ITO, Lucknow V. Smt. Diksha Singh, Lucknow

ITA 41/LKW/2011

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 9077 (ITAT-LUCKNOW)
• Duration Of Justice: 1 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-03-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 16-03-2011
• Assessment Year: 2000-2001
• Appeal Filed On: 27-01-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: J J MEHROTRA
• Keywords: Search and seizure; Loose papers; Document seized; Opportunity of being heard; Principle of natural justice; Documents seized
• Section: 153A; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, A - BENCH, LUCKNOW. BEFORE SHRI H.L.KARWA, HON'BLE VICE PRESIDENT AND SHRI N.K.SAINI, ACCOUNTANT MEMBER I.T.A.NOS.41, 42, 43, 44, 45, 46 & 47 (LKW.)/2011 A.YS. : 2000-01, 2001-02, 2002-03, 2003-04, 2004-0 5, 2005-06 & 2006-07 THE ITO 1(1), RANGE-I, VS. SMT. DIKSHA SINGH, LUCKNOW. W/O LATE SHRI PARAMJEET SINGH, 132-134, ELDECO GREEN, GOMTI NAGAR, LUCKNOW. PAN ASCPS 0422 L (APPELLANT) (RESPONDENT) I.T.A.NOS.1, 2, 3, 4, 5, 6 & 7 (LKW.)/2011 A.YS. : 2000-01, 2001-02, 2002-03, 2003-04, 2004-0 5, 2005-06 & 2006-07 THE ITO 1(3), RANGE-I, VS. LATE SHRI PARAMJEET SI NGH, LUCKNOW, L/H SMT.DIKSHA SINGH, 132-134, ELDECO GREEN, GOMTI NAGAR, LUCKNOW. PAN ASCPS 0413P (APPELLANT) (RESPONDENT) DEPARTMENT BY : SHRI PRAVEEN KUMAR, CIT(D.R.) ASSESSEES BY : SHRI J.J. MEHROTRA, C.A. O R D E R PER BENCH THESE FOURTEEN APPEALS BY THE REVENUE INVOLVING CO MMON ISSUES WERE HEARD TOGETHER AND ARE BEING DISPOSED OF BY TH IS COMMON ORDER FOR THE SAKE OF CONVENIENCE. 2 2. IN I.T.A.NOS.41 TO 47(LKW)/2011, THE AO COMPLETE D THE ASSESSMENTS UNDER SECTION 153A READ WITH SECTION 144/245F(4) O F THE INCOME-TAX ACT, 1961( IN SHORT THE ACT) FOR THE ASSESSMENT YEARS 2000-01 TO 2006-07 ON SUBSTANTIVE BASIS IN THE CASE OF SMT.DIKSHA SINGH, WHILE I.T.A.NOS.1 TO 7(LKW)/2011 RELATE TO ASSESSMENT ORDERS PASSED BY T HE AO UNDER SECTION 153C READ WITH SECTION 144/245F(4) FOR THE ASSESSME NT YEARS 2000-01 TO 2006-07 IN THE CASE OF LATE SHRI PARAMJEET SINGH TH ROUGH L/H SMT.DIKSHA SINGH ON PROTECTIVE BASIS. 3. IN THESE APPEALS, THE REVENUE HAS RAISED THE CO MMON GROUNDS, WHICH READ AS UNDER : 1. WHETHER THE LD. CIT (A) IS CORRECT IN LAW AND O N FACTS IN DIRECTING THE ASSESSING OFFICER TO DELETE THE ADDIT ION MADE IN THE ASSESSMENT, IN VIEW OF THE FOLLOWING OBSERVATIO N MADE BY THE HON'BLE SETTLEMENT COMMISSION IN ITS ORDER DATE D 31ST MARCH, 2008. ' THE CIT/AO MAY TAKE SUCH ACTION AS APPROPRIATE IN RESPECT OF THE MATTERS, NOT PLACED BEFORE THE COMMI SSION BY THE APPLICANT, AS PER THE PROVISION OF SECTION 2 45F(4) OF THE I.T.ACT, 1961.' RELYING ON THE DECISION OF HON' BLE HIGH COURT IN T HE CASE NEERU AGARWAL VS. UOI (187 TAXMAN 198). 2. APPELLANT CRAVES LEAVE TO ADD OR AMEND THE GROUN D OF APPEAL AS STATED ABOVE AS AND WHEN NEED OF DOING TO ARISE WIT H PRIOR PERMISSION OF THE HON'BLE ITAT. 4. BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT A SEARCH AND SEIZURE OPERATION UNDER SECTION 132 OF THE ACT WAS CARRIED OUT AT THE PREMISES OF SMT.DIKSHA SINGH AND SHRI PARAMJEET SINGH ON 15.12. 