Madras High Court
M/S.Lion Dates Impex (P) Ltd vs The Chairman on 3 September, 2021
W.P. No.36950 of 2016
and
W.M.P.Nos.31747 & 31748 of 2016
IN THE HIGH COURT OF JUDICATURE AT MADRAS
Dated: 03.09.2021
CORAM:
THE HON'BLE MR. JUSTICE S.M.SUBRAMANIAM
W.P. No.36950 of 2016
and
W.M.P.Nos.31747 & 31748 of 2016
M/s.Lion Dates Impex (P) Ltd.,
No.4, Sterling Road, Nungambakkam,
Chennai – 600 034,
Rep.by its Managing Director P.Ponnudurai
.. Petitioner
Vs
1.The Chairman,
Income Tax Settlement Commission,
Principal Bench, New Delhi.
2.Income Tax Settlement Commission,
Additional Bench, 640, Anna Salai,
Chennai – 35.
3.Principal Commissioner of Income Tax,
Central – II, Chennai – 600 034.
4.The Assistant Commissioner of Income Tax (AO),
Central Circle-I, Trichy. .. Respondents
PRAYER: This Writ Petition is filed under Article 226 of the
Constitution of India, praying to issue a writ of Certiorarified Mandamus
calling for the records relating to the order of the 2nd respondent made in
Settlement Application Nos.TN/CN52/2014-15/57/IT dated 30.09.2016
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and quash the same and consequently direct the 1st respondent to
constitute a Special Bench under Section 245BA (5) of Income Tax Act,
1961 to hear the petitioner's Settlement Application dated 02.03.2015
uninfluenced by the findings of the impugned order of the 2nd respondent
dated 30.09.2016 and forbearing the 4th respondent from proceeding
further with Assessment Proceedings in pursuance to the Assessment
Notices dated 03.10.2016, 05.10.2016 & 06.10.2016 issued under
Section 142 (1) of r/w Section 129 of Income Tax Act, 1961 in respect of
the petitioner's assessment for Assessment Years 2007-08 to 2014-15.
For Petitioner : Mr.Palani Selvaraj
for Mr.R.G.Narendhiran
For Respondents : Mr.A.P.Srinivas
Senior Standing Counsel for IT
ORDER
The lis on hand is instituted challenging the order passed by
the Income Tax Settlement Commission on 30.09.2016 and further relief
is sought for forbearing the fourth respondent from proceeding with the
Assessment proceedings.
2.The petitioner is a company engaged in the business of
purchase and sales of dates, oats and honey and the manufacture of
syrups, jams and squash. The petitioner’s brand ‘Lion’ is well known
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brand in the retail dates market in India. The main business of the
petitioner is of dealing in dates, which are mainly imported from Middle
East, largely from Oman, while purchases are also made from the
Mumbai market. The imported dates are stored in cold storage
immediately at the receiving station. After clearing, they are transported
to the processing and manufacturing units at various places for cleaning,
sorting, deseeding and packing. The packed dates are stored and
delivered to the various centers in the country for supply to the market.
The factory and processing units of the petitioner are situated at various
places. The petitioner claims that from April 2011, the petitioner has
started manufacture of dates, syrups and jams at its dedicated
international standards unit situated at Ward-A, Block 6, T.S.No.21,
Kallanai Road, Devadanam Village, Trichy Taluk, and more than
thousand workers are employed for these purposes.
3.The learned counsel appearing on behalf of the petitioner
contended that the Income Tax Settlement Commission rejected the
application filed by the petitioner under Section 245C of the Income Tax
Act, as not maintainable and thus, the petitioner is constrained to move
the present Writ Petition.
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4.It is contended that the petitioner was not provided with an
opportunity to defend their case on several stages and therefore, the
impugned order is in violation of the principles of natural justice. The
petitioner raised a ground of bias in this Writ Petition. However, such an
official bias was not raised before the Settlement Commission. The
petitioner states that the Settlement Commission has violated the circular
issued by the CBDT on the Revenue. Despite the fact that the said
circular is binding, valuation of assets and buildings estimated by the
petitioner has not taken into consideration by the Settlement
Commission, even after filing of additional documents before the
Commission. The deliberation made by the Settlement Commission with
reference to Section 80IB of the Income Tax Act was also improper. For
all these reasons, the impugned order passed by the Settlement
Commission is liable to be set aside.
