Case Law Details
Under section 245D of the Act, once the application is admitted, the assessee is required to pay the additional demand on the basis of income disclosed in the application within 35 days of the order of the Commission u/s 245D(1) and in case the demand is not paid within the time allowed interest at prescribed rate is chargeable under 245D(2C). There is no material before us nor there is anything to suggest that in the order of the Settlement Commission that the assessee did not comply with aforesaid order u/s 245D(1) of the Act.
Similarly, when the Settlement Commission passes final order under section 245D(4) of the Act, the tax payable in pursuance of such an order is required to be paid by the assessee within 35 days of the receipt of copy of the order and for failure to do so, the assessee is liable to pay interest at the prescribed rate under section 245D(6A). Thus the interest payable under sections 245D(2C) and 245D(6) are in different contexts and are levied independently. In the instant case, the ld. CIT(A) after analyzing the procedure laid down under the provisions of sec. 245D of the Act concluded that there being no scope for revising an application made under section 245C of the Act, charging of interest u/s 245D(2C) of the Act on the premise that the applicant revised the original application is against the letter and spirit of the provisions contained in S. 245C(1), & 245D of the Act. The ld. CIT(A) also concluded that the process of settlement is the outcome of detailed submission and arguments from both sides and accordingly , the additional income was finally estimated @ 6% of the undisclosed sales and consequently there is no case for charging of interest u/s 245D (2C) nor there is any such direction of the Settlement Commission. As pointed out earlier ,the Hon’ble Apex Court in Ajmera Housing Corporation (supra) held that in the scheme of Chapter XIX-A, there is no stipulation for revision of an application filed under section 245C(1) of the Act . Thus, the determination of income by the Settlement Commission is necessarily with reference to the income disclosed in the application filed under the said section in the prescribed form. Moreover, in terms of provisions of sec.245I of the Act, every order of settlement passed under sub-section (4) of section 245D is conclusive as to the matters stated therein and no matter covered by such order , save as otherwise provided in the Chapter XIXA, can be reopened in any proceeding under this Act or under any other law for the time being in force.
INCOME TAX APPELLATE TRIBUNAL DELHI
IT(SS) nos.29 to 32 /D/2011
Block period:1-4-95 to 5-10-2001
Assistant Commissioner of Income-tax, Circle-1
versus.
Laxman Das
Date of pronouncement 30 -03-2012
O R D E R
A.N.Pahuja:- These four appeals filed on 3rd October, 2011 by the Revenue against four separate orders dated 15th July, 2011 of the CIT(A)-III, New Delhi, in the case of S/shri Laxman Das, Govind Lal, Vishan Dass and Ved Prakash , raise the following similar grounds:-
1 “On the facts and in the circumstances of the case, the CIT(A) has erred in law and on facts in deleting the interest of Rs. 13,03,211/- charged by the Assessing Officer u/s 245 D(2C) of the Income-tax Act, 1961.
2 On the facts and in the circumstances of the case, the CIT(A) has erred in law and on facts in holding that the undisclosed income finally settled at Rs. 37,04,040/- was on account of the order passed by the Settlement commission without appreciating the fact that the assessee himself had revised the undisclosed income earlier offered by him which was ultimately accepted by the Commission.
3 The order of the learned CIT(A) is erroneous and is not tenable on facts and in law.
4 The appellant craves leave to add, alter or amend any/all of the grounds of appeal before or during the course of the hearing of the appeal.”