2005. CONSEQUENTLY, 3 NOTICE UNDER SECTION 153A OF THE ACT WAS SERVED ON THE ASSESSEE (SMT.DIKSHA SINGH) FOR THE ASSESSMENT YEARS UNDER C ONSIDERATION ON 14.3.2007. SMT.DIKSHA SINGH FILED HER RETURNS OF IN COME FOR ALL THE ASSESSMENT YEARS ON 29.5.2007 SHOWING INCOME AT RS. NIL. 4.1 THE ASSESSEE MOVED AN APPLICATION BEFORE THE H ON'BLE SETTLEMENT COMMISSIONER ON 31.3.2007 FOR THE SETTLEMENT OF THE CASES. THE SETTLEMENT COMMISSION PASSED AN ORDER UNDER SECTION 245D OF TH E ACT ON 31.3.2008 IN THE CASE OF SMT.DIKSHA SINGH AND LATE SHRI PARAMJE ET SINGH THROUGH L/H SMT. DIKSHA SINGH SETTLING THE UNDISCLOSED INCOME O F SMT. DIKSHA SINGH AND LATE PARAMJEET SINGH THROUGH L/H SMT. DIKSHA S INGH AT RS.43 LACS. THE AO IN PARA 3 OF THE ASSESSMENT ORDER FOR THE AS SESSMENT YEAR 2000-01 IN THE CASE OF SMT.DIKSHA SINGH HAS OBSERVED THAT THE ORDER OF THE SETTLEMENT COMMISSION DATED 31 ST MARCH, 2008 SUFFERED FROM TWO DEFECTS. FIRSTLY, TH E UNDISCLOSED INCOME HAS NOT BEEN BIFURCATED ASSESSE E-WISE. SECONDLY, IT HAS ALSO NOT BEEN DECIDED THAT WHAT INCOME PERTAINED TO WHICH ASSESSMENT YEAR AS THERE ARE 14 ASSESSMENT YEARS IN QUESTION RELAT ING TO TWO ASSESSEES. 4.2 THE AO VIDE PARA 4 OF THE ASSESSMENT ORDER FOR THE ASSESSMENT YEAR 2000-01 AS WELL AS THE OTHER ASSESSMENT YEARS IN THE CASE OF SMT.DIKSHA SINGH AND LATE PARAMJEET SINGH THROUGH LEGAL HEIR S MT.DIKSHA SINGH HAS NOTED AS UNDER: 4. THE HON'BLE SETTLEMENT COMMISSION HAS IN ITS OR DER DT. 31.03.2008, MENTIONED THAT IT HAS NOT GIVEN ANY OPP ORTUNITY TO THE REVENUE TO PRESENT ITS CASES AS LAID DOWN IN SECTI ON 245D(4) OF I.T. ACT, 1961, DUE TO PAUCITY OF TIME AND ENORMITY OF W ORK. BUT, TO COMPLY WITH THE. ORDER OF HON'BLE ALLAHABAD HIGH COURT, TH E SETTLEMENT COMMISSION DID PASS AN ORDER ON 31.03.2008 FIXING T HE UNDISCLOSED INCOME OF ASSESSEE AT RS.43 LACS. AS THE COMMISSION HAD NOT GIVEN ANY OPPORTUNITY TO THE REVENUE, WHICH WAS ALSO A PA RTY IN THE CASE, THE ORDER OF THE HON'BLE SETTLEMENT COMMISSION IS P RIMA-FACIE AGAINST THE PRINCIPLES OF NATURAL JUSTICE. THE SETTLEMENT C OMMISSION HAD 4 THEREFORE, NOTED IN PARA 7 OF ITS ORDER THAT 'THE C IT/AO MAY TAKE SUCH ACTION AS APPROPRIATE IN RESPECT OF THE MATTERS, NO T PLACED BEFORE THE COMMISSION BY THE APPLICANT, AS PER PROVISIONS OF S ECTION 245D(4) OF THE I.T. ACT, 1961. 4.3 THE AO ISSUED A SHOW CAUSE LETTER DATED 15.5.20 08 TO THE ASSESSEE IN RESPECT OF THE MATTERS THAT WERE NOT PLACED BEFORE THE SETTLEMENT COMMISSION. THE ASSESSEE DID NOT COMPLY WITH THE RE QUIREMENT OF THE SHOW CAUSE NOTICED. EVEN ADJOURNMENT WAS ALSO NOT REQUES TED AND THEREFORE, THE AO COMPLETED THE ASSESSMENT UNDER SECTION 153A READ WITH SECTION 144/245F(4)OF THE ACT. FOR THE ASSESSMENT YEAR 2000 -01, THE AO DETERMINED THE TOTAL INCOME ASSESSABLE INCOME OF THE ASSESSEE AT RS.2,61,38,740 BY MAKING ADDITIONS/ DISALLOWANCES. THE AO ALSO COMPL ETED THE ASSESSMENTS IN THE CASE OF LATE PARAMJEET SINGH THROUGH LEGAL HEIR SMT.DIKSHA SINGH FOR THE ASSESSMENT YEAR 2000-2001 AND ALSO FOR RE MAINING YEARS IN BOTH THE CASES BY MAKING CERTAIN ADDITIONS/DISALLOWANCES. 