5.The learned counsel for the petitioner drawn the attention
of this Court with reference to the disputed facts which all are raised
between the parties. One hand, it is submitted that the petitioner has filed
an application with true and full disclosure of Income and further
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submitted application declaring additional income. The petitioner
clarified the doubts raised by the Settlement Commission and
participated in the adjudicatory process. Inspite of the co-operation
extended by the petitioner, the Settlement Commission, rejected the
applications as not maintainable, on the ground that the petitioner has not
disclosed all the material facts fully and truly in order to substantiate and
the petitioner has stated that the details regarding the investments, profits
and loss and other Books of Accounts were submitted before the Income
Tax Settlement Commission.
6.It is contended that the Director General of Income Tax
(Investigation), took charge as Vice-Chairman subsequent to the search
conducted in the premises on 17.07.2013. Thus, the subsequent
proceedings based on the search operations were initiated within the
knowledge of the Vice-Chairman of the Income Tax Settlement
Commission and the Administrative circulars and directions were also
made with his knowledge. Thus, there was an official bias and on that
ground also the impugned order is liable to be set aside. In order to
establish the ground regarding violation of principles of natural justice,
the petitioner has stated that the last report was submitted on 29.09.2016
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after filing of written submission by the petitioner and therefore, he has
not provided further opportunity to make his submissions on the said
Report. The CBDT Circular dated 18.12.2014 in relation to admissions
of undisclosed Income under coercion/pressure during search/survey, the
Board issued guidelines and directed to convey that any instance of
undue influence/coercion in the recording of the statement during
search/survey/other proceedings under IT Act, 1961 and / or recording a
disclosure of undisclosed income under pressure/coercion shall be
viewed by the Board adversely. The said circular has not been followed
scrupulously by the Authorities Competent. The petitioner filed an
application under Section 245C before the Commission. Subsequent to
the search conducted in the premises, the petitioner approached the
Settlement Commission with an intention to settle the issues. He made
full and true disclosure in respect of the materials and inspite of that the
application was rejected as not maintainable.
7.The learned counsel for the petitioner has stated that dates
and date syrup are not different products is purely a legal issue could be
decided by the Courts. In this regard, the petitioner has stated that they
have not involved in any manufacturing process and they have imported
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initially the dates syrup and packed the syrup and supplied in the retail
market. Therefore, the findings with reference to Section 80IB made by
the respondent are not in consonance with the provisions of the Income
Tax Act. The facts, in this regard has established by the petitioner were
not considered. The petitioner purchased the equipments for producing
dates, syrup and jam with an investment of Rs.2.84 Crores. Subsequently,
the old unit using conventional process was dismantled and the new unit
was brought into existence in March, 2011 when trial production was
started after pertaining central excise registration on 14.03.2011.
Therefore, these facts established through documents were not
considered by the Settlement Commission and the application was
rejected merely on the ground that the petitioner has not disclosed the
material facts fully and truly.
8.The learned Senior Standing Counsel objected the
contentions raised on behalf of the petitioner by stating that the powers
of the Settlement Commission and the scope of settling the issues
between the assessee and the Department are clearly enumerated under
the provisions of the Income Tax Act. Once the settlement Commission
could able to arrive a conclusion that the assessee has not disclosed all
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material facts fully and truly, then a petition for settlement under Section
247 (1) of the Income Tax Act is not maintainable at all. The findings in
this regard made in the impugned order would reveal that the petitioner
has not only suppressed certain facts but not produced all the materials
truly and fully. Whenever, the Department confronted with the assessee,
he made declaration in piecemeal and therefore, the Settlement
Commission arrived a conclusion that the issues cannot be settled and
accordingly, rejected the application as not maintainable. Thus, there is
no infirmity as such in respect of the order passed by the Settlement
Commission.
