Madras High Court
M/S. Anand Granite Exports Pvt Ltd vs Income Tax Settlement Commission on 10 May, 2024
Author: R.Mahadevan
Bench: R. Mahadevan, Mohammed Shaffiq
Writ Appeal Nos.1933, 1934 and 1936 of 2021
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED : 10.05.2024
CORAM :
THE HONOURABLE MR. JUSTICE R. MAHADEVAN
and
THE HONOURABLE MR. JUSTICE MOHAMMED SHAFFIQ
Writ Appeal Nos.1933, 1934 and 1936 of 2021
and
CMP Nos. 12500, 12504 and 12525 of 2021
---
W.A. No. 1933 of 2021
M/s. Anand Granite Exports Pvt Ltd
represented by its Director
Mr. Sridhar Anand
1B, A Block, Anugraha Apartments
19, Nungambakkam High Road
Chennai - 600 034 .. Appellant
W.A. No. 1934 of 2021
M/s. Global Exports
represented by its Partner
Mr. Sridhar Anand
1B, A Block, Anugraha Apartments
19, Nungambakkam High Road
Chennai - 600 034 .. Appellant
W.A. No. 1936 of 2021
Mr. Sridhar Anand
represented by his Legal heir
Late Dr. P. Anand
1B, A Block, Anugraha Apartments
19, Nungambakkam High Road
Chennai - 600 034 .. Appellant
https://www.mhc.tn.gov.in/judis
1/22
Writ Appeal Nos.1933, 1934 and 1936 of 2021
Versus
1. Income Tax Settlement Commission
(now substituted as Interim Board for Settlement
by Finance Act, 2021)
represented by its Secretary
Additional Bench, Chennai
Ministry of Finance
Department of Revenue
No.640, Anna Salai, Nandanam
Chennai - 600 035
2. The Deputy Commissioner of Income Tax
Central Circle - 1 (1), Chennai
New No.46, Mahatma Gandhi Road .. Respondents in all
Chennai - 600 034 the Writ Appeals
WA No. 1933 of 2021:- Appeal filed under Clause 15 of Letters Patent
against the order dated 17.04.2021 passed in W.P. No. 664 of 2018 on the file
of this Court.
WA No. 1934 of 2021:- Appeal filed under Clause 15 of Letters Patent
against the order dated 17.04.2021 passed in W.P. No. 665 of 2018 on the file
of this Court.
WA No. 1936 of 2021:- Appeal filed under Clause 15 of Letters Patent
against the order dated 17.04.2021 passed in W.P. No. 663 of 2018 on the file
of this Court.
For Appellant : Mr. T. Pramod Kumar Chopda, Senior Advocate
for Mr. R. Sivaraman
in all the Writ Appeals
For Respondents : Mr. A.P. Srinivas
Senior Standing Counsel
in all the Writ Appeals
https://www.mhc.tn.gov.in/judis
2/22
Writ Appeal Nos.1933, 1934 and 1936 of 2021
COMMON JUDGMENT
R.MAHADEVAN, J.
All these appeals are filed by the appellants / assessees questioning the
correctness of the common order dated 17.04.2021 passed by a learned Judge
in W.P. Nos. 664, 665 and 663 of 2018 respectively.
2. The grounds raised in all the writ appeals are identical and
common arguments have been advanced by the counsel for both sides.
Therefore, all these appeals are disposed of by this common judgment.
3. The necessary facts leading to the filing of these appeals are as
follows:
(i) One P.Anand, an individual, was a Director of M/s.Anand Granite
Exports Private Limited and Proprietor of two concerns viz., Anand Enterprises
and Snow White Salts. He was also a partner in M/s.Global Exports, a
partnership firm holding 5% shares in the said firm. He was primarily engaged
in the business of trading in granite and manufacturing salt.
