IN HIGH COURT OF JUDICATURE AT PATNA Civil Writ Jurisdiction Case No.11115 of 2009 1. Commissioner of Income Tax (Central), Central Revenue Building, Bir Chand Patel Path, Patna 2. Joint Commissioner/Additional Commissioner of Income Tax, Central Range-1, Patna 3. Deputy/Assistant Commissioner of Income Tax, Central Circle-1, Patna ... ... Petitioner/s Versus 1. Income Tax Settlement Commission (IT & WT) through Secretary, Income Tax Settlement Commission, Additional Bench, 10C Middleton Row, 2nd Floor, Kolkata-700071 2. Secretary Settlement Commission (IT & WT), Additional Bench, 10C Middleton Row, 2nd Floor, Kolkata-700071 3. Administrative Officer, Income Tax Settlement Commission (IT & WT), Middleton Row, Kolkata-700071 4. M/S Dadiji Steels Ltd., Narayani Plaza, Exhibition Road, Patna 5. Shiva Polytubes (P) Ltd., Narayani Plaza, Exhibition Road, Patna 6. Sri Binaya Kr. Singh, Panchwati, Nepathi Kothi, Boaring Road, Patna 7. Vijay Kr. Gupta, Durga Apartment, Mirchai Gali Chowk, Patna City, Patna- 800008 8. Smt. Sobha Gupta, Durga Apartment, Mirchai Gali Chowk, Patna City, Patna-800008 9. Vijay Kr. Gupta (Huf), Durga Apartment, Mirchai Gali Chowk, Patna City, Patna-800008 10. Binay Kr. Singh, R/O Sabalpur, Patna City, Patna-800009 11. Balaji Warehouse (P) Ltd., R/O Sabalpur, Patna City, Patna-800009 12. Pushpa Singh, R/O Sabalpur, Patna City, Patna-800009 13. Ramesh Chandra Gupta (Huf), R/O 502, Santosha Complex, Bandar Bagicha, Fraser Road, Patna-800001 14. Ramesh Chandra Gupta, R/O 502, Santosha Complex, Bandar Bagicha, Fraser Road, Patna-800001 15. Sri Sanchit Agarwal, R/O 502, Santosha Complex, Bandar Bagicha, Fraser Road, Patna-800001 16. Smt. Urmila Gupta, R/O 502, Santosha Complex, Bandar Bagicha, Fraser Road, Patna-800001 17. Neelkamal Steels (P) Ltd., Deedarganj, Sabalpur, Patna City, Patna - 800001 Respondent/s Patna High Court CWJC No.11115 of 2009 dt.06-10-2020 2/9 Appearance : For Petitioner/s : Mrs. Archana Sinha, Advocate For Respondent/s : Mr.S.D. Sanjay, Sr. Advocate CORAM: HONOURABLE CHIEF JUSTICE and HONOURABLE MR. JUSTICE S. KUMAR ORAL JUDGMENT (Per: HONOURABLE CHIEF JUSTICE) Date : 06-10-2020 Petitioners have prayed for following relief(s):- For issuance of appropriate writ/writs, direction/directions and order/orders on respondent on facts and circumstance of case after quashing order dated 31.03.2008 passed by Income Tax Settlement Commission (IT & WT), Kolkata, as contained herein in ANNEXURE-3, in settlement applications as contained in ANNEXURE- 1 herein, under section 245D (4) of Income Tax Act, 1961, (after order passed by this Hon ble Court on Settlement Commission, Respondent No: 1 herein to dispose of application by 31.03.08, as contained in Annexure 3 herein) whereby and where under after giving opportunity to petitioner no.1, Commissioner Income Tax (Central), Patna and applicants (therein before Settlement Commission) without examining record and investigating case. 2. object and purpose of introducing separate Chapter XIX-A, titled as settlement of cases , comprising of Sections 245A to 245M of Income-Tax Act, 1961 (hereinafter referred to as Act ) was inter alia to provide for mechanism for putting end, expeditiously, to alleged or suspected cases of evasion of tax by assessee. Equally, it was to enable taxpayer to Patna High Court CWJC No.11115 of 2009 dt.06-10-2020 3/9 truthfully come out clean and begin his relationship with department with clean slate. independent body termed as Settlement Commission was established, to act as umpire, neutral person. Act contemplated level playing field for both assessee as also Revenue. Chapter itself provides mechanism, enabling Revenue as also assessee to settle issues, be it of whatever nature and magnitude, pending before any Income-Tax Authority. 3. Settlement Commission is required to adhere to procedure prescribed thereunder. powers are immense, inter alia, calling for reports from Commissioner (the authorized representative of Revenue) as defined under Act; carry out inspection, etc. It also has power under Section 245H, to grant immunity from prosecution from imposition of penalty. 4. object sought to be achieved with legislation was to ensure finality and certainty, both in order and decision- making process. 5. Noticeably, members of Settlement Commission are senior-most officers of department, having sufficient experience, people with immense integrity and outstanding ability, apart from special knowledge and expertise in subject of direct taxes and business accounts. Patna High Court CWJC No.11115 of 2009 dt.06-10-2020 4/9 6. We are dealing with case where Revenue is trying to reopen one such settlement which took place under application submitted by assessees, so decided to vide impugned order dated 31.3.2008. Noticeably, application pertains to assessment years commencing from 2001-02 to 2007-08. 7. It is not case of Revenue that assessees did not furnish true and correct particulars as required under law, i.e., Chapter XIX-A of Act. challenge laid in present petition, so filed on 24.8.2009, which came about after period of more than one year of passing of impugned order, is only on account of single observation made in order, It is not practicable for Commission to examine records and investigate cases for proper settlement . 8. We have gone through records as placed before us. Noticeably Settlement Commission itself records report from Commission was called and responded to, being part of record. We also notice that amount disclosed by assessees is not small. In instant case, assessees had come forward disclosing additional income of Rs.2,44,77,000/-, which was almost 100 times more than what stood initially declared in returns filed. Patna High Court CWJC No.11115 of 2009 dt.06-10-2020 5/9 9. Therefore, in our considered opinion, only inference drawn from impugned statement of Settlement Commissioner was that it was not practicable for Commission to examine records further and investigate case, as objective of application stood achieved. 