Case Note & Summary
The Income Tax Department filed writ petitions challenging an order dated 31.5.2016 passed by the Income Tax Settlement Commission, insofar as it related to directions declaring the assessee's settlement application as invalid under Section 245D(2C) of the Income Tax Act, 1961. The assessee had applied for settlement for assessment years 2008-09 to 2013-14. In some assessment years, the assessee did not disclose any additional income. The Settlement Commission, by order dated 29.1.2015 under Section 245D(2C), allowed the application to proceed, observing that the department's objection regarding non-disclosure was not supported by any evidence. The department challenged this order. The High Court, after hearing the parties, dismissed the petitions, holding that the Settlement Commission had correctly considered the objection and found no evidence to support it. The court noted that the order under Section 245D(2C) is final and cannot be reopened. The court upheld the Commission's decision, emphasizing that the burden of proof lies on the department to show non-disclosure. The petitions were dismissed.
Headnote
A) Income Tax - Settlement Commission - Section 245D(2C) of Income Tax Act, 1961 - Validity of Settlement Application - The department challenged the Settlement Commission's order allowing the assessee's application to proceed, arguing that the assessee failed to disclose true and full income. The court held that the Settlement Commission had considered the department's objection and found no evidence to support it. The order under Section 245D(2C) is final and cannot be reopened. (Paras 1-3)
B) Income Tax - Settlement Commission - Burden of Proof - Section 245D(2C) of Income Tax Act, 1961 - The department raised an objection that the assessee did not disclose additional income. The Settlement Commission noted that the department did not adduce any evidence or justification. The court upheld the Commission's finding, emphasizing that the burden lies on the department to substantiate its objection. (Para 3)
Issue of Consideration
Whether the Income Tax Settlement Commission erred in allowing the assessee's settlement application to proceed under Section 245D(2C) of the Income Tax Act, 1961, despite the assessee not disclosing additional income in some assessment years, and whether the department's objection regarding non-disclosure was properly considered.
Final Decision
The High Court dismissed the writ petitions, upholding the Settlement Commission's order under Section 245D(2C) allowing the settlement application to proceed.
Law Points
- Settlement Commission's power to allow application to proceed under Section 245D(2C)
- Requirement of full and true disclosure
- Burden of proof on department to show non-disclosure
- Finality of Settlement Commission's order under Section 245D(2C)
Case Details
2019 LawText (BOM) (02) 24
WRIT PETITION NO. 5997 OF 2017 WITH WRIT PETITION NO. 2321 OF 2017, WRIT PETITION NO. 3351 OF 2017, WRIT PETITION NO. 3509 OF 2017, WRIT PETITION NO. 5752 OF 2017
Akil Kureshi, M.S. Sanklecha
Charanjeet Chanderpal a/w Ms. Pragya Chandra for the Petitioner, Mr. Jehangir Mistri, Sr. Counsel a/w Mr. Madhur Agrawal i/by Atul Jasani for the Respondents
Pr. Commissioner of Income Tax (Central), Pune
Income Tax Settlement Commission, Addl. Bench - I, Mumbai & Anr.
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Nature of Litigation
Writ petitions filed by the Income Tax Department challenging an order of the Income Tax Settlement Commission under Section 245D(2C) of the Income Tax Act, 1961.
Remedy Sought
The Department sought to challenge the Settlement Commission's order allowing the assessee's settlement application to proceed, and to have the application declared invalid.
Filing Reason
The Department alleged that the assessee failed to disclose true and full income in its settlement application for certain assessment years.
Previous Decisions
The Settlement Commission passed an order on 29.1.2015 under Section 245D(2C) allowing the application to proceed, observing that the department's objection was not supported by evidence.
Issues
Whether the Settlement Commission erred in allowing the settlement application to proceed under Section 245D(2C) despite the assessee not disclosing additional income in some assessment years.
Whether the department's objection regarding non-disclosure was properly considered by the Settlement Commission.
Submissions/Arguments
The Department argued that the assessee failed to disclose true and full income, and the Settlement Commission should have declared the application invalid.
The assessee contended that the Settlement Commission had correctly considered the objection and found no evidence to support it.
Ratio Decidendi
The Settlement Commission's order under Section 245D(2C) is final and cannot be reopened. The burden of proof lies on the department to show non-disclosure, and in the absence of evidence, the Commission's decision to allow the application to proceed is valid.
Judgment Excerpts
After perusal of the above 5 cases, we finally hold that the objection raised by the department was only on applicant's failure to disclose true and full income. In support of this contention, the department had not adduced any evidences or justification.
Procedural History
The assessee applied for settlement under Section 245C for assessment years 2008-09 to 2013-14. The Settlement Commission passed an order under Section 245D(2C) on 29.1.2015 allowing the application to proceed. The Department filed writ petitions challenging this order. The High Court heard the petitions and dismissed them on 28.2.2019.
Acts & Sections
- Income Tax Act, 1961: 245C, 245D, 245D(2C)