5. AGGRIEVED BY THE ORDERS OF THE AO, THE ASSESSEE CARRIED THE MATTER IN APPEALS BEFORE THE LD.CIT(A). BEFORE THE LD.CIT(A), THE ASSESSEE RAISED SEVERAL GROUNDS, HOWEVER, VIDE GROUND NO.2 OF THE A PPEALS, THE ASSESSEE CHALLENGED THE ORDERS OF THE AO ON THE GROUND THAT THE AO HAS NO JURISDICTION TO MAKE AFRESH ASSESSMENT ORDER, ONCE THE ORDER UNDER SECTION 245D(4) OF THE ACT HAS BEEN PASSED BY THE SETTLEMEN T COMMISSION IN RESPECT OF THE SAME ASSESSMENT YEARS. IN SUPPORT OF THE ABOVE CONTENTION, THE ASSESSEE RELIED ON THE DECISION OF HON'BLE JURISDIC TIONAL HIGH COURT IN THE CASE OF SMT.NEERU AGARWAL VS. UNION OF INDIA [2010] 187 TAXMAN 198 (ALL.) HAVING IDENTICAL FACTS. VIDE GROUND NO.4 OF THE APPEALS, THE ASSESSEE ALSO CHALLENGED THE DETERMINATION OF TOTAL INCOME AND DEMAND CREATED THEREBY BOTH IN THE CASE OF SMT.DIKSHA SINGH AND LA TE SHRI PARAMJEET SINGH. 5 6. THE LD.CIT(A) ALLOWED THE APPEAL OF THE ASSESSEE FOR THE ASSESSMENT YEAR 2000-01 OBSERVING AS UNDER : 9. I HAVE GONE THROUGH THE FACTS OF THE CASE AND THE GROUNDS OF APPEAL AND THE ASSESSMENT ORDER. THE ASSESSEE FILED A PETITION BEFORE THE HON'BLE SETTLEMENT COMMISSION MENTIONING THE NA TURE AND CIRCUMSTANCES OF THE CASE COMPLEXITY OF INVESTIGATI ON IN THE ENCLOSURE 'B' TO THE SETTLEMENT APPLICATION. IN THE CONFIDENT IAL PORTION UNDER RULE 44CA(1) OF THE I.T. RULES, 1962 IN ANNEXURE- ' C' AND ANNEXURE 'D', THE ASSESSEE FURNISHED THE DETAILS OF THE MANN ER IN WHICH INCOME HAD BEEN DERIVED AND THE ISSUES TO BE SETTLED, WHIC H INCLUDED (I) DETERMINATION OF THE OWNERSHIP OF THE ASSETS, LOOSE PAPERS, NOTE BOOKS, REGISTERS, BOOKS ETC. NOTICED DURING THE COU RSE OF SEARCH, (II) DETERMINATION OF INCOMES AND THE ASSESSMENT YEARS I NVOLVED IN THE ASSETS, LOOSE PAPERS, NOTE BOOKS, REGISTERS, BOOKS ETC. NOTICED DURING THE COURSE OF SEARCH, (III) DETERMINATION OF ISSUES ARISING OUT OF ANY, ASSESSMENTS OR REASSESSMENTS FRAMED BY THE ASSESSIN G OFFICER FOR THE YEARS UNDER CONSIDERATION AFTER THE FILING OF THIS PETITION. THUS, IT IS EVIDENT THAT THE ASSESSEE HAD MOVED THE PETITION BE FORE THE SETTLEMENT COMMISSION, IN RESPECT OF THE, ASSETS, NOTE BOOKS /DOCUMENTS, LOOSE PAPERS FOUND DURING THE COURSE OF SEARCH. HOWEVER, THE ASSESSING OFFICER HAS OBSERVED AS UNDER IN PARA 4- 4. THE HON'BLE SETTLEMENT COMMISSION HAS IN ITS OR DER DT. 31.03.2008, MENTIONED THAT IT HAS NOT GIVEN ANY OPP ORTUNITY TO THE REVENUE TO PRESENT ITS CASES AS LAID DOWN IN S ECTION 245D(4) OF IT. ACT, 1961, DUE TO PAUCITY OF TIME AN D ENORMITY OF WORK. BUT, TO COMPLY WITH THE. ORDER OF HON'BLE ALL AHABAD HIGH COURT, THE SETTLEMENT COMMISSION DID PASS AN ORDER ON 31.03.2008 FIXING THE UNDISCLOSED INCOME OF ASSESSE E AT RS.43 LACS. AS THE COMMISSION HAD NOT GIVEN ANY OPPORTUNI TY TO THE REVENUE, WHICH WAS ALSO A PARTY IN