9.Considering the arguments as advanced by the respective
learned counsel appearing on behalf of the parties to the lis, this Court is
of the considered opinion that the provision for settlement is an enabling
provision to settle the dispute between the parties. Therefore, law
expects that the parties, who are approaching the Settlement Commission
by way of application, must disclose full and true income in the event of
any difference or confrontation in this regard such an application for
settlement cannot be entertained. Contrarily, the Assessing Officer must
be permitted to make regular assessment of income under Section 153A
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of the Act. It is further contended that the differential amount of income
is crossing Rs.25 Crores and all these facts were placed before the
Settlement Commission by the Department. In this regard, it is
contended that the Settlement Commission has committed an error in
adopting the decision making process, as the process adopted is totally in
contravention to the facts and circumstances established by the
Department and further, such facts and circumstances are not correlating
with the application filed by the assessee under Section 245C of the Act.
When there are discrepancies and doubt arises with regard to the true and
full disclosure of income, then the natural course of action would be that
the Assessing Officer must be permitted to make a regular assessment
under Section 153A of the Act and settlement cannot be arrived under
doubtful circumstances. In such circumstances, settlements are
impermissible and cannot be construed as settlement at all.
10. The very concept of settlement is depending on the
mutual consensus and in the absence of element of mutual consensus
between the parties, the settlement by the Settlement Commission cannot
be unilateral and in such an event, Settlement Commission is usurping
the powers of the Assessing Officer under other provisions of the Act. In
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other words, every authority under the Income Tax Act, 1961 is expected
to exercise the powers as contemplated.
11. The question of exercise of excessive powers or
jurisdiction would arise, if the authority made an attempt to travel beyond
the scope of the provision under which, such powers are conferred to a
particular authority. In the instant case, the power of the Settlement
Commission is well enumerated under Section 245C and 245D of the
Act. The manner in which settlement is to be arrived is also
contemplated under the Act. Certain pre-conditions are also stipulated.
Thus, the Settlement Commission cannot enter into the venture of
assessment, which is the power of an Assessing Officer under Section
153A of the Act. Therefore, this Court is of an opinion that in the
absence of any true and full disclosure, the Settlement Commission
cannot go beyond the scope of Section 245C of the Act and adjudicate
the additional income found by the Department during seizure, which is
admittedly not disclosed in the application filed at the first instance by
the assessee.
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12.It is not in dispute that for entertaining an application for
settlement under Section 245C of the Income Tax Act, the assessee must
disclose true and full income enabling the Commission to settle the
issues. If any non-disclosure is identified during the course of
proceedings, that itself is sufficient to reject the application as not
maintainable. The Commission is not empowered to proceed further as in
the event of identifying non-disclosure of income, since the Assessing
Officer is the Authority to proceed with reassessment. In the present
case, action has been initiated under Section 147 & 148 of the Act.
13.Therefore, this Court has to primarily find out whether
the application filed by the petitioner under Section 147 (C) of the Act is
entertainable or not with reference to the conditions stipulated in the
provision itself. Once it is found that the application is entertainable then
alone the question of adjudication of further merits would arise.
Therefore, other grounds raised on merits are to be considered only if the
application before the Settlement Commission is maintainable.
14.In this regard, it is relevant to consider the findings of the
Settlement Commission in its order and the Settlement Commission
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considered the following issues, which reads as under:
“6.0. In the SOF, the Applicant has made the following
prayers:
a) To settle the total income offered in respect of Ays 2007 –
08 to 2014 – 15 on the basis of the disclosures made and to
determine the consequential tax and interest chargeable
thereon under the Income Tax Act, 1961.
b) To allow the telescoping and capitalization of the income
offered.
c) To grant waiver of interest leviable under the Income Tax
Act, 1961.
d) To grant waiver of penalty under the I.T.Act in terms of
section 245H.
e) To grant immunity from prosecution in terms of section
245H.”
7.1. Serious issues cropped up in this case. The main
issue that arose for consideration is whether the methodology
adopted by the applicant to disclose income in the application
is correct or not. Claim of 80IB deduction is another bone of
contention Additional claim of depreciation on account of
capitalisation, based on self-serving valuation reports was
another major problem. Applicant stated that for two A.Ys
2012-13 and 2013-14 the returns are to be accepted in 115JB
without any alteration in view of the judgment of the apex
court in the case of Apollo Tyres. Adding back of
depreciation or adding back unexplained investment etc. are
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difficult. These issues are discussed below and findings given
as to the fact whether the fact whether the applicant disclosed
full and true income or not.
