Settlement Commission not precluded from proceeding despite non disclosure of prosecution for the period in question as pre-requisites not require so.
ABCAUS Case Law Citation:
ABCAUS 2831 (2019) (03) HC
The Petitioner Income Tax Department had approached the Hon’ble High Court for quashing the order of the Income Tax Settlement Commission (the Commission).
The petitioner department was aggrieved by the processing of the application and the order so passed by the Commission in not holding the application invalid for the reasons that even when the respondent was facing prosecution for the assessment year in question, it never disclosed this aspect of the matter before the Commission.
However the Hon’ble High Court opined that such an objection can not obstruct the exercise of the Commission power’s under Section 245(2C) of the Act because such exercise is founded on the provisions underlying Section 245C(2) which enables an assessee to move the ‘Commission’ at any stage during the pendency of assessment proceedings in case he is of the opinion that he has not given full and true disclosure of his income before the Assessing Officer.
In other words, where an assessment proceedings are pending and the assessee is satisfied that he has not given a full and true disclosure of income before the Assessing Officer he can move the ‘Commission’ by filing an application under Section 245C(1) of ‘the Act’ disclosing his full and true income including the one which has not been disclosed before the Assessing authority as well the manner in which such income has been derived together with the additional amount of tax payable thereon.
The Hon’ble High Court concurred that to the above said extent and unless those pre-requisites are satisfied, the Settlement Commission would not proceed with the application
However, the Hon’ble High Court opined that the situation in the instant case was different. Though the Settlement Commission kept the proceedings in abeyance due to pendency of the prosecution case, the statutory provisions underlying Section 245C does not preclude the ‘Commission’ from proceeding despite such prosecution because the 3 pre-requisites which requires to be satisfied for invoking the remedy, does not require the assessee to disclose whether or not he is facing prosecution for the period in question.
The Hon’ble High Court held that there was no error in the jurisdiction exercised by the Settlement Commission in not declaring the application of the respondent ‘not invalid’.