner. It is only after Settlement Commission has decided to proceed with application that copy of annexure to said application and other statements and documents accompanying such annexure, containing aforesaid information are required to be furnished to Commissioner. In our opinion even when Settlement Commission decides to proceed with application, it will not be denuded of its power to examine as to whether in his application under Section 245C(1) of Act, assessee has made full and true disclosure of his undisclosed income. We feel that report(s) of Commissioner and other documents coming on record at different stages of consideration of case, before or after Settlement Commission has decided to proceed with application would be most germane to determination of said question. It is plain from language of sub section (4) of Section 245D of Act that jurisdiction of Settlement Commission to pass such orders as it may think fit is confined to matters covered by application and it can extend only to such matters which are referred to in report of Commissioner under sub section (1) or sub section (3) of said Section. "full and true" disclosure of income, which had not been previously disclosed by assessee, being pre condition for valid Page 12 of 18 Downloaded on : Tue Apr 21 10:43:55 IST 2020 C/SCA/2760/2020 ORDER application under Section 245C(1) of Act, scheme of Chapter XIX does not contemplate revision of income so disclosed in application against item No. 11 of form. Moreover, if assessee is permitted to revise his disclosure, in essence, he would be making fresh application in relation to same case by withdrawing earlier application. In this regard, Section 245C(3) of Act which prohibits withdrawal of application once made under sub section (1) of said Section is instructive in as much as it manifests that assessee cannot be permitted to resile from his stand at any stage during proceedings. Therefore, by revising application, applicant would be achieving something indirectly what he cannot otherwise achieve directly and in process rendering provision of sub section (3) of Section 245C of Act otiose and meaningless. In our opinion, scheme of said Chapter is clear and admits no ambiguity. 27. It is trite law that taxing statute is to be construed strictly. In taxing Act one has to look merely at what is said in relevant provision. There is no presumption as to tax. Nothing is to be read in, nothing is to be implied. There is no room for any intendment. There is no equity about tax. (See: Cape Brandy Syndicate Vs. Inland Revenue Commissioners (1921) 1 KB 64 and Federation of A.P. Chambers of Commerce & Industry & Ors. Vs. State of A.P. (2001) 247 ITR 36 (SC) In interpreting taxing statute, Court must look squarely at words of statute and interpret them. Considerations of hardship, injustice and equity are entirely out of place in interpreting taxing statute. (Also see: Commissioner of Sales Tax, Uttar Pradesh Vs. Modi Sugar Mills Ltd. AIR 1961 SC 1047. 28. As afore stated, in scheme of Chapter XIX A, there is no stipulation for revision of application filed under Section 245C(1) of Act and thus natural corollary is that determination of income by Settlement Commission has necessarily to be with reference to income disclosed in application filed under said Section in prescribed form. 29. Having noticed scheme of Chapter XIX of Act, we shall now advert to facts at hand and evaluate rival submissions. 30. Before addressing other issues, at outset, we record our disapproval with view of High Page 13 of 18 Downloaded on : Tue Apr 21 10:43:55 IST 2020 C/SCA/2760/2020 ORDER Court that it would not be proper to set aside proceedings before Settlement Commission even though it was convinced that assessee had not made full and true disclosure of their income while making application under Section 245C of Act. As stated above, in its earlier order dated 28th July, 2000 while declaring order dated 17th November, 1994, as ab initio void and setting aside order dated 29th January, 1999, High Court had remitted case to Settlement Commission to decide entire matter afresh, including question of maintainability of application under Section 245C(1) of Act. said order of High Court was put in issue before this Court and was set aside vide order dated 11th July, 2006 and case was remanded back to High Court for fresh consideration. Nevertheless, all points raised by parties, including plea of revenue that application filed by assessee before Settlement Commission was not maintainable as assessee had not made full and true disclosure of their undisclosed income were kept open. High Court addressed itself on said issue and found that assessee had not made full and true disclosure of their income while making application under Section 245C(1) of Act, yet did not find it proper to set aside proceedings on that ground. Having