26/09/2023
Yesterday, the delivered an important judgment on the jurisdiction of Income Tax Settlement Commission: ๐๐ค๐ฉ๐๐ ๐๐๐๐๐ฃ๐๐ง๐ ๐ฝ๐๐ฃ๐ ๐๐๐ข๐๐ฉ๐๐ ๐ซ๐จ ๐พ๐ค๐ข๐ข๐๐จ๐จ๐๐ค๐ฃ๐๐ง ๐ค๐ ๐๐ฃ๐๐ค๐ข๐ ๐๐๐ญ ๐ฝ๐๐ฃ๐๐๐ก๐ค๐ง๐ 2023 ๐๐๐๐พ 855.
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Even if the pre-conditions prescribed under Section 245C are to be read into Section 245H, it cannot be said that in every case, the material โdisclosedโ by the assessee before the Commission must be something apart from what was discovered by the Assessing Officer.
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What is of relevance is that the assessee offered to tax, income, in addition to the income recorded in the return of income. Section 245C read with Section 245H only contemplates full and true disclosure of income to be made before the Settlement Commission, regardless of the disclosures or discoveries made before/by the Assessing Officer.
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The Order passed by Assessing Officer based on any discovery made, is not the final word, for, it is appealable. However, the assessee may accept the liability, in whole or in part, as determined in the assessment order. In such a case, the assessee may approach the Settlement Commission making โfull and true disclosureโ of his income and the manner in which such income has been derived. Such a disclosure may also include the income discovered by the Assessing Officer.
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To say that in every case, the material โdisclosedโ by the assessee before the Commission must be something apart from what was โdiscoveredโ by the Assessing Officer, in our view, seems to be an artificial requirement.
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whether immunity from prosecution and penalty should be granted in a given case, has to be decided by the Commission by exercising its discretion, in the light of the facts and circumstances of each case. There is no straight jacket formula that would universally apply in every case. Where the Commission is satisfied that the applicant (a) has made full and true disclosure of his income and the manner in which such income was derived, and (b) has 34 co-operated with the Commission in the proceedings before it, immunity under Section 245H may be granted.
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Supreme Court/ High Court while exercising powers under Articles 32, 226 or 136 of the Constitution of India, as the case may be, may not interfere with an order of the Commission, passed in exercise of its discretionary powers, except on the ground that the order contravenes provisions of the Act or has caused prejudice to the opposite party. Interference may also be open on the grounds of fraud, bias or malice - Sufficiency of the material and particulars placed before the Commission, based on which the Commission proceeded to grant immunity from prosecution and penalty as contemplated under Section 245H of the Act, are beyond the scope of judicial review, except under the circumstances set out above.
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Frequent interference with the orders or proceedings of the Settlement Commission should be avoided. We have already indicated the limited grounds on which an order or proceeding of the Settlement Commission can be judicially reviewed. The High Court should not scrutinize an order or proceeding of a Settlement Commission as an appellate court. Unsettling reasoned orders of the Settlement Commission may erode the confidence of the bonafide assessees, thereby leading to multiplicity of litigation where settlement is possible. This larger picture has to be borne in mind.