2. Facts, in brief, as per relevant orders are that a search u/s 132 of the Income-tax Act, 1961 (hereinafter referred to as the Act) was conducted in the premises of K.C. Group of cases on 5.10.2001. During the search beside cash of Rs. 2,16,500/- and stock worth Rs. 53,21 ,218/- ,a number of incriminating documents and books of accounts were seized. Moreover, a number of undisclosed bank accounts came to the notice. Consequently, a notice u/s 158BC of the Act was served upon these assessees on 8th October, 2002. In response, these assessees filed return for the block period ending 5th October, 2001 on 10th December, 2002 declaring nil undisclosed income. Immediately thereafter on 11.12.2002, applications u/s 245C(1) of the Act were filed before the Settlement Commission, disclosing income of Rs. 10,00,000/- in the hands of each of the aforesaid four persons i.e an amount of Rs. 40,00,000/- @2% of the turnover of Rs. 20 crores. These applications were admitted u/s 245D(1) of the Act vide the order dated 23.10.2003. Subsequently , these assesses deposited tax of Rs. 6,12,000/- each on 26th December, 2003 in terms of aforesaid order dated 23rd October, 2003.Later, these assesses deposited Rs. 12,240/- each on 24th July, 2007. After admission of the application u/s 245D(1) of the Act, the Commission called for a report under Rule 9 of the Settlement Commission Rules, from the concerned CIT In the light of said report, the Settlement Commission heard the matter on 24th September, 2009, 3rd November,2009, 18th November,2009 19th January, 2010 and 2nd March, 2010 and an order u/s 245D(4) of the Act was passed on 26.03.2010 for the block period, in the following terms:
“5. The case was finally heard on 2.3.2010. Sh. S.K. Tulsiyan, Advocate, stated that the unaccounted turnover mainly related to fabrics and as the trading was on wholesale basis, where elaborate handling on the part of the applicant was not required. He further submitted that for the purpose of buying peace and setting at rest all disputable issues the applicants, in modification of their earlier declaration, were finally offering additional income as under:-
6% of aggregate turnover of Rs.21 ,36,02,650/- = 1,28,16,160/-
Add;. Seed Money 20,00,000/-
Total 1,48,16,160/-
Sh. Tulsiyan added that the revised offer of Rs.I,48, 16,160 would be equally. divided in the hands of the four applicants @ Rs.37,04,040/- each.
6. We have considered the facts and circumstances of the case, the rival submissions and the documents on record. There is no dispute regarding the computation of the total unaccounted turnover by the Deptt. at Rs.21,36,02,650/- as the same has been accepted by the applicants and on that basis the offer of the additional income has been revised. As regards the application of gross profit rate, the Bench finds that the CIT has adopted the gross profit rate varying from 8.56 to 14.68%, based on the disclosed results of the applicants in the respective years in their regular books of account. It is relevant to mention here that while the accounted business of the applicants was in hosiery goods, the unaccounted business related predominantly to fabrics. The CIT has not been able to produce any material to the contrary. In the circumstances, the adoption of the gross profit rate of the accounted business for the unaccounted business would be unjustified. It is seen that while making the offer of additional income the applicants have taken the net profit rate of 6%. On the facts and in the circumstances of the case the adoption of the net profit rate by the applicants at 6% appears to be fair and reasonable and is accepted.
7. As regards the third issue, i.e. estimation of the working capital, it is seen that the CIT in the report under Rule-9 has taken 10% of the total turnover as the unexplained investment of the group for the block period. We find that neither in the report under Rule-9 nor in the course of hearing any basis for the estimation at 10% of the total turnover has been provided. The applicants have offered a sum of Rs.20 lac as the seed money and have claimed that the said capital was adequate to generate the .unaccounted turnover of the business. Their argument is that they availed of the credit facility from the suppliers and also ploughed back the profits earned into the business. Having taken into consideration the facts we are inclined to accept the offer of the seed money of Rs.20 lac as adequate for generating the unaccounted turnover under reference.
8. In view of the above discussion, we accept the offer of additional income of Rs.l,48, 16,160/- as mentioned in para 5 above. In the absence of anything to the contrary being brought to our notice the request of the applicants to allocate this income equally among the four applicants i.e.Rs.37,04,040/- each, is also accepted.