(ii) According to the appellants, a search was conducted by the
respondent authorities on 25.02.2014 in exercise of power conferred under
https://www.mhc.tn.gov.in/judis
Writ Appeal Nos.1933, 1934 and 1936 of 2021
Section 132 of the Income Tax Act, 1961 (in short, "the Act") in the registered
and administrative office of Anand Granite Exports Private Limited and in the
residential premises of the said Dr. P.Anand. Simultaneously, search was also
conducted under Section 133A of the Act in the business premises of
M/s. Global Exports, during which sworn statements of the appellant in WA
No.1936 of 2021 and other employees were recorded under Section 131/
132 (4) of the Act. While so, on 25.11.2014, the said Dr.P.Anand had died.
(iii) Subsequent to the search and recovery of documents, notices
under Section 153C r/w section 153A of the Act were sent to the appellants for
the assessment years from 2008-2009 to 2013-2014. In respect of Assessment
Year 2014-15, notice under Section 142 (1) of the Act was issued to the
appellants in WA Nos.1933 and 1936 of 2021. After intimating the demise of
the said Dr. P. Anand to the department, notices under Section 153A were
withdrawn and fresh notices were issued to the legal heir of the deceased for
the assessment years from 2008-2009 to 2013-14.
(iv) Thereafter, the appellants filed settlement applications under
Section 245C of the Act for the block period from 2008-2009 to 2014-2015. In
the settlement applications, they disclosed the particulars relating to allowance
and disallowance, interest credited into savings bank account, unexplained
cash credits, unexplained investments in Bangalore flat, etc. That apart, the
https://www.mhc.tn.gov.in/judis
Writ Appeal Nos.1933, 1934 and 1936 of 2021
appellants also disclosed the details of the additional income, tax and interest
payable thereof, besides paying the additional tax amount and interest thereon.
(v) It was further stated by the appellants that the settlement
applications preferred by the appellants were allowed by the first respondent
by orders dated 10.05.2016 / 12.07.2016 passed under Section 245D (1) of the
Act. However, it was held therein that there was no prima facie material in its
possession which warranted the conclusion that true and full disclosure had not
been made by the appellants. Subsequently, report under Section 245D
(2B) of the Act was called for from the Principal Commissioner of Income Tax.
In response, vide letters dated 13.06.2016 / 02.08.2016, reports were
submitted by the PCIT. Thereafter, the first respondent, vide orders dated
22.06.2016 / 16.08.2016 passed under Section 245D (2C) of the Act, allowed
the settlement applications to be proceeded and declared as "not invalid". By
the said orders, the first respondent directed the Principal Commissioner of
Income Tax to submit Rule 9 report for further action.
(vi) As per the above said direction, the Principal Commissioner of
Income Tax, by letters dated 23.09.2016 / 30.09.2016 filed their detailed Rule
9 reports and the appellants also submitted point-wise submissions on
21.11.2016 clarifying all the issues raised therein together with documentary
evidence. However, the Principal Commissioner of Income Tax requested the
https://www.mhc.tn.gov.in/judis
Writ Appeal Nos.1933, 1934 and 1936 of 2021
first respondent to conduct further enquiry/investigation on certain issues.
Accordingly, the first respondent, after hearing both sides, passed orders dated
02.05.2017 permitting the Principal Commissioner of Income Tax to file report
under Section 245D(3). Accordingly, the Principal Commissioner of Income
Tax filed their reports on 04.07.2017 endorsing the reports of the second
respondent and lower authorities.
(vii) On 12.10.2017, during the personal hearing under Section
245D(4) of the Act, the first respondent directed the Principal Commissioner of
Income Tax to cause verification in respect of certain issues raised in Rule 9
reports. Pursuant to such direction, the Principal Commissioner of Income Tax
submitted their replies on 08.11.2017 and served the same on the appellants on
09.11.2017. Even in the said replies dated 08.11.2017 of the Principal
Commissioner of Income Tax, it was not stated that there is failure on the part
of the appellants to make full and true disclosure of all the facts. The only
discrepancy noticed was with regard to the quantification of additional income.