recorded said adverse finding on very basic requirement of valid application under Section 245C(1) of Act, High Court's opinion that it would not be proper to set aside proceedings is clearly erroneous. High Court appears to have not appreciated object and scope of scheme of settlement under Chapter XIX of Act. At this juncture, it would be appropriate to notice few illuminating observations in W T Ramsay Ltd. Vs. Inland Revenue Commissioners (1981) 1 All ER 865, which was considered to be turning point in interpretation of tax laws in England and was significant departure from Inland Revenue Commissioners Vs. Duke of Westminster (1935) All ER Rep 259 dictum, noted in passage extracted below : "Given that document or transaction is genuine, court cannot go behind it to some supposed underlying substance. This is well known principle of Inland Revenue Comrs v Duke of Westminster [1936] AC 1, [1935] All ER Rep 259, 19 Tax Cas 490. This is cardinal principle but it must not be overstated or over extended. While obliging court to accept Page 14 of 18 Downloaded on : Tue Apr 21 10:43:55 IST 2020 C/SCA/2760/2020 ORDER documents or transactions, found to be genuine, as such, it does not compel court to look at document or transaction in blinkers, isolated from any context to which it properly belongs. If it can be seen that document or transaction was intended to have effect as part of nexus or series of transactions, or as ingredient of wider transaction intended as whole, there is nothing in doctrine to prevent it being so regarded; to do so is not to prefer form to substance, or substance to form. It is task of court to ascertain legal nature of any transactions to which it is sought to attach tax or tax consequence and if that emerges from series or combination of transactions, intended to operate as such, it is that series or combination which may be regarded." 31. We are convinced that, in instant case, disclosure of Rs.11.41 crores as additional undisclosed income in revised annexure, filed on 19th September, 1994 alone was sufficient to establish that application made by assessee on 30th September, 1993 under Section 245C(1) of Act could not be entertained as it did not contain "true and full" disclosure of their undisclosed income and "the manner" in which such income had been derived. However, we say nothing more on this aspect of matter as Commissioner, for reasons best known to him, has chosen not to challenge this part of impugned order. 32. We shall now deal with principal argument of learned counsel for assessee that High Court had failed to consider, in their correct perspective two reports submitted by Commissioner on 30th August, 1995 and 20th October, 1997, in as much as, in latter report Commissioner had himself computed undisclosed income at Rs. 42.52 crores, which was equivalent to amount finally determined by Settlement Commission. Therefore, according to learned counsel, there was no justification for remand of case back to Settlement Commission. At first blush, argument appears to be attractive but on deeper scrutiny, it does not merit acceptance. In impugned order, on critical examination of order passed by Settlement Commission with reference to said two reports, in particular reconciliation report submitted by Commissioner on 20th October, 1997, estimating undisclosed income at Rs. 187.20 crores, High Court had found that only that part of report Page 15 of 18 Downloaded on : Tue Apr 21 10:43:55 IST 2020 C/SCA/2760/2020 ORDER dated 20th October, 1997, which dealt with "on money" was highlighted before this Court, while other incomes, investments, receipts or payments were not covered in that part of statement. High Court also observed that manner in which expenses had been shown, created serious doubt about expenditure of Rs.734.02 lakhs. High Court has also noted that Settlement Commission had not properly dealt with amount of Rs.911.51 lakhs on account of unexplained expenses, loans and surplus amount of Rs.488.98 lakhs, while assessing total income and thus amount of Rs.14.49 crores had been left out while determining undisclosed income of assessee. Besides, High Court has also commented that having come to conclusion that penalty leviable worked out to be Rs. 562.87 lakhs, Settlement Commission had no reason for levying token penalty of Rs. 50 lakhs, which was not even 10% of minimum leviable penalty. Ultimately High Court observed that : (i) since Settlement Commission had not supplied annexure filed on 19th September, 1994, declaring additional income of Rs.11.41 crores, due opportunity had not been given to revenue to place its stand properly; (ii) huge amount of unexplained expenses, unexplained loans and unexplained surplus, total of which was more than Rs.14 crores, was not taken into consideration while passing final order and (iii) Settlement Commission had