9. The computation of income is enclosed as per annexure.
10. The applicant has requested for waiver of interest under various provisions of the Act. Interest uls 158BFA being mandatory in nature, its waiver cannot be allowed. The A. O. is directed to charge interest as per law . Interest under section 220(2), applicable on the sustained demand on various dates, if any, is to be charged up to the date of this order.”
3. In terms of the aforesaid order of the Settlement Commission, the AO passed a consequential order on 4th May, 2010, levying, inter alia, interest u/s 245D(2C) and 158BFA(2) of the Act, as under:
Interest u/s 245D(2C)
| S No. | Particulars | Amount |
| 1 | Amount declared as per original application dt. 23.10.2003 | 10,00,000/- |
| 2 | Revised amount of original application | 37,04,040/- |
| 3 | Tax and Surcharge payable as per declaration made on the above. | 22,66,872/- |
| 4 | Tax paid on the declaration made | 6,12,000/- |
| 5 | Date of order u/s 245D(1) | 23,10,2003 |
| 6 | Due date of payment of Tax | 01.01.2004 |
| 7 | Tax paid upto 01.04.2004 | 6,12,000/- |
| 8 | Balance Tax payable | 16,54,872/- |
| 9 | Interest u/s 245D(2C) from 1.1.2004 to 26.3.2010 at the rate of 15% |
13,03,211/- |
Interest u/s 158BFA
| 6 | Due date of return | 08.11.2002 |
| 7 | Return filed on | 10.12.2002 |
| 8 | Delay | 1 Month |
| 9 | Net taxable income | 37,04,040/- |
| 10 | Interest Chargeable u/s 158BFA @1% per month | 37,040/- |
4. On appeal against the aforesaid order of the AO, levying interest u/s 245D(2C) & 1 58BFA of the Act, the ld. CIT(A) concluded as under:-
“5.Finding on ground of Appeal No.1:
The issue to be decided in this ground of appeal is whether the revised offer of additional income by the appellant. which was made during the last date of hearing of proceedings under section 245D(4) of the IT Act on 2.03.201 0 (the final order was passed on 26.03.10) could be termed as revision by the applicant of his original application filed u/s 245C(1) and which was subsequently admitted u/s 245D(1) by the Commission vide order dated 23.10.03. In this context it is noted from the order u/s 245D( 4) that the case was heard on 24.09.09, 03.11.09, 18.11.09,19.01.10 and lastly on 02.03.10. It is also seen from para 5 of 245D(4) order that it is on 02.03.10 that the appellant had made this offer of additional income which has finally been accepted by the Settlement Commission ( para 8 of the order). The point being made by this AO is that by the offer made on 02.03.10 the appellant has revised the original application made u/s 245C. and therefore in view of such retrospective revision the assessee is also liable to pay interest u/s245D(2C) on this revised income from 01.01.04 itself, as the applicant in the opinion of the AO has defaulted in payment of the additional amount of income tax payable on the income disclosed in the original application.
On the other hand submission made by the applicant on such charging of interest u/s 245D(2C) veers around the proposition that there has been no revision of original application tiled by the appellant before the Hon’ble Commission u/s 245C(1) and therefore the question of revision of additional income does not arise. That the offer of additional income made during the proceedings u/s 245 D( 4) was culmination or the detailed oral hearings and arguments which continued in the Commission on the dates referred to in the 245D(4) order. That essentially the revised additional income offer was based on revision of net profit rate from 2% to 6% on the undisclosed turnover of fabrics and was with a view to buying peace and settling at rest all disputable issues. This offer of the applicant made on the last day of hearing before the Commission has been accepted by the commission and forms part of the settlement order dated 26.03.10. It has been submitted that thus the determination of additional income is in substance quantification by the Commission of additional income, though on the face of it offered by the applicant on 02.03.10.