7.2.The applicant commenced his business in the year
2000. It was processing and selling dates: According to
para 3 of the application, after cleaning deseeding and
packing the product was stored and marketed. The applicant
is involved in the business of processing, preservation and
packaging of dates (fruit). It has also cold storage facility.
According to the seized material enclosed to the AO's report
dated 19.09.2016 it was involved in FYs 2007-08 & 2008-09
in syrup production. These documents are enclosed in pages
70 to 79 of this order. It has also disclosed the expenditure
under the head Machinery Maintenance in syrup unit in these
two Asst years. This is seen as per the seized material. The
applicant admits that it was involved in syrup production
earlier but it was discontinued in the intervening two years
and again started from March 2011.
The applicant claimed nearly Rs.55 Crores of Sec.80IB(11A)
deduction for the AYs.2012-13, 2013-14 and 2014-15. The
Department objected to this claim. Detailed report of the AO
was enclosed by the C.I.T.
Sec.80IB(11A) reads as follows:
Section 80IB(11A):
[(11A) The amount of deduction in a case of [an
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undertaking deriving profit from the business of processing,
preservation and packaging of fruits or vegetables or [meat
and meat products or poultry or marine or dairy products or]
from] the integrated business of handling, storage and
transportation of foodgrains, shall be hundred per cent of the
profits and gains derived from such undertaking for five
assessment years beginning with the initial assessment year
and thereafter, twenty-five per cent (or thirty per cent where
the assessee is a company) of the profits and gains derived
from the operation of such business in a manner that the total
period of deduction does not exceed ten consecutive
assessment years and subject to fulfilment of the condition
that it begins to operate such business on or after the 1st day
of April, 2001;]
[Provided that the provisions of this section shall not apply to
an undertaking engaged in the business of processing,
preservation and packaging of meat or meat products or
poultry or marine or dairy products if it begins to operate
such business before the 1st day of April, 2009.]”
7.3.According to Sec.80IC(11A) once an assessee in
involved in the processing preservation and packaging of
fruits or vegetables, he can claim deduction u/s 80IB. The AR
pointed out that with respect to processing of dates, the
applicant was involved in the business from 2001 onwards
and with respect to processing of dates and syrup production,
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the applicant was involved in business from FY 2007-08 (AY
2008-09) to the extent evidence is available. It may be that
even earlier, the applicant was involved in import and
packaging of syrup. Thus the claim that new unit was started
only in FY 2011-12 (AY 2012-13) is not factually correct.
7.9.1.There is no separate unit that has been started in
the A.Yr.2012-13 to make any claim. It is only one or two
other machinery that was added. In fact, production of syrup
was shown in the profit and loss account for the A.Yr.2008-
2009 & 2009-2010 itself. Even the maintenance on the
machinery relating to syrup unit, expenditure was claimed in
the profit and loss account. Thus, according to the CIT, the
unit was started long back and business activities were
continued since several years because processing and
packing was involved. Hence, this cannot be the first year or
initial year. Moreover, there was a lull or stoppage of
activity in the A.Yr. 2010-11 & 2011-12 and again in the
month of March, 2011, there was production. The A.R states
it was trial production. The applicant's claims that only
imported syrup was available as on 01.04.2011 is
correct/false. In the order sheet noting as per the paper book
of CIT dt. 29.09.2015 at page-13, it is admitted by the
applicant that stock was produced in the month March, 2011.
Hence, even in the past years i.e.-A.Y2011-2012 and earlier,
there was production from out of the machinery in the
factory. Moreover, imported syrup was being processed and
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packaged and sold for the past five years. According to the
Section, the commencement of the production is not the
criteria but is is the commencement of business that is the
criteria. The business was already being carried on since few
years and this cannot be denied. The unit was in existence
and the addition of new machinery of Rs.2.8 crores cannot be
said to form a new unit.
7.9.2.It appears that the applicant while filing the
Excise returns under the new amended provisions thought of
this idea to claim 80IB deduction under I.T.Act. This is not
sufficient in order to claim 80IB deduction. The applicant
itself pointed out the amended provisions in the Exice Act
according to which even on the packaged products excise
duty was to be paid. This is referred above. IT is admitted
that there is no raw materials/production register except for
the excise record.