Thus, the appellants had truly and fully disclosed all the incomes in the
settlement applications, including the additional income.
(viii) According to the appellants, the replies dated 08.11.2017 were
served on them on 09.11.2017 and without giving sufficient time, the first
respondent directed the settlement applications to be posted for hearing on
https://www.mhc.tn.gov.in/judis
Writ Appeal Nos.1933, 1934 and 1936 of 2021
10.11.2017. Hence, the authorised representative of the appellants was not in a
position to submit a detailed submissions before the first respondent.
Notwithstanding the same, on 10.11.2017, the first respondent directed that
the copies of the documents received from the FT & TR Division relating to the
appellants be laced for the comments and reply by the authorised
representative of the appellants. However, the first respondent, without
considering the fact that voluminous documents were filed by the Principal
Commissioner of Income Tax by way of Rule 9 reports and the appellants were
not given reasonable time to respond the same, passed the orders under Section
245D(4) of the Act on 16.11.2017. Challenging the same, the appellants have
filed the Writ Petitions.
4. The learned Judge, after hearing the rival submissions, by the
common order dated 17.04.2021, dismissed the writ petitions with the
following observations:
"17. Conjoint reading of these provisions would reveal that the
report of the Commissioner of Income Tax, opportunity for the petitioner
to convert the materials and all such aspects are provided, enabling the
petitioner to establish his cases with reference to the applications filed
and not in respect of the other income or other materials.
18. It is to be understood that the procedures as contemplated
under Section 245(D) cannot travel beyond the scope of the applications
filed under Section 245(C) of the Income Tax Act. If Section 245(D), the
procedures as contemplated are allowed to go beyond the scope of
Section 245(C), then undoubtedly, the very spirit of Section 245(C) for
settlement of cases are diluted and further, it will result in usurping the
powers of the Assessing Officer and other competent authorities for
https://www.mhc.tn.gov.in/judis
Writ Appeal Nos.1933, 1934 and 1936 of 2021
initiation of actions under the other provisions of the Income Tax Act.
Every authority is empowered to exercise his power within the
parameters and within the ambit of the provisions of the Act. As far as
the settlement cases are concerned, the application filed under Section
245(C) is to be entertained and to be dealt with in accordance with the
procedures as contemplated under Section 245(D) and the procedures as
contemplated under Section 245(D) would not provide powers to the
Settlement Commission to travel beyond the scope of the provisions and
with reference to Section 245(C). Procedures are contemplated in order
to cull out the truth regarding the true and full disclosure to be made
along with the application filed under Section 245(C) and therefore, at
any stage of the enquiry, the Settlement Commission, if able to form an
opinion that an application is not filed with true and full disclosure, then
such an application shall be rejected. The very legislative intention of the
procedures formulated under Section 245(D) is to ensure that the
application for settlement of cases are considered in accordance with
Section 245(C) and therefore, the powers of the Settlement Commission
is limited to the extent of the scope of Section 245(C) and the other
provisions of the Act can be exercised only in order to formulate an
opinion and not to make a regular assessment under the Act, which is
the power to be exercised by the competent authority and certainly not by
the Settlement Commission.
19. In this regard, it is relevant to consider the judgment of
the Hon'ble Division Bench of the Madras High Court in the case of
Canara Jewellers Vs. Settlement Commission, reported in [2009] 184
Taxman 491 (Madras), and the relevant paragraphs are extracted
hereunder:
"8. The provision of Section 245C of the Income Tax Act,
1961 fell for consideration before the Supreme Court and High
Courts from time time. In C.I.T. vs. Express Newspapers Ltd.,
(1994) 206 I.T.R. 443 (SC), the Supreme Court held that in an
application under Section 245C of the Act, for settlement of
applicant's income tax case, there should be disclosure of income
not earlier disclosed before the Assessing Officer. If the Assessing
Officer or the income tax authority has already discovered it and
either has gathered the material to establish the particulars of
such income or fraud fully or is at a stage of
investigation/enquiries, then the disclosure cannot be said to be
voluntary or in good faith and the assessee cannot be allowed to
take advantage of the comparatively easy course of settlement.
