Point of Law: Court in exercise of its constitutional jurisdiction under Article 226 of the Constitution of India cannot substitute the findings of the Income Tax Settlement Commission with its own findings and come to a different conclusion.

JUDGMENT :

MD. NIZAMUDDIN, J.

1. Heard Learned Counsel appearing for the parties.

2. In this Writ Petition petitioner/Principle Commissioner of Income Tax, Central-2, Kolkata has challenged the impugned order dated 29th July, 2016 passed by the Income Tax Settlement Commission/respondent no. 1, making prayer for revocation of the aforesaid impugned order.

3. On perusal of the Writ Petition, affidavit-in-opposition and reply thereto, relevant facts involve in short emerged in this case are as follows.

4. M/s UTC Marketing Pvt. Ltd./respondent no. 2 filed a settlement application relating to Assessment Year 2012-13 before the Income Tax Settlement Commission/respondent no. 1 on 8th April, 2015 for settlement of its Income Tax matters by disclosing an income of Rs. 3,93,93,544/-. The aforesaid application of the respondent no. 2 was proceeded with under Section 245 D (1) of the Income Tax Act, 1961 by an order dated 21st April, 2015. After receipt of the Report under Section 245 D (2B) of the Act, from the Commissioner of Income Tax concerned, hearing under Section 245 D (2C) of the Act was fixed on 3rd June, 2015 and the aforesaid Settlement application was held to be “not invalid.” Thereafter, a Report under Rule 9 of Income Tax Settlement Commission (Procedure) Rules, 1997 was called from the Principle Commissioner of Income Tax concerned and the said Report was received by the Learned Settlement Commission/respondent no. 1 on 3rd September, 2015.

5. In the aforesaid Report under Rule 9 of Income Tax Settlement Commission (Procedure) Rules, 1997 petitioner/Principle Commissioner of Income Tax (Central-2) objected to the settlement of the case of the assessee/respondent no. 2 by alleging that it has not at all made true and correct disclosure of its undisclosed income before the respondent Settlement Commission and that the respondent no. 2 has failed to establish the manner in which profit was earned and in the aforesaid Report it also alleged that on analysis of facts and figures available in the return of income of the respondent no. 2 for the Assessment Year 2012-13 it was found that the assessee respondent no. 2 has earned Rs. 17,98,022/- and has profit against gross receipts/sale of Rs. 31,80,72,237/- which showed 0.566% profit on sale/gross receipts and in view of such finding it was contended that to earn trading profit of Rs. 1.9 Crore the assessee must have sale/gross receipt of Rs. 336,28,31,858/- and also must have incurred expenditure for corresponding amount of purchases and further contended that except few handwritten expenditure entries of date and corresponding amount of profit earned on such dates in a slip of paper as reproduced before the head UTC-Trading Profit, nothing was provided by the assessee/respondent no. 2 in its settlement application.

6. Petitioner has also alleged in its report under Rule 9 of Income Tax Settlement Commission (Procedure) Rules, 1997 that the assessee/respondent no. 2 was in the habbit of not disclosing its true and correct income before the department without citing any instance in the said Report but admitted that the assessee/respondent no. 2 was compelled to disclose its undisclosed income arising out of unrecorded business transactions only when the existence of the same was brought to light by the survey operation and alleged that had the survey not been conducted and the documents not seized the assessee/ respondent no. 2 would not have disclosed any unaccounted income voluntarily which indirectly is an admission by the petitioner that the respondent no. 2 has disclosed before the Learned Commission its undisclosed income may be under compulsion. Apart from these objections in its Report under Rule 9 of Income Tax Settlement Commission (Procedure) Rules, 1997, petitioner submitted before the Learned Settlement Commission for allowing it for further enquiry for arriving at true and correct undisclosed income of the assessee/respondent no. 2.

7. Against the aforesaid Report under R