7.9.5.No additional staff were employed and there was
no additional registration for the purposes of EPF/ESI etc. It
is the same staff that were continued in the same premise
Depreciation of building is not identified and separately
debited to Sec. 80IB unit as against other unit. According to
CIT vs Essar Bulk Carriers, 238 ITR 186 (Mad), separate
trading profit and loss account and balance sheet has to be
filed for the purpose of Sec.80IB units. Once this is not
complied with the applicant is not eligible for this claim.
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7.9.6.When this was all pointed out by the CIT, the
applicant filed a fresh paper book calling back depreciation
and adding back certain other expenditures as taxable. The
following is the additional income offered as per the latest
APB filed on 29.09.2016 which is enclosed in pages 80 to 94
of this order claim of deduction u/s.80IB on that portion
Depreciation syrup machinery, wrongly claimed against
taxable income now offered:
A.Y. 2012-13. - Rs.39,09,583
A.Y. 2013-14. - Rs.33,23,146
A.Y. 2014-15. - Rs.28,24,674
**Depreciation of Rs.24,31,944 /- was also added back
in AY 2011-12 on syrup unit.
Additional income offered on account of disallowance
of expenses allocated to 80IB Unit;
A.Y. 2012-13 - Rs.5,45,00,000
A.Y. 2013-14 - Rs.3,60,00,000
A.Y. 2014-15 - Rs.3,02,00,000
7.9.7.The applicant, when pointed out the defects in
accounts and also the fact that around 54% of net profit was
declared in the 80IB unit as against 12% int eh regular
business which was abnormal, sought to correct the claims
made. Fundamentally, the department objects to this type of
apportionment and it stated that separate books of account
ought to have been maintained. It is only on the last day of
hearing just one day before the time barring date that such
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huge additional income is sought to be disclosed. According
to the section 80IB(11A) and rule 18BBB, the return shall be
accompanied by the Profit and Loss Account and Balance
Sheet of the undertaking or enterprise as if the undertaking or
the enterprise were a distinct entity. It is clearly seen that in
the case of the applicant this condition is not fulfilled. The
adhoc apportionment made is not acceptable. Moreover, the
unit is not a new unit. Just because there is a change in
Excise law the applicant cannot change its mind and claim
this benefit. There was production even in the earlier years
and there was business of processing and packaging of dates
and also syrup even in the earlier years. For once of the
years, the return is filed belatedly and as per the judgment of
the Supreme Court referred to by the AR this Commission has
no power to take action u/s. 119 Sec 80AC is applicable.
7.9.8.Thus it is clearly seen that on account of 80IB
deduction, figures that were submitted are being altered after
the department pointed out the same. In all, the applicant
withdrew Rs.12.07 crores for the 3A.Ys and disclosed it as
additional income on account of withdrawal of deduction
u/s.80IB to that extent. Thus on the same facts, additional
income is disclosed now before the Commissioner at the last
stage when confronted by the department. The Department
cited the case of Major Metals Limited vs. Union of India 19
Taxmann.Com 176(Bombay) to state that penalty ought to be
levied since the applicant is making disclosure in instalments.
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7.9.10.Above all, it was clearly pointed out to the
applicant that u/s. 80IB benefit can be claimed only when the
output was fruit or vegetable and no other product. When
this was point out, the AR admitted on 26.09.2016 that Sec.
80IB (3) is only applicable and not Sec. 80A(11A). He
requested that relief be given u/s. 80IB(3). The production of
syrup or jam amounts to a different product though there is
processing involved. Sec. 80IB(3) is no longer in operation.
However, in the hearing on 29.09.2016 he stated that in view
of Advance Ruling in the case of M/s. Delna Rustom 380 ITR
455 they are eligible for the benefit. The CIT (DR) pointed
out that Advance Ruling is not binding on the Department.
CIT(DR) referred to the decision in the following case laws:
(i) Decision of Bombay ITAT(J) Bench in the case of ITO-
19(3)4 Vs. Shri Shankar K. Bhanage in 3216 & 3217 /
Mumbai/2010.
(ii) Decision of Madras ITAT(D) Bench in the case of M/s.