The scope of Section 245C of the Income Tax Act, 1961 was also
noticed by this Court in Ace Investments Ltd. vs. Settlement
Commission, (2003) 264 I.T.R. 571 (Mad), wherein a learned
single Judge of this Court held that full and true disclosure of
income by the assessee is a condition precedent for settlement of
https://www.mhc.tn.gov.in/judis cases and for grant of immunity from penalty and prosecution.
Writ Appeal Nos.1933, 1934 and 1936 of 2021
Sections 245C and 245H of the Income Tax Act, 1961
contemplate full and true disclosure by the applicant of income
and the manner in which such income has been derived. When
once it is held that an application filed for settlement of cases is
not maintainable on the ground that the applicant has not made
full and true disclosure of the income, proceeding with such
application and deciding the issue would be outside the power of
the Settlement Commission, as the application itself is not in
conformity with Section 245C(1) of the Act. A similar view was
expressed by a Division Bench of this Court in Dr. C.M.K. Reddy
vs. Settlement Commission, (2008) 306 I.T.R. 403 (Mad).
11. So far as Section 245F is concerned, though the
Settlement Commission is empowered to have all powers which
are vested in an Income Tax Authority under the Act, in addition
to the power conferred under Chapter XIXA, but such power can
be exercised for the purpose of procedure of settlement of
application under Section 245C and not for re-assessment of tax
of a particular year which is vested with the Assessing Authority.”
20. The High Court of Delhi in the case of Rohit Kumar
Gupta Vs. Principal Commissioner of Income Tax, Central-II, reported
in [2019] 109 taxmann.com 257(Delhi), held as follows:
“45. The above decision interprets Section 245D (4) as a
substantive provision from where the powers of the ITSC to pass such
order as if it thinks fit arises. The next question that arises is whether the
expression 'such orders if it thinks fit' would include the power to pass
an order rejecting an application. If the interpretation placed by the
Petitioners on this provision is accepted it would mean that after having
allowed the applications to be proceeded with in terms of its order
passed under Section 245D (1) of the Act, the ITSC cannot at this stage,
after the report of the Commissioner has been submitted to it pursuant to
an order under Section 245D (2C) of the Act, dismiss the application at
all and that it would necessarily have to pass an order providing for the
terms of settlement. However, this does not appear to be a correct
understanding of the ambit of the expression 'such orders it deems fit'.
47. The Court is unable to understand how the above decision
helps the Petitioners in support of their contention that the ITSC cannot
at the stage of passing of final order under Section 245D(4) of the Act,
reject an application for failure of the Applicant to make a full and true
disclosure and the manner in which the undisclosed income was
derived.”
21. In the present cases, the findings of the Settlement
Commission are unambiguous and specific facts and circumstances were
also relied on by the Settlement Commission to arrive a decision
regarding true and full disclosure by the petitioner. Such a finding of fact
https://www.mhc.tn.gov.in/judis
Writ Appeal Nos.1933, 1934 and 1936 of 2021
need not be interfered with by the High Court under Article 226 of the
Constitution of India, unless such facts are found to be error apparent.
When there was an adjudication of facts and the Settlement Commission
arrived a finding that factually the petitioner has not established that he
filed applications under Section 245(C) with true and full disclosure,
then the High Court is expected to exercise restraint in entertaining a
writ proceedings under Article 226 of the Constitution of India.
22. In the present cases, the petitioner could not able to establish
that he approached the Settlement Commission with clean hands and the
element of true and full disclosure as contemplated under Section 245(C)
had not been established before the Settlement Commission and
therefore, there is no perversity or infirmity as such in respect of the
findings arrived.