THE CASE, THE OR DER OF THE HON'BLE SETTLEMENT COMMISSION IS PRIMA-FACIE AGAINS T THE PRINCIPLES OF NATURAL JUSTICE. THE SETTLEMENT COMMI SSION HAD THEREFORE, NOTED IN PARA 7 OF ITS ORDER THAT 'THE C IT/AO MAY TAKE SUCH ACTION AS APPROPRIATE IN RESPECT OF THE M ATTERS, NOT PLACED BEFORE THE COMMISSION BY THE APPLICANT, AS PER PROVISIONS OF SECTION 245D(4) OF THE I.T. ACT, 1961 . AND HAS ASSESSED THE INCOME ON THE BASIS OF THE IM POUNDED 6 DOCUMENTS. AS AN ILLUSTRATION, THE REASONS FOR MAKI NG THE ASSESSMENT ARE AS BELOW AS MENTIONED ON PAGE 3 OF THE ASSESSME NT ORDER FOR THE A.Y. 2000-01: ADD: ANNEXURE A-1/LP-1 PAGE -21 SHOW DETAILS OF PAYMENTS MADE OF RS.23,140 BY SMT.DIKSHA SINGH TO VLCC. THE ASSESSEE HAS NOT MENTIONED ANYTHING ABOUT THIS TRANSACTION IN THE STATEMENT OF FACTS SUBMITTED BEFORE HON'BLE S.C. RS.23,140 10. THE HON'BLE ALLAHABAD HIGH COURT IN THE CASE O F SMT.NEERU AGARWAL VS. UNION OF INDIA [2010] 187 TAXMAN 198 O N IDENTICAL FACTS HAVE HELD AS UNDER : THE RELEVANT PORTION OF THE ORDER OF THE SETTLEM ENT COMMISSION WAS PARAGRAPH 7 WHICH WAS THE BASIS OF T HE IMPUGNED NOTICE. IN THE SAID PARAGRAPH, THE COMMISS ION STATED: '7. THE COMMISSIONER OF INCOME-TAX/ASSESSING OFFICE R MAY TAKE SUCH ACTION AS APPROPRIATE IN RESPECT OF THE M ATTERS, NOT PLACED BEFORE THE COMMISSION BY THE APPLICANT, AS P ER THE PROVISIONS OF SECTION 245F(4) OF THE INCOME-TAX ACT , 1961.' THE SAID PORTION OF THE ORDER IS BEING CONSTRUED BY THE DEPARTMENT AS AUTHORISATION TO TAKE APPROPRIATE ACT ION IN RESPECT OF THE MATTERS NOT PLACED BEFORE THE COMMIS SION BY THE APPLICANT AS PROVIDED UNDER SECTION 245F(4) OF THE ACT. [PARA 16] THE ARGUMENT OF THE LEARNED SENIOR COUNSEL FOR THE PETITIONER, ON THE OTHER HAND, WAS THAT FINALITY HAD BEEN ATTAC HED TO THE ORDER OF THE SETTLEMENT COMMISSION BY SECTION 245-I . THE SAID SECTION PROVIDES THAT EVERY ORDER OF SETTLEMENT PAS SED UNDER SUB-SECTION (4) OF SECTION 245D SHALL BE CONCLUSIVE AS TO THE MATTERS STATED THEREIN AND NO MATTER COVERED BY SUC H ORDER 7 SHALL, SAVE AS OTHERWISE PROVIDED IN THIS CHAPTER, BE REOPENED IN ANY PROCEEDING UNDER THE ACT. IN OTHER WORDS, TH E INCOME-TAX AUTHORITIES HAD NO JURISDICTION EITHER TO ISSUE THE IMPUGNED NOTICE OR TO PASS THE IMPUGNED ORDER, NOTWITHSTANDI NG PARAGRAPH 7 OF THE ORDER OF THE SETTLEMENT COMMISSI ON. ASSUMING FOR THE SAKE OF ARGUMENT THAT THE GROUND O N WHICH THE NOTICE WAS GIVEN, WAS NOT COVERED BY THE APPLICATIO N, EVEN THEN IT COULD NOT BE A GROUND TO ISSUE THE IMPUGNED NOTI CE IN VIEW OF THE PLAIN LANGUAGE OF SUB-SECTION (4) OF SECTION 24 5D. [PARA 17] SECTION 245F(4) PROVIDES THAT IN THE ABSENCE OF ANY EXPRESS DIRECTION BY THE SETTLEMENT COMMISSION TO THE CONTR ARY, NOTHING IN CHAPTER XIX-A SHALL AFFECT THE OPERATION OF THE PROVISIONS OF THIS ACT INSOFAR AS THEY RELATE TO ANY MATTERS OTHE R THAN THOSE BEFORE THE SETTLEMENT COMMISSION. THE IMPUGNED NOT ICE HAD BEEN ISSUED IN PURPORTED EXERCISE OF POWER UNDER SE CTION 245D(4). UNDER SECTION 245D(4) POWER