Aseptic Fruit Products (India) P. Ltd vs ACIT, Circle (1)
dated 30.09.2015 in ITA No. 1136/MDS/2015.
7.9.11.We have given our anxious consideration to this
aspect. Whenever there is manufacture / production of article
or thing the deduction to be claimed only u/s. 80IB(3). This
section is no longer in vogue on account of time limit. It was
a conscious decision of the legislature to stop the benefit of
Sec. 80IB(3) as it was not extended. A reading of Sec.
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80IB(11A) shows that only when processing preservation and
packaging of fruits or vegetables are done, the benefit can be
claimed. All three activities are to be arrived out and the
ultimate product should be fruits or vegetables and not any
other product. To this extent, event in terms of language of
this section, the applicant is not eligible.
7.9.12.The Settlement Commission can settle matters
involving dispute of facts. It cannot lay down principles of
law. It is only the High Courts and Supreme Court that are
vested with the power of laying down principles of law.
Hence, there is difficulty.
7.9.13.Above all, on the basis of findings that, there is
no new unit as claimed by the applicant, no separate books of
accounts were maintained, no profit and loss account and
balance sheets were filed, basic registers such as raw
materials / production were not maintained, expenditure were
incurred in common with other business activities,
depreciation etc. were also not strictly ascertainable and
hence the claim of Sec. 80IB(11A) is not valid. There is no
case made out to claim deduction u/s. 80IB for all the years.
On he belated return no benefit can be extended to the
applicant. It is also to be noted that this business activity was
commenced long back i.e. in the year 2001 or 2002 according
to AR. The applicant was involved in processing and
packaging of dates and also packaging of imported syrup.
Addition made of just Rs. 2.8 crores on account of machinery
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out of total machinery of Rs. 7,36,55,743/- cannot be the
basis to claim that new unit has been started from 10 CCB
shows only machinery of Rs. 1 Crore is used in this unit
whereas AR claimed over Rs. 3 Crores of machinery is
involved.
7.9.14.One more abnormality is that the profit with
respect to Sec. 80IB unit is disclosed at 54% or so whereas in
the regular activity it is of the order of 12%. This was
starting point for investigation. The applicant itself admitted
the mistakes / incorrect claims and filed revised computation
on 29.09.2016 just one day before the case gets time barred
u/s. 245D(4).
7.9.15.The Department also pointed out that disclosure
of additional income of Rs. 26,89,65,826/- in the last hearing
would amount to substantive disclosure of additional income
after the Department has pointed out that this amounts to
concealment. Accordingly, the case of Major Metals would
apply.
7.9.16.In view of this, it is clearly seen that the claim
u/s. 80IB is not tenable in law as well as on facts. The
applicant’s disclosure of additional income to the extent of
Rs. 12 Crores on this account is a result of the detection by
the Department and is not voluntary. The disclosure made in
this regard in the application is to be held as not full and
true. The applicant is once again relying its own asset
method and valuation report and continues to claim that Rs.
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21.66 crores of undisclosed income as invested in depreciable
building (fresh construction activity) for which there is no
evidence in the seized material. Once again, it is to be seen
that the disclosure cannot be considered as full and true
because this is not substantiated.
9.5.The valuation reports are not reliable. According
to Hon’ble High Court of Delhi in the case of Agson Global
(P) Ltd. Vs. ITSC, the powers to refer to 142(2A) order is not
available to the Settlement Commission. Hence reference
cannot be made to Valuation Cell also. When the department
does not have the opportunity to refer to the valuation cell, it
is difficult to admit valuer’s report and give relief to the
applicant. This anamoly was also pointed out by the CIT
(DR).
9.6.In fact, the main discovery in the search action was
unearthing of undisclosed purchases which is shown in table
below. Instead of disclosing the income based on the
inflation of purchases which generated the undisclosed
income, the applicant adopted its own methodology to suit its
convenience and to claim depreciation.
9.7.The below table gives the undisclosed purchases
detected assessment year-wise
F.Y./A.Y Bogus bills raised Bogus bills raised Total
by Mahalaxmi by Bait Al Tamur
enterprises and others
(Rs.) (Rs.)