23. It is brought to the notice of this Court that the Settlement
Commission has already been abolished with effect from 01.02.2021.
This being the factum established, the writ petitions fail and accordingly,
all the three writ petitions stand dismissed. No costs. Consequently,
connected miscellaneous petitions are closed."
5. Assailing the aforesaid common order dated 17.04.2021 of the
learned Judge, the present writ appeals are filed by the appellants / assessees.
6.(i) Mr. Pramod Kumar Chopda, learned Senior counsel appearing for
the appellants submitted that the orders passed by the first respondent, which
were impugned in the writ petitions, are in gross violation of the principles of
natural justice and the provisions of the Act. The Act empowers the first
respondent to determine the terms of settlement after considering all the facts
and circumstances of the case and by conducting necessary enquiries.
However, the first respondent failed to conduct adequate enquiry, which has
vitiated the orders of rejection. The learned Judge, without taking note of the
https://www.mhc.tn.gov.in/judis
Writ Appeal Nos.1933, 1934 and 1936 of 2021
above facts, has dismissed the writ petitions as not maintainable. In this
context, the learned Senior counsel relied on the decisions of the Apex Court in
Jyotendrasinhji vs. Tripathi and others reported in (1993) 201 ITR 611
(SC) and C.A. Abraham vs. ACIT reported in 255 ITR 340 and submitted
that an order of the Settlement Commission can be subjected to judicial review
when such an order is in violation of mandatory procedural requirements or
principles of natural justice or where there was no nexus between the reason
given and the decision taken.
(ii) The learned Senior counsel further submitted that the appellants
had truly and fully disclosed the income as required under Section 245C of the
Act. However, the first respondent, without any material evidence, concluded
that the appellants had suppressed the income. Thus, on mere surmises and
suspicion, the first respondent passed the orders of rejection. This was not
properly appreciated by the learned Judge while dismissing the writ petitions of
the appellants. Adding further, it is submitted that the learned Judge did not
take note of the fact that the appellants in their settlement applications, have
declared true and full particulars of all the incomes without any suppression.
The first respondent was satisfied with the particulars of income submitted at
the earliest point of time and proceeded to determine the claim of the appellants
under Section 245D(2C) of the Act. However, with the same objection raised
https://www.mhc.tn.gov.in/judis
Writ Appeal Nos.1933, 1934 and 1936 of 2021
by the Department, without any new material to substantiate the same, the
orders of rejection were passed by the first respondent and hence, they are
illegal and arbitrary.
(iii) The learned Senior counsel also invited our attention to the fact
that on 09.11.2017, the Principal Commissioner of Income Tax handed over
the reports to the authorised representative in a sealed cover. The appellants
were not aware of the contents of the reports in the sealed cover. The fact
remains that the appellant in W.A. No. 1936 of 2021 is the legal heir of late Dr.
Anand and he was only a student at that time and hence, he was not aware of
the investments made by his deceased father. In such circumstances, if
adequate opportunity is granted, he would have either satisfactorily explained
or offered the said amount before the first respondent and paid taxes.
However, such a reasonable opportunity has not been given to the appellants.
This aspect was omitted to be considered by the learned Judge, while
dismissing the writ petitions.
(iv) The learned Senior counsel further submitted that the first
respondent failed to exercise the powers vested under Section 245D (6) of the
Act after allowing the appellants to pass through the stage set under Section
245D (3) of the Act and the first respondent failed to pass the speaking orders
thereby defeating the very purpose of empowering him to do complete justice
https://www.mhc.tn.gov.in/judis
Writ Appeal Nos.1933, 1934 and 1936 of 2021
in a case of settlement of the dispute. With these submissions, the learned
Senior counsel for the appellants prayed for allowing all the appeals as prayed
for.
