POINT OF LAW: Assessment – In an application under S.245C of Act, for settlement of applicant's income-tax case, there should be disclosure of income not earlier disclosed before the Assessing Officer

JUDGMENT :

(Prayer in W.P.No.663 of 2018: Writ Petition filed under Article 226 of the Constitution of India, to issue a Writ of Certiorarified Mandamus, calling for the records of the 1st respondent contained in its impugned order bearing No.TN/CN/51/2016-17/3-IT dated 16.11.2017 and to quash the same as arbitrary, unjust and illegal, and to consequently, direct the 1st respondent to reconsider the application filed by the petitioner bearing No.TN/CN/51/2016-17/3-IT and pass a fresh order under Section 245D(4) of the Income Tax Act, 1961 after affording the petitioner a sufficient opportunity of being heard, in accordance with law.

W.P.No.664 of 2018: Writ Petition filed under Article 226 of the Constitution of India, to issue a Writ of Certiorarified Mandamus, calling for the records of the 1st respondent contained in its impugned order bearing No.TN/CN/51/2016-17/2-IT dated 16.11.2017 and to quash the same as arbitrary, unjust and illegal, and to consequently, direct the 1st respondent to reconsider the application filed by the petitioner bearing No.TN/CN/51/2016-17/2-IT and pass a fresh order under Section 245D(4) of the Income Tax Act, 1961 after affording the petitioner a sufficient opportunity of being heard, in accordance with law.

W.P.No.665 of 2018: Writ Petition filed under Article 226 of the Constitution of India, to issue a Writ of Certiorarified Mandamus, calling for the records of the 1st respondent contained in its impugned order bearing No.TN/CN/51/2016-17/44-IT dated 16.11.2017 and to quash the same as arbitrary, unjust and illegal, and to consequently, direct the 1st respondent to reconsider the application filed by the petitioner bearing No.TN/CN/51/2016-17/44-IT and pass a fresh order under Section 245D(4) of the Income Tax Act, 1961 after affording the petitioner a sufficient opportunity of being heard, in accordance with law.)

1. The orders of the Settlement Commission dated 16.11.2017 are under challenge in the present writ petitions.

2. Admittedly, the petitioner filed applications under Section 245(C) of the Income Tax Act before the Settlement Commission to resolve the disputes with the Income Tax Department. The said applications were adjudicated by the Settlement Commission and the learned counsel for the petitioner reiterated that the Settlement Commission has misunderstood the facts and circumstances and formed an erroneous opinion and dismissed the applications. Thus, the petitioner must be provided with an opportunity to re-adjudicate the issues before the Settlement Commission and to clarify the facts, enabling the Settlement Commission to decide the issues afresh.

3. The learned Senior Standing counsel appearing on behalf of the respondents/Department made a submission that it is a pre-condition that an assessee filing an application under Section 245(C) must come with full and true disclosure and with clean hands. Once it is established that true and full disclosure are not made and the facts are controverted, then the application itself is to be rejected in limini, in view of the pre-requisite condition contemplated under Section 245(C) of the Income Tax Act.

4. The complete facts and circumstances as narrated in the writ petitions become unnecessary, in view of the fact that an assessee filing an application under Section 245(C) of the Income Tax Act must establish at the first instance that true and full disclosure of income is made before the Settlement Commission. In the event of controversy or discrepancy in the matter of true and full disclosure of income, then the Settlement Commission is empowered to reject the application in limini.

5. The decisions arrived by the Settlement Commission with reference to the applications submitted by the petitioner, which reads as under:

“[TN/CN/51/2016-17/3-IT]

7.1 We have considered the submissions made by the learned CIT (DR) and learned AR and the reports of the Pr.CIT including information received from FT & TR Division and the relevant records. On the f