10. If Settlement Commissioner had all records before him, Revenue had duly made its representation, and Settlement Commission had thereinafter accepted settlement, to us only way of reading impugned sentence is that matter was straightforward on face of record. It is also not disputed before us that Settlement Commission necessarily was required to pass orders before 31.3.2008, else proceedings would have abated. Revenue has not pointed any finger of misconduct against any one of members of Settlement Commission. 11. Even before us, integrity and ability of members of Settlement Commission are not in doubt. In this background, can isolated sentence, purportedly crept into order, be allowed to defeat object and purpose sought to be achieved with enactment in question? 12. We clarify that impugned order stood passed in presence of Revenue and none objected to same. As per assessees, of which we do not express any opinion, stand taken Patna High Court CWJC No.11115 of 2009 dt.06-10-2020 6/9 is highly immoral for Authorities to file instant petition even though enhancement is to extent of 100 per cent. And amount deposited in terms thereof was accepted without any protest or demur. All this is for Settlement Commission to examine if need so arises. 13. Mrs. Archana Sinha, learned counsel for petitioners, under instructions, states that Settlement Commission was under no option but to arrive at settlement, for it had to dispose of more than 200 cases in one day, to which Mr. S.D.Sanjay, learned Senior Counsel for respondents, responds that settlement was just, fair and proper and in interest of Revenue, else proceedings would have abated. settlement was mutually beneficial and acceptable. money stood accepted without any protest or demur. As such, at belated stage in year 2020, more so, after period of one year from settlement, Revenue cannot be allowed to raise pleas, technical in nature, particularly when matter stood conclusively decided and concluded even at end of Revenue. Further, with mere change of Revenue Officer, opinion cannot be allowed to change. 14. Given aforesaid, we need not advert to other submissions made by Ms. Archana Sinha, inviting our attention to decisions rendered by Hon'ble Apex Court in Ajmera Housing Patna High Court CWJC No.11115 of 2009 dt.06-10-2020 7/9 Corporation and another Versus Commissioner of Income Tax (2010) 8 SCC 739, Union of India v. Star Television News Ltd. [2015] 373 ITR 528 (SC) and High Court of Rajasthan in Commissioner of Income Tax Central Jaipur vs. M/s Anil Hastkala (p) Ltd. & Anr (2010) 329 ITR 41; Commissioner of Income Tax Versus Hari Kishan Vijayvergia and another, (2011) 336 ITR 174. More so, when our attention is invited to fact that now as policy matter, Revenue is not to prolong litigations but bring finality, particularly when amount of Revenue involved is not more than two crores. 15. We also must keep in mind words of Hon ble Apex Court in Ritesh Tiwari and Anr v. State of Utter Pradesh and Ors (2010) 10 SCC 677, reiterating that writ jurisdiction is equitable and discretionary remedy which must be exercised keeping in mind facts in each individual case, and advancement of justice as its objective: 26. power under Article 226 of Constitution is discretionary and supervisory in nature. It is not issued merely because it is lawful to do so. extraordinary power in writ jurisdiction does not exist to set right mere errors of law which do not occasion any substantial injustice. writ can be issued only in case of grave miscarriage of justice or where there has been flagrant violation of law. writ court has not only to Patna High Court CWJC No.11115 of 2009 dt.06-10-2020 8/9 protect person from being subjected to violation of law but also to advance justice and not to thwart it. Constitution does not place any fetter on power of extraordinary jurisdiction but leaves it to discretion of court. However, being that power is discretionary, court has to balance competing interests, keeping in mind that interests of justice and public interest are coalesce generally. court of equity, when exercising its equitable jurisdiction must act so as to prevent perpetration of legal fraud and promote good faith and equity. order in equity is one which is equitable to all parties concerned. Petition can be entertained only after being fully satisfied about factual statements and not in casual and cavalier manner. (Vide Champalal Binani v. Commissioner of Income Tax, West Bengal (1971) 3SCC 20; Chimajirao Kanhojirao Shrike v. Oriental Fire and General Insurance Co. Ltd. (2000)6 SCC 622; LIC of India v. Smt. Asha Goel (2001) 2 SCC160; State Financial Corporation v. Jagdamba Oil Mills (2002) 3 SCC 496; Chandra Singh v. State of Rajasthan (2003) 6 SCC545; and Punjab Roadways, Moga through its General Manager v. Punja Sahib Bus and Transport Co. (2010) 5 SCC 235). 16. No other submission was made on behalf of either of parties. 17. For all reasons aforesaid, petition stands disposed of. Patna High Court CWJC No.11115 of 2009 dt.06-10-2020 9/9 18. Interlocutory application, if any, shall also stand disposed of. (Sanjay Karol, CJ) ( S. Kumar, J) K.C.Jha/- AFR/NAFR CAV DATE Uploading Date 11.10.2020 Transmission Date Commissioner of Income-tax (Central), Patna / Joint Commissioner/Additional Commissioner of Income-tax, Central Range-1, Patna /Deputy/Assistant Commissioner of Income-tax, Central Circle-1, Patna v. IT Settlement Commision (IT & WT)/The Secretary Se