I have carefully considered the issue at hand and am of the view that there are only two provisions u/s 245D under which charging of interest can be made. The first point in time when charging or interest can be made is u/s 245D (2A) r. w.s. 245D(2C) of the Act and the second point in time arises u/s 245D(6A). Under these provisions on receipt of an application u/s 245C the Commission upon hearing the applicant may allow the application to be proceeded with and the assessee shall within 35 days of the receipt of the copy of the order under sub section (1) of section 245D has to pay the additional amount of income tax payable on the income disclosed in the application. However where the additional of amount of income tax is not paid under sub section (2A) of 245D then the assessee shall be liable to pay simple interest at 15% per annum on the amount remaining unpaid from the date of expiry of the period of 35 days referred to in sub section (2C). Thus as envisaged in these provisions the applicant has to make payment of additional amount of income tax on the income disclosed in the application made in the under section 245C(1) once this application is admitted for further proceeding with by an order passed 245C(1). Strictly speaking under the provisions in section 245C(1),.245D(1), 245D(2A) there is no scope for revising an application made under section 245C, more particularly when such application has been allowed to be proceeded with vide order u/s 245D(1). To put it differently once an application is admitted vide order u/s 245D(1) any further offer of additional income can only he done during the course of proceedings u/s 245D(4)as has happened in this case. On a reading of section 245D (4) of the Act it is noted that the final order passed by the Settlement Commission is after examination of records and the report of the Commissioner and after giving opportunity to the appellant and to the Commissioner to be heard. Now such an order would more often than not may result in enhancement of the initial offer of additional income made by the applicant under section 245C(1). Such enhancement can take various forms. There can be a case where upon elaborate hearing and argument it is the applicant himself who may be called upon further offer additional income which is more than that disclosed in his original application and it is this offer which is finally accepted by the Commission in its order u/s 245D (4). There could be an another Illustration where the Commission upon hearing both the parties determines the additional income by itself which is more than the amount offered by the applicant in his original application. Now in both these situations can it be said that in the first case there would being charging of interest u/s 245D(2C)) on the premise that the applicant has revised the original application while in the, latter case there would he no charging of interest u/s 245D(2C) as in this case the determination of additional income has been done by the Commission itself. I am afraid that such interpretation would be against the letter and spirit of the provisions contained in S. 245C(1),. 245D(1 ),(2),(2A), (2B), ( 2C), (4) & (6A) . This is because firstly there is no provision in Chapter XIX-A of the IT Act which provides for a subsequent revision of the original application and that too in a case where such application has already been admitted by the Commission and on which additional amount of tax and interest in default of payment of tax has already been paid. Secondly. there is no way that the assessee could have visualized as to on which figure the final determination of settlement amount would ultimately be made and consequently he could not have foreseen the additional taxes and interest thereon. Lastly, the process of settlement is the outcome of detailed submission and arguments from both sides which can in a give case result in offer of additional tax by the applicant itself which is in the nature of buying peace for setting to rest disputable issues. In the facts of this case it is this form which has taken place and as discussed above the additional income has been finally estimated at 6% of profit on undisclosed sales (there is no dispute on the figure of undisclosed sales) in fabrics. Merely based on this fact. there should be no case for charging of interest u/s 245D (2C). In view of this discussion I am inclined to hold that the undisclosed income finally settled at Rs. 37.04.040/-was on account of order passed hy the Settlement Commission u/s245D(4) of the Act and the taxes on this income and interest in default of payment. if any. can only be made strictly in terms of section 245D(6A) of the Act. It is also noted that the direction given by the ITSC to the AO for charging interest as per law was with reference to charging of interest uls l58BFA which is mandatory in nature and whose waiver cannot be allowed. This view emanates from the tact that the direction regarding charging of interest as per law. immediately follows the sentence regarding the mandatory charging of interest u Is 158BFA. That thus there has been no specific direction by the ITSC for charging interest u/s 245D(2C) of the Act: While coming to the above conclusion the following observations made by IT AT Mumbai in ACIT vs. Smt. Leonie M. Almeida 129 TTJ 747 have also been relied upon.-