7. (i) Per contra, Mr. A.P.Srinivas, learned Senior Standing counsel
appearing on behalf of the respondents submitted that the first and foremost
requirement in filing an application for settlement before the Settlement
Commission, is that the assessee must come forward with full and true
disclosure without suppressing any material particulars. Unless the assessee
fulfils the statutory guidelines provided under Section 245(C), he is not entitled
for the settlement of the dispute before the Commission. When it is noticed that
the assessee has not truly and fully disclosed all the incomes within his
knowledge, then, the application for settlement cannot be entertained and it can
be rejected in limine. In the present case, the appellants failed to fulfil the
mandate provided under Section 245(C) of the Act and therefore, the orders of
rejection passed by the first respondent are lawful and the same cannot be said
to be arbitrary. Continuing further, he submitted that the assessee, while filing
an application under Section 245(C) of the Act, must establish at the first
instance that true and full disclosure of income is made before the Settlement
Commission; and that, if there is any controversy or discrepancy in disclosure
https://www.mhc.tn.gov.in/judis
Writ Appeal Nos.1933, 1934 and 1936 of 2021
of income, then, the Settlement Commission is empowered to reject the
application. In this case, the Commission, after affording opportunity at all
stages of the proceedings, dissatisfied with the disclosure of income by the
appellants and rejected the settlement applications. It is not as though the
appellants were not given opportunity of hearing before the Commission; and
the appellants were fully heard and therefore, the allegations to the contra are
liable to be rejected. The learned Judge declined to interfere with the orders of
the first respondent upon noticing that the appellants failed to disclose various
incomes and there are discrepancies in the income disclosed by the appellants.
(ii) The learned Senior Standing Counsel also submitted that with
respect to the income derived out of foreign bank accounts or deposits or
investments and income from M/s. Universal Construction Supplies, FZE,
Sharjah, UAE and flat at Dubai Marina, UAE in the name of (Late)
Dr.P.Anand, there is complete absence of disclosure in the returns as well as in
the applications for settlement. Further, the business activities of the applicant
and the company M/s.Anand Granite Exports Pvt Ltd., (represented by the
applicant as Director) in Dubai have also not been disclosed in the SOF of the
respective applications or in their returns of Income filed. Therefore, it cannot
be said that the disclosure / statements made by the appellants are full,
complete and true. Taking note of the concealment of facts which require
https://www.mhc.tn.gov.in/judis
Writ Appeal Nos.1933, 1934 and 1936 of 2021
deeper investigation, particularly with reference to foreign accounts/assets, the
first respondent concluded that there is suppression of material particulars and
the appellants are not entitled to settlement process. The claim of the appellant
in WA No.1936 of 2021 that he is only the legal heir of Late Dr. Anand and he
was not aware of the dealings made by his father, cannot be accepted,
inasmuch as the appellant is also involved in the dealings/transactions along
with his father as could be evident from the documents received from UAE
Authorities. Thus, the disclosure said to have been made by the appellants is
incomplete, contrary to truth and not in accordance with the requirement under
Section 245D of the Act.
(iii) It is also submitted that the department, during the course of
investigation, noticed that various foreign bank accounts in Dubai, China, and
U.K, have been suppressed. The enquiry made in relation to these accounts is
in progress. That apart, regarding the disclosure made in the SOF, the
applicants have failed to give the details of manner in which the income was
earned. Hence, owing to non-disclosure of the income in full and also due to
deficiency in explaining the facts gathered by the Department from UAE and
the manner in which the income was earned, the applications for settlement
were rightly rejected by the first respondent. In such circumstances, the learned
https://www.mhc.tn.gov.in/judis
Writ Appeal Nos.1933, 1934 and 1936 of 2021
Judge is justified in dismissing the writ petitions filed by the appellants by the
order impugned herein, which does not require any interference by this court.
8. We have heard the learned Senior counsel for the appellants and
the learned Senior Standing Counsel for the respondents and also perused the
materials placed on record.