HAS BEEN CONFE RRED ON THE SETTLEMENT COMMISSION TO PASS SUCH ORDER AS IT THINKS FIT ON THE MATTERS COVERED BY THE APPLICATION AS ALSO ANY OTHER MATTER RELATING TO THE CASE NOT COVERED BY THE APPLICATION , BUT REFERRED TO IN THE REPORT OF THE COMMISSIONER UNDER SUB-SECT ION (1) OR SUB-SECTION (3) OF SECTION 245D. SECONDLY, IT WAS N OT THE CASE OF THE DEPARTMENT THAT THE GROUND ON WHICH THE NOTICE HAS BEEN ISSUED TO THE PETITIONER WAS A MATTER WHICH WAS NOT REFERRED IN THE REPORT OF THE COMMISSIONER UNDER SUB-SECTION (1 ) OR SUB- SECTION (3) OF SECTION 245D. [PARA 18] THE AFORESAID SECTION SHOULD BE READ CONJOINTLY WIT H SECTION 245-I WHICH ATTACHES FINALITY AND CONCLUSIVENESS TO EVERY ORDER OF SETTLEMENT. THE LEGISLATIVE INTENT IS LOUD AND CLEAR. THE ORDER PASSED BY THE SETTLEMENT COMMISSION HAS BEEN TREATED TO BE CONCLUSIVE. IT CAN BE RECALLED ONLY UNDER THE CI RCUMSTANCE WHEN IT IS SUBSEQUENTLY FOUND BY THE SETTLEMENT COM MISSION THAT THE ORDER WAS OBTAINED BY FRAUD OR MISREPRESEN TATION OF FACTS, AS PER SUB-SECTION (6) OF SECTION 245D. ON A CONJOINT READING OF SUB-SECTIONS (4) AND (6) OF SECTION 245D AND SECTIONS 245F(4) AND 245-I, IT WOULD APPEAR THAT EX CEPT IN THE CASE OF FRAUD OR MISREPRESENTATION OF FACTS, THE OR DER PASSED BY THE SETTLEMENT COMMISSION IS FINAL AND CONCLUSIVE A ND BINDING 8 ON ALL THE PARTIES. THIS APPEARS TO BE SO BECAUSE T HE SETTLEMENT COMMISSION WAS CONSTITUTED TO REDUCE THE LIFE SPAN OF LITIGATION AND TO PROVIDE SPEEDY REMEDY TO AN ASSESSEE WHO VOL UNTARILY DISCLOSES HIS/HER UNDISCLOSED INCOME FOR HASSLE FRE E SETTLEMENT OF THE CASE. THE VERY USE OF THE WORDS 'SETTLEMENT OF CASES' ARE INDICATIVE OF THE FACT THAT THE PROVISION HAS BEEN MADE TO SETTLE THE CASE IN ITS ENTIRETY FOR EVER AND LEAVE NO ISSU E OPEN FOR SUBSEQUENT DECISION. [PARA 19] IN THE INSTANT CASE, THE FACTS FOUND AND DOCUMENTS SEIZED IN SEARCH OPERATION WERE MATTERS WHICH RELATED TO THE SETTLEMENT OF UNDISCLOSED INCOME OF THE PETITIONER AND THEREFO RE, WERE SUBJECT-MATTER OF CONSIDERATION OF THE SETTLEMENT C OMMISSION. IT COULD NOT BE SAID THAT SUCH MATTERS WERE MATTERS OTHER THAN THOSE BEFORE THE SETTLEMENT COMMISSION. [PARA 20] THE SETTLEMENT COMMISSION IS REQUIRED TO DECIDE THE DISPUTE BY PASSING SUCH ORDER AS IT THINKS FIT 'ON THE MATTERS COVERED BY THE APPLICATION AND ANY MATTER RELATING TO THE CASE NOT COVERED BY THE APPLICATION BUT REFERRED TO IN THE REPORT OF THE COMMISSIONER UNDER SUB-SECTION (1) OR SUB-SECTION ( 3)'. THUS, THE CONTENTION OF THE DEPARTMENT THAT THE INVESTMEN T IN BONDS ETC. WAS NOT SUBJECT-MATTER OF THE ORDER OF THE SET TLEMENT COMMISSION IS NOT CORRECT. INVESTMENT IN BONDS ETC. AND SEIZED PAPERS ON WHICH THE ASSESSMENT WAS SOUGHT TO BE COM PLETED BY THE ASSESSING OFFICER BY GIVING THE IMPUGNED NOTICE , WERE BEFORE THE SETTLEMENT COMMISSION BY IMPLICATION OF LAW. THE INVESTMENT IN BONDS AND SECURITY ETC. WAS IN THE KN OWLEDGE OF THE DEPARTMENT AS ALSO THE DOCUMENTS RECOVERED DURI NG THE SEARCH OPERATION AND IF