imposed token penalty of Rs.50 lakhs while on its own assessment leviable penalty would have been Rs.562.87 lakhs. Further, if amount which had not been taken into consideration while assessing total undisclosed income was to be taken into account, amount of leviable penalty would have been much more. In light of these facts, High Court formed opinion that it would be in interest of justice to set aside final order passed by Settlement Commission and to remand case back to it for fresh adjudication on assessee's application. Bearing in mind afore stated factual position, as emanating from material on record, we find it difficult to persuade ourselves to agree with learned counsel for assessee that there was no justification for order of remand by High Court and that order passed by Settlement Commission should have been affirmed. We are satisfied that under given scenario, High Court was correct in making order of remand and no good ground is made out for interference in exercise of our jurisdiction under Article 136 of Constitution. Page 16 of 18 Downloaded on : Tue Apr 21 10:43:55 IST 2020 C/SCA/2760/2020 ORDER 33. As regards argument of learned counsel for assessee that scope of judicial review being limited, High Court should not have interfered with order of Settlement Commission in exercise of its power under Article 226 of Constitution, in our opinion, argument is stated to be rejected. Having conceded before High Court that assessee was not pressing point of maintainability of writ petition before High Court, assessee cannot be now permitted to resile from its earlier stand and raise same issue before us. Even otherwise, as stated above, we have no hesitation in observing that manner in which assessee's disclosures of additional income at different stages of proceedings were entertained by Settlement Commission, rubbishing objection of Commissioner that assessee had not made full and true disclosure of their income in application under Section 245C(1) of Act, leaves much to be desired. 10. Thus facts before Apex Court were quite different than facts of present case as before Apex Court revised disclosure was made whereas in facts of present case, additional disclosure is made to tune of Rs. 12 Crore and therefore, judgments in case of Commissioner of Income tax I v. Income Tax Settlement Commission (supra) dated 12th July, 2016, Commissioner of Income tax I v. Income Tax Settlement Commission and anr. (supra) dated 2nd September, 2016, Principal Commissioner of Income tax, Central v. Income Tax Settlement Commission (supra) dated 13th June, 2017 and Principal Commissioner of Income Tax, Central v. Income Tax Settlement Commission (supra) dated 22nd October, 2019 would be applicable to facts of present case and as such no interference is called for while exercising jurisdiction under Article 226 of Constitution of India, more particularly, when Commission has arrived at conclusion that further additional income of Rs.12 Crore offered during section 245D(4) proceedings can be accepted with reference to income disclosed in settlement application. 11. On perusal of impugned order passed by Commission, it is apparent that application submitted by respondent has been dealt with as per provisions of section 245C and 245D of Act. Page 17 of 18 Downloaded on : Tue Apr 21 10:43:55 IST 2020 C/SCA/2760/2020 ORDER Commission has observed detailed procedure while exercising powers under section 245D(4) of Act of 1961 by examining thoroughly report submitted by petitioner under Rule 9 of Income Tax Settlement Commission (Procedure) Rules, 1997. Commission has also provided proper opportunity of hearing to respective parties and therefore amount which has been determined by Commission is just and proper. In view of aforesaid decisions cited by respondent, Commission was right in considering revised offer made by respondent during course of proceedings in nature of spirit of settlement. Therefore, decision of Apex Court in case of Ajmera Housing Corpn. (supra), would not come into operation in facts of case. We are therefore of opinion that order passed by Commission does not call for any interference. 6. In view of aforesaid dictum, when we compare disclosure made by assessee to tune of Rs.11,33,02,651/ in application filed before Settlement Commission and grievance made by writ applicant with regard to amount of Rs.2,04,88,560/ , same is very marginal as compared to disclosure made by assessee. Accordingly, when assessee had agreed for addition of Rs.1,02,44,280/ to put quietus to issue and to settle matter, no interference is called for in impugned order passed by Settlement Commission. petition, therefore, fails and is accordingly dismissed. (J. B. PARDIWALA, J) (BHARGAV D. KARIA, J) GIRISH Page 18 of 18 Downloaded on : Tue Apr 21 10:43:55 IST 2020 Principal Commissioner of Income-tax v. Akshat Shah