2008-09/2009-10 96,34,201 -- 96,34,201
2009-10/2010-11 2,64,84,500 7,97,54,158 10,62,38,
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W.P. No.36950 of 2016
and
W.M.P.Nos.31747 & 31748 of 2016
2010-11/2011-12 -- 8,75,95,837 8,72,95,8
2011-12/2012-13 1,59,02,082 4,88,89,901 6,47,91,9
2012-13/2013-14 6,68,866 3,11,27,981 3,17,96,8
5,26,89,649 24,70,67,878 29,97,57,
When this was pointed out by the Department, a letter with
Annexures was filed by the applicant on 29.09.2016 which is
enclosed in part, to this order. Herein for A.Yr 2010-11, an
amount of Rs. 8,55,03,998 an for A.Yr.2011-12, an amount of
Rs. 4,29,17,481, totaling to Rs. 12,84,21,479 is disclosed as
additional income on account of inflation of purchases.
9.8.The department clearly argued its case stating that
penalty should be levied as per Major Metals Ltd. – Mumbai
High Court Judgement. The disclosure earlier made to this
extent is not full and true. The applicant cannot disclose
additional income in installments.
10.0.On the issue of claim of depreciation, issues
relating to other immovable properties such as Anna Nagar,
Sterling Road, Kathalur, etc. there is no necessity for us to
give any findings as it is already held that the applicant did
not disclose full and true income in its application and hence
the application is not maintainable. On all other related
issue also there is no necessity for us to give a finding as the
applicable is being rejected. There is also difficulty with
regard to the AYs 2012-13 & 2013-14 as the income is
disclosed u/s. 115JB and the modifications cannot be done to
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W.P. No.36950 of 2016
and
W.M.P.Nos.31747 & 31748 of 2016
the income according to the AR No finding need be given in
this regard as application is being rejected as it is not full
and true.
11.0.From the above it can clearly be seen that
disclosure is not full and true and hence the application is
also not maintainable. Reliance is placed in the cases of CIT
vs ITSC 310 ITR 10, ACE Investments (2003) 264 ITR 571
(Mad) and Ajmeera Housing (2010) 193 TAXMN 193 (SC).”
15.Close reading of the above findings of the Settlement
Commission, would reveal that there are many lapses established on the
part of the petitioner / assessee in disclosing all the material facts truly
and fully. It is not one instance wherein a doubt raised but on several
issues the Settlement Commission could able to identify non-disclosure
of material facts on the part of the Assessee. The Commission made a
finding that the Assessee disclosed certain income only after the
confrontation with the Department Officials. Certain disclosures are
made in piecemeal then and to suit their convenience.
16.This being the conduct of the assessee established before
the Settlement Commission and the Settlement Commission also
categorically made a finding, this Court has no reason to interfere with
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W.P. No.36950 of 2016
and
W.M.P.Nos.31747 & 31748 of 2016
such findings as the said findings are candid and convincing and in
consonance with the provisions of the Income Tax Act.
17.In view of the fact that the application submitted by the
petitioner under Section 254C of the Income Tax Act, was rejected as not
maintainable in view of the non-compliance of the Mandatory conditions
stipulated under the provisions and the petitioner/assessee could not able
to establish that he has filed an application with true and full disclosure
of facts. Thus, the petitioner is not entitled for any relief as such sought
for in the present writ petition.
18.Accordingly, the writ petition stands dismissed. No costs.
Consequently, connected miscellaneous petitions are closed.
03.09.2021
Speaking/Non-speaking order
Index: Yes/No
Internet: Yes
Pns
S.M.SUBRAMANIAM, J.,
https://www.mhc.tn.gov.in/judis/
W.P. No.36950 of 2016
and
W.M.P.Nos.31747 & 31748 of 2016
Pns
To
1.The Chairman,
Income Tax Settlement Commission,
Principal Bench, New Delhi.
2.Income Tax Settlement Commission,
Additional Bench, 640, Anna Salai,
Chennai – 35.
3.Principal Commissioner of Income Tax,
Central – II, Chennai – 600 034.
4.The Assistant Commissioner of Income Tax (AO),
Central Circle-I, Trichy.
W.P. No.36950 of 2016
and
W.M.P.Nos.31747 & 31748 of 2016
03.09.2021
https://www.mhc.tn.gov.in/judis/