9. It is not in dispute that the original assessee Dr.P.Anand had died
on 25.11.2014 and his son by name Sridhar Anand is the only legal heir of the
deceased. It appears that pursuant to the search and recovery made in the
business and residential premises of the original assessee, notices under
Section 153-A of the Act were issued to the appellants for the assessment years
2008-2009 to 2013-2014. Subsequently, another notice was issued in respect
of the Assessment year 2014-2015. On intimation of the demise of the original
assessee, notices issued under section 153A were withdrawn and fresh notices
were issued to the legal heir of the deceased. Upon receipt of the same, the
appellants preferred the settlement applications under Section 245-C of the Act
for the Assessment years from 2008-2009 to 2014-15. Initially, the settlement
applications were entertained by the first respondent vide orders dated
10.05.2016 / 12.07.2016 passed under Section 245D (1) of the Act, and the
https://www.mhc.tn.gov.in/judis
Writ Appeal Nos.1933, 1934 and 1936 of 2021
appellants also offered additional income for the assessment years under
consideration. However, after filing of Rule 9 reports by the Principal
Commissioner of Income Tax, the first respondent rejected the settlement
applications, by orders dated 16.11.2017, which were impugned in the writ
petitions. The learned Judge also refused to interfere with the rejection orders
passed by the first respondent, by the order impugned in these appeals.
10. Before us, the learned senior counsel for the appellants would
vehemently contend that the particulars furnished in the settlement applications
are true and correct. Further, it was contended that the Settlement Commission,
before passing the orders dated 16.11.2017, did not provide adequate
opportunity to the appellants and therefore, the said orders are in violation of
principles of natural justice. In effect, it was contended by the appellants that
the copies of the replies given by the Principal Commissioner of Income Tax
dated 08.11.2017 were received by them on 09.11.2017, on which date, the
case was posted for personal hearing, as contemplated under Section 245D (4)
of the Act and subsequently, it was adjourned to 10.11.2017. Thus, only half a
day was provided to enable the appellants to submit their written submissions
to the report under Section 245D (3) of the Act.
https://www.mhc.tn.gov.in/judis
Writ Appeal Nos.1933, 1934 and 1936 of 2021
11. However, we are not inspired by the submissions so made on
behalf of the appellants. First of all, settlement applications must contain full
and true disclosure of the income supported by documentary evidence. In the
absence of such disclosure, the remedy by way of settlement cannot be availed.
The Settlement Commission, in its orders dated 16.11.2017, has dealt with
each and every opposition raised by the Principal Commissioner of Income Tax
and the replies furnished by the appellants thereof. On going through the
oppositions raised by the Principal Commissioner of Income Tax, which were
narrated by the Settlement Commission extensively in its orders dated
16.11.2017, we find that there are several shortcomings in the particulars of
income disclosed by the appellants in their settlement applications.
12. Further, it is evident from the orders of the settlement commission
that the first respondent, after considering Rule 9 reports of the Principal
Commissioner of Income Tax and the replies submitted by the appellants,
rejected the settlement applications filed by the appellants, by observing that
the disclosure is not full and true and that, there is deficiency in explaining the
manner in which the income has been earned. On a detailed analysis, it is also
apparent that there is no disclosure of the facts in the applications or in the
returns of income about the foreign bank accounts or deposits or investments
https://www.mhc.tn.gov.in/judis
Writ Appeal Nos.1933, 1934 and 1936 of 2021
and income from M/s. Universal Construction Supplies, FZE, Sharjah, UAE
and flat at Dubai Marina, UAE of the original applicant late Dr.P.Anand. That
apart, the business activities of the applicant and his company M/s.Anand
Granite Exports Pvt Ltd. situated in Dubai, have not been mentioned in the
applications or returns of income. Therefore, the settlement commission was of
the view that there is concealment of facts, which require deeper investigation
into the case of the applicants, particularly, with regard to the foreign accounts
/ assets. Though the applicant in WA. No.1936 of 2021 / legal heir of the
deceased Dr.P.Anand, stated that he is not aware of the dealings of his father
Dr.P.Anand, the same was not accepted by the settlement commission stating
that he is also involved in the dealings of the original applicant, as evident from
the documents received from the UAE authorities.