THEY WERE NOT PRESSED INTO SERVICE BY THE DEPARTMENT BEFORE THE SETTLEMENT COMMISSION, TH E DEPARTMENT SHOULD THANK ITSELF. IT WAS NO LONGER OP EN TO THE DEPARTMENT TO URGE THAT IT COULD ASSESS THE INCOME OF THE ASSESSEE ON THE BASIS OF THE INVESTMENT IN BONDS ET C. AND THE DOCUMENTS FOUND IN SEARCH. IT WOULD BE DEEMED THAT THE SETTLEMENT COMMISSION HAD TAKEN INTO CONSIDERATION THE ABOVE MATTERS ALSO. [PARA 21] THERE WAS ANOTHER ASPECT OF THE CASE. THE SEARCH OP ERATION WAS CARRIED ON BY THE DEPARTMENT AND CERTAIN DOCUMENTS WERE 9 SEIZED BY IT. THE DEPARTMENT WAS IN POSSESSION OF T HE ENTIRE MATERIAL INCLUDING THE INVESTMENTS MADE BY THE ASSE SSEE IN BONDS AND UNITS. THEREFORE, IT COULD NOT BE SAID TH AT THE ASSESSEE HAD PLAYED ANY FRAUD OR MISREPRESENTED THE FACTS. THE DEPARTMENT WAS VERY MUCH A PARTY BEFORE THE SETTLEM ENT COMMISSION AND IT WAS NOT THE CASE OF THE DEPARTMEN T THAT THE SETTLEMENT COMMISSION HAD PASSED THE ORDER WITHOUT GIVING ANY OPPORTUNITY OF BEING HEARD TO THE DEPARTMENT. M OREOVER, THE ORDER OF THE SETTLEMENT COMMISSION HAS BEEN ALL OWED TO BECOME FINAL.THE SETTLEMENT COMMISSION, BY OPERATIV E PORTION, HAD SETTLED THE UNDISCLOSED INCOME OF THE ASSESSEE AND PROVIDED IMMUNITY ETC. WITH THE RIDER THAT THE ORDER WOULD B E VOID IF IT WAS FOUND SUBSEQUENTLY THAT IT WAS OBTAINED BY FRAU D OR NISREPRESENTATION OF FACTS. [PARA 23] IT WAS NOT THE CASE OF THE DEPARTMENT THAT THE ORDE R WAS OBTAINED FROM HE SETTLEMENT COMMISSION EITHER BY FR AUD OR BY MISREPRESENTING THE FACTS. THE ASSESSING AUTHORITY, THEREFORE, HAS NO JURISDICTION TO ISSUE THE IMPUGNED NOTICE FO R MAKING FURTHER ENQUIRY IN THE MATTER IN VIEW OF SECTIONS 245D(6) AND 245-I. THERE CANNOT POSSIBLY BE PIECEMEAL DETERMINA TION OF THE INCOME OF AN ASSESSEE FOR RELEVANT PERIOD, ONE BY T HE SETTLEMENT COMMISSION AND ANOTHER BY THE ASSESSING OFFICER, OT HERWISE THE VERY PURPOSE OF FILING APPLICATION BEFORE THE SETTLEMENT COMMISSION WOULD BE FRUSTRATED. IT IS OBLIGATORY ON THE SETTLEMENT COMMISSION TO PASS AN APPROPRIATE ORDER AFTER TAKING INTO CONSIDERATION THE ENTIRE MATERIAL BROUG HT BEFORE IT BY THE PARTIES INCLUDING THE DEPARTMENT. THERE IS NO STATUTORY PROVISION WHICH MAY EMPOWER THE SETTLEMENT COMMISS ION TO RESTORE BACK THE MATTER IN RESPECT OF CERTAIN ITEMS TO THE ASSESSING OFFICER AND ALSO FINALLY SETTLE INCOME OF THE APPLICANT. THE SCHEME OF CHAPTER XIX-A DOES NOT ENV ISAGE VESTING OF ANY SUCH POWER IN THE SETTLEMENT COMMISS ION, AS INTERPRETED BY THE APEX COURT IN THE CASE OF CIT V. ANJUM M. H. GHASWALA [2001] 252 ITR 1/119 TAXMAN 352 THAT THE SETTLEMENT COMMISSION SHALL PASS AN ORDER IN ACCORD ANCE WITH LAW MEANS- THAT IT CAN STIPULATE THE CONDITIONS OF PAYMENT LIKE INSTALMENTS, LAST DATE FOR PAYMENT ETC. AND NOT BEY OND THAT. [PARA 24] 10 IN CIT V. OM PRAKASH MITTAL [2005] 273 ITR 326 (SC) ; [2005] 143 TAXMAN 373, THE APEX COURT HAS INTERPRETED SECTION 245D(6) AS ALSO OTHER PROVISIONS OF CHAPTER XIX-A AND HAS HELD THAT THE COMMISSION'S POWER OF SETTLEMENT