“4.3. There are also provisions for charge of interest in the scheme of Chapter XIX-A of the IT Act relating to the settlement of a case by Settlement Commission. The assessee under section 245C of the Act may file an application for settlement disclosing particular income. The Commission after following procedure prescribed may proceed to deal with the application or may reject the application and therefore the demand raised by the AO ,in the assessment does not get vacated only on filing of application before the Settlement Commission. The Settlement Commission has jurisdiction over the assessee only when it decides to proceed with the application and admits the application under section 245D(1). Once the application is admitted, the assessee is required to pay the additional demand on the basis of income disclosed in the application within 35 days of the order of the Commission under section 245D(1) and in case the demand is not paid within the time allowed interest at prescribed rate is chargeable under 245D(2C). Similarly, when the Settlement Commission passes final order under section 245D(4) the tax payable in pursuance of such an order is required to be paid by the assessee within 35 days of the receipt of copy of the order and for failure to do so, the assessee is liable to pay interest at the prescribed rate under section 245D(6A). Thus the interest payable under section 220(2) and the interest payable under sections 245D(2C) and 245D(6) are in different contexts and have to be levied independently.
Accordingly. in view of above discussion,. the AO is directed to revise the calculation of interest charged uls 245D(2C) of the Act in terms of the above findings. The Ground of appeal No.1 is therefore allowed in favour of the appellant.
So far as Ground of Appeal No 2 is concerned the AO has charged interest 158BF A of the Act amounting to Rs.37.040/- for alleged default of late tiling of Block return. With respect to this charging or interest there are clear directions or the ITSC in para 10 of its order wherein the following has been held “interest u/s 158BFA being mandatory in nature, its waiver cannot be allowed. The A.O. is directed to charge interest as per law “. In view of the specific finding of the Commission and the fact that the above provision is mandatory in nature. this Ground of appeal is dismissed.”
5. The Revenue is now in appeal before us against the aforesaid findings of the ld. CIT(A), deleting interest levied u/s 245D(2C) of the Act. The ld. DR while carrying us through the relevant provisions of section 245D of the Act and order of the Settlement Commission contended that since the assessees suo motu offered additional income to tax before the Settlement Commission, the AO was justified in levying interest u/s 245D (2C) of the Act.
6. On the other hand, the ld. AR on behalf of the assessee while carrying us through the procedure followed by the Settlement Commission in disposing of their application, supported the findings of the ld. CIT(A). The ld. AR argued that in terms of provisions of sec. 245I of the Act, the AO had merely to give effect to the order of Settlement Commission and could not impose interest, which did not form part of the order of the Settlement Commission. While inviting our attention to para 10 of the order of the Settlement Commission, the ld. AR pleaded that interest u/s 158BFA(2) of the Act being mandatory in nature, could not be waived and therefore, the Settlement Commission directed the AO to charge interest as per law.. Nowhere in the said order, Settlement Commission directed levy of interest u/s 245D(2C) of the Act, the ld. AR added.Inter alia, the ld. AR relied upon the decision dated 26.03.2009of the ITAT, Mumbai “A” Bench in ACIT Vs. Smt. Leonie M. Almeida,129 TTJ (Mum)747.
7. We have heard both the parties & gone through the facts of the case as also the aforesaid decision relied upon by the ld. AR. At the out set, we may refer to the relevant extant provisions of section 245D of the Act, which read as under:-
“245D. Procedure on receipt of an application under section 245C.
(1) On receipt of an application under section 245C, the Settlement Commission shall call for a report from the Commissioner and on the basis of the materials contained in such report and having regard to the nature and circumstances of the case or the complexity of the investigation involved therein, the Settlement Commission, shall, where it is possible, by order, reject the application or allow the application to be proceeded with within a period of one year from the end of the month in which such application was made under section 245C:
Provided that an application shall not be rejected under this sub-section unless an opportunity has been given to the applicant of being heard:
Provided further that the Commissioner shall furnish the report with in a period of forty-five days of the receipt of communication from the Settlement Commission in case of all applications made under section 245C on or after the 1st day of July, 1995 and if the Commissioner fails to furnish the report within the said period, the Settlement Commission may make the order without such report.
