Settlement Application Cannot Be Rejected Without Examining Manner of Deriving Undisclosed Income

Khazana Jewellery Pvt. Ltd. Vs Income Tax Settlement Commission (Madras High Court) The appeal before the Madras High Court arose from the dismissal of a writ petition challenging the rejection of a settlement application filed under Section 245C of the Income Tax Act, 1961. The appellant company, engaged in manufacturing and trading of jewellery, was subjected to a search under Section 132 on 21.04.2016. During the search, the Managing Director admitted in his sworn statement that refinery losses had been inflated by about 3% to 5%, and excess gold siphoned off and sold in the black market. I...