HAS TO BE EXERCISED IN ACCORDANCE WITH THE PROVISIONS OF THE ACT. THOUGH THE COMMISSION HAS SUFFICIENT ELBOWROOM IN ASSESSIN G THE INCOME OF THE APPLICANT, YET IT CANNOT MAKE ANY ORD ER WITH A TERM OF SETTLEMENT WHICH WOULD BE IN CONFLICT WITH THE MANDATORY PROVISIONS OF THE ACT, LIKE IN THE QUANTU M AND PAYMENT OF TAX AND THE INTEREST. THE OBJECT OF THE LEGISLATURE, IN INTRODUCING SECTION 245C IS TO SEE THAT PROTRACTED PROCEEDINGS BEFORE THE AUTHORITIES OR IN COURTS ARE AVOIDED BY RESORTING TO SETTLEMENT OF CASES. IN THIS PROCESS AN ASSESSEE CA NNOT EXPECT ANY REDUCTION IN AMOUNTS STATUTORILY PAYABLE UNDER THE ACT. FURTHER, IT HAS BEEN HELD THAT THE INCOME-TAX DEPAR TMENT, IF SO ADVISED, MAY MOVE TO THE SETTLEMENT COMMISSION IF I T HAS MATERIAL TO ESTABLISH THAT THE ORDER WAS OBTAINED B Y FRAUD OR MISREPRESENTATION OF FACTS. [PARA 25] IN VIEW OF THE ABOVE, AFTER PASSING OF THE ORDER BY THE SETTLEMENT COMMISSION, NO POWER VESTS IN THE ASSESS ING AUTHORITY OR ANY OTHER AUTHORITY TO ISSUE THE IMPUG NED NOTICE IN RESPECT OF THE PERIOD AND INCOME COVERED UNDER THE ORDER OF THE SETTLEMENT COMMISSION. IN CASE OF FRAUD OR MISREPRE SENTATION OF FACTS, REMEDY IS TO APPROACH THE SETTLEMENT COMM ISSION. THE SETTLEMENT COMMISSION, BY PARAGRAPH 7 OF ITS ORDER, HAD NOT AND COULD NOT HAVE EMPOWERED THE INCOME-TAX AUTHORI TIES TO FRAME ANOTHER ASSESSMENT ORDER, WHILE SETTLING THE UNDISCLOSED INCOME OF THE PETITIONER FOR THE PERIOD COVERED BY ITS ORDER, IN RESPECT OF INVESTMENT IN BONDS ETC. [PARA 26] SINCE THE FACTS OF THE CASE ARE IDENTICAL WITH THE FACTS OF THE CASE IN THE CASE OF SMT. NEERU AGARWAL VS. UNION OF INDIA (SUPRA), THE DECISION IS DIRECTLY APPLICABLE TO THE FACTS OF THE CASE OF THE ASSESSEE AND AS RIGHTLY HELD BY THE HON'BLE HIGH COURT, AFTER PASSING OF THE ORDER BY THE SETTLEMENT COMMIS SION, NO POWER VESTS IN THE ASSESSING AUTHORITY OR IN ANY OT HER AUTHORITY TO ISSUE IMPUGNED NOTICE IN RESPECT OF THE PERIOD AND INCOME COVERED UNDER THE ORDER OF SETTLEMENT COMMISSION. I T MAY BE ARGUED THAT THE HON'BLE SETTLEMENT COMMISSION HAD N OT GIVEN 11 ANY OPPORTUNITY TO THE DEPARTMENT AS IS MENTIONED I N THE ORDER U/S 245D(4), HOWEVER, THE FACT REMAINS THAT THE ORD ER OF THE HON'BLE SETTLEMENT COMMISSION HAS NOT BEEN CHALLENG ED BEFORE THE HON'BLE HIGH COURT AND HAS BEEN ACCEPTED BY THE DEPARTMENT EXCEPT TO THE EXTENT OF MISC. APPLICATI ON FILED BEFORE IT. IN CASE OF FRAUD OR MISREPRESENTATION OF FACTS, REMEDY IS TO APPROACH THE HON'BLE SETTLEMENT COMMISSION. THE SET TLEMENT COMMISSION HAD NOT EMPOWERED THE INCOME-TAX AUTHORI TIES TO FRAME ANOTHER ASSESSMENT ORDER WHILE SETTLING THE U NDISCLOSED INCOME OF THE ASSESSEE FOR THE PERIOD COVERED BY IT S ORDER IN RESPECT OF THE INCOME MENTIONED IN THE VARIOUS SEIZ ED DOCUMENTS. HENCE, THE APPEAL OF THE ASSESSEE IS ALLOWED AND TH E ASSESSING OFFICER IS DIRECTED TO DELETE THE ADDITIONS MADE TO THE INCOME ON THE BASIS OF THE SEIZED DOCUMENTS, WHILE GIVING EF FECT TO THE ORDER OF THE HON'BLE SETTLEMENT COMMISSION. 