13. The first respondent / settlement commission has also observed in
its orders dated 16.11.2017, which were impugned in the writ petitions that the
original applicant late Dr.P.Anand was the Managing Director of Anand
Granite Exports Private Limited during the period covered in the settlement
applications; that, various foreign bank accounts in Dubai, China and UK have
been found, and that the enquiry in relation to these accounts is in progress. It
was specifically mentioned by the settlement commission in its order in
https://www.mhc.tn.gov.in/judis
Writ Appeal Nos.1933, 1934 and 1936 of 2021
TN/CN/51/2016-17/2-IT relating to M/s.Anand Granite Exports Pvt. Ltd, that
as per the evidence furnished by UAE authority, the applicant company
obtained licence on 28.10.2013 to do trading of building and constructions
materials; but the business activities of the applicant company in Dubai and
any income derived therefrom were not disclosed in the settlement applications
or in the returns of income filed before the Department. That apart, the names
of the maistries given for verification, do not tally with that of the name given
in the sworn statements, settlement applications and during the course of
hearing. In addition, the appellant failed to extend full co-operation to furnish
and explain the true nature of entries / transactions with Bannari Amman
Sugars Ltd. It is also pointed out in the order in TN/CN51/2016-17/44-IT
relating to M/s.Global Exports that the applicant has suppressed the export
sales receipts amounting to Rs.1.32 crores for the AY 2008-09 which was
admitted only at the time of final hearing after verification. Thus, it is clear that
the appellants failed to disclose true and full particulars of the income earned
and to explain the manner in which it was earned. In such circumstances, this
Court cannot direct the Settlement Commission to entertain the settlement
applications submitted by the appellants, notwithstanding the various
shortcomings noticed by them.
https://www.mhc.tn.gov.in/judis
Writ Appeal Nos.1933, 1934 and 1936 of 2021
14. Pointing out the specific facts and circumstances to reach the
conclusion that the settlement applications do not contain true and full
particulars of the income to be subjected to tax under the Income Tax Act, the
learned Judge in para No.21 of the order impugned herein, has rightly held that
such a finding of fact need not be interfered with by this Court under Article
226 of the Constitution of India, unless such facts are found to be error
apparent. The learned Judge also rendered a finding that when there was an
adjudication of facts and the Settlement Commission arrived at a finding that
factually, the appellants could not establish while filing the settlement
applications, then, this Court has to exercise restraint in entertaining the writ
petitions as against the order of the Settlement Commission. Therefore, this
court finds no reason to interfere with the order passed by the learned Judge in
dismissing the writ petitions filed by the appellants.
15. In fine, all the writ appeals are dismissed. No costs.
Consequently, connected miscellaneous petitions are closed.
[R.M.D., J] [M.S.Q., J]
10.05.2024
Index : Yes / No
Internet : Yes / No
rsh
https://www.mhc.tn.gov.in/judis
Writ Appeal Nos.1933, 1934 and 1936 of 2021
R. MAHADEVAN, J
and
MOHAMMED SHAFFIQ, J
rsh
To
1. The Secretary
Income Tax Settlement Commission
(now substituted as Interim Board for Settlement
by Finance Act, 2021)
Additional Bench, Chennai
Ministry of Finance
Department of Revenue
No.640, Anna Salai, Nandanam
Chennai - 600 035
2. The Deputy Commissioner of Income Tax
Central Circle - 1 (1),
New No.46, Mahatma Gandhi Road
Chennai - 600 034
WA Nos. 1933, 1934 & 1936/2021
10-05-2024
https://www.mhc.tn.gov.in/judis