7. THE LD.CIT(A) HAS PASSED SIMILAR ORDERS IN THE C ASES OF BOTH THE ASSESSEES FOR ALL THE ASSESSMENT YEARS UNDER CONS IDERATION. 8. WE HAVE HEARD THE RIVAL SUBMISSIONS. SHRI PRAVEE N KUMAR, LD.CIT(DR) HEAVILY RELIED ON THE ORDERS OF THE AO A ND ON THE OTHER HAND SHRI J.J.MENROTRA, C.A., LD. COUNSEL FOR THE ASSESS EE SUBMITTED THAT AFTER PASSING OF THE ORDER BY THE SETTLEMENT COMMISSION, NO POWER VESTS IN THE ASSESSING AUTHORITY OR ANY OTHER AUTHORITY TO SAY T HAT THE ORDER OF THE SETTLEMENT COMMISSION WAS DEFECTIVE AND INCOMPLETE AS THE ORDER OF THE SETTLEMENT COMMISSION IS FINAL AND THE AO WAS NOT J USTIFIED IN PRESUMING THAT ALL THE MATTERS AND MATERIALS WERE NOT PLACED BEFORE THE SETTLEMENT COMMISSION WITHOUT EVEN PINPOINTING EVEN A SINGLE I TEM. SHRI J.J.MEHROTA, C.A.,LD. COUNSEL FOR THE ASSESSEE RELIED ON THE DEC ISION OF THE HON'BLE JURISDICTIONAL HIGH COURT REFERRED TO IN THE ORDER OF THE LD.CIT(A) IN THE CASE OF SMT. NEERU AGARWAL VS. UNION OF INDIA (2010) 18 7 TAXMAN 198(ALL.).WE HAVE CAREFULLY PERUSED THE ORDERS OF THE AUTHORITIE S BELOW AND HAVE ALSO TAKEN NOTE OF THE DECISION OF THE HON'BLE JURISDIC TIONAL HIGH COURT REPORTED 12 IN (2010) 187 TAXMAN 198(ALL.) / (2011) 330 ITR 422 (ALL.). IN OUR CONSIDERED VIEW, THE DECISION OF HON'BLE JURISDICTI ONAL HIGH COURT RELIED UPON BY THE LD.CIT(A) IS SQUARELY APPLICABLE TO THE FACTS OF THE PRESENT CASE. THE LD.CIT(A) HAS ALREADY REPRODUCED THE RELEVANT P ORTION OF THE JUDGMENT AND THEREFORE, WE ARE NOT INCLINED TO REPRODUCE THE SAME IN OUR ORDER, WHICH AMOUNTS TO REPETITION. IN OUR CONSIDERED VIEW, THIS DECISION IS SQUARELY APPLICABLE TO THE FACTS OF THE PRESENT CASE. IN THA T VIEW OF THE MATTER, THE IMPUGNED ORDERS PASSED BY THE LD.CIT(A) DESERVE TO BE CONFIRMED. WE MAY ALSO ADD HERE THAT THE REVENUE APPARENTLY HAS NOT CONTESTED THE ORDER UNDER SECTION 245D(4) DATED 31.3.2008 OF THE SETTLEMENT C OMMISSION BY WAY OF FILING WRIT PETITION BEFORE THE HON'BLE HIGH COURT . THUS, IN VIEW OF THE PROVISIONS OF SECTION 245-I OF THE ACT, THE ORDER O F THE SETTLEMENT COMMISSION IS CONCLUSIVE AS TO THE MATTERS STATED T HEREIN AND NO MATTER COVERED BY SUCH ORDER SHALL, SAVE AS OTHERWISE PROV IDED UNDER CHAPTER XIX- A (I.E. SECTION 245E ETC.) CAN BE RE-OPENED IN ANY PROCEEDING UNDER THIS ACT OR UNDER ANY OTHER LAW FOR THE TIME BEING IN FORCE. EVEN OTHERWISE ALSO, THE SETTLEMENT COMMISSION HAS NOT EMPOWERED THE AO TO FRAME ANOTHER ASSESSMENT ORDER WHILE SETTLING THE UNDISCLOSED INC OME OF THE ASSESSEE FOR THE PERIOD COVERED BY ITS ORDER IN RESPECT OF THE INCOME MENTIONED IN THE VARIOUS SEIZ ED DOCUMENTS. IN VIEW OF THE ABOVE DISCUSSION, WE DO NOT FIND ANY MERIT IN THE APPEALS FILED BY THE REVENUE. 9. IN THE RESULT, ALL THE APPEALS ARE DISMISSED. THE ORDER PRONOUNCED IN THE OPEN COURT ON 17.3.11 . SD. SD. (N.K.SAINI) (H.L.KARWA) ACCOUNTANT MEMBER VICE PRESIDENT MARCH 17TH, 2011. 13 COPY TO THE : 1. APPELLANT 2. RESPONDENT 3. CIT(A) (4) CIT 5.DR. A.R.,ITAT, LUCKNOW. SRIVASTAVA.