(2) A copy of every order under sub-section (1) shall be sent to the applicant and to the Commissioner.
(2A) Subject to the provisions of sub-section (2B), the assessee shall, within thirty-five days of the receipt of a copy of the order under sub-section (1) allowing the application to be proceeded with, pay the additional amount of income-tax payable on the income disclosed in the application and shall furnish proof of such payment to the Settlement Commission.
(2B) If the Settlement Commission is satisfied, on an application made in this behalf by, the assessee, that he is unable for good and sufficient reasons to pay the additional amount of income-tax referred to in sub-section (2A) within the time specified in that sub-section, it may extend the time for payment of the amount which remains unpaid or allow payment thereof by instalments if the assessee furnishes adequate security for the payment thereof.
(2C) Where the additional amount of income-tax is not paid within the time specified under sub-section (2A), then, whether or not the Settlement Commission has extended the time for payment of the amount which remains unpaid or has allowed payment thereof by instalments under sub-section (2B), the assessee shall be liable to pay simple interest at fifteen per cent. per annum on the amount remaining unpaid from the date of expiry of the period of thirty-five days referred to in sub-section (2A).
(2D) Where the additional amount of income-tax referred to in sub-section (2A) is not paid by the assessee within the time specified under that sub-section or extended under sub-section (2B), as the case may be, the Settlement Commission may direct that the amount of income-tax remaining unpaid, together with any interest payable thereon under sub-section (2C), be recovered and any penalty for default in making payment of such additional amount may be imposed and recovered, in accordance with the provisions of Chapter XVII, by the Assessing Officer having jurisdiction over the assessee.
(3) Where an application is allowed to be proceeded with under sub-section (1), the Settlement Commission may call for the relevant records from the Commissioner and after examination of such records, if the Settlement Commission is of the opinion that any further enquiry or investigation in the matter is necessary, it may direct the Commissioner to make or cause to be made such further enquiry or investigation and furnish a report on the matters covered by the application and any other matter relating to the case.
(4) After examination of the records and the report of the Commissioner received under sub-section (1), and the report, if any, of the Commissioner received under sub-section (3), and after giving an opportunity to the applicant and to the Commissioner to be heard, either in person or through a representative duly authorised in this behalf, and after examining such further evidence as may be placed before it or obtained by it, the Settlement Commission may, in accordance with the provisions of this Act, pass such order as it thinks fit on the matters covered by the application and any other 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).
(4A) In every application allowed to be proceeded with under sub-section (1), the Settlement Commission shall, where it is possible, pass an order under sub-section (4) within a period of four years from the end of the financial year in which such application was allowed to be proceeded with.
(5) Subject to the provisions of section 245BA, the materials brought on record before the Settlement Commission shall be considered by the Members of the concerned Bench before passing any order under sub-section (4) and, in relation to the passing of such order, the provisions of section 245BD shall apply.
(6) Every order passed under sub-section (4) shall provide for the terms of settlement including any demand by way of tax, penalty or interest, the manner in which any sum due under the settlement shall be paid and all other matters to make the settlement effective and shall also provide that the settlement shall be void if it is subsequently found by the Settlement Commission that it has been obtained by fraud or misrepresentation of facts.
(6A) Where any tax payable in pursuance of an order under sub-section (4) is not paid by the assessee within thirty-five days Of the receipt of a copy of the order by him, then, whether or not the Settlement Commission has extended the time for payment of such tax or has allowed payment thereof by instalments, the assessee shall be liable to pay simple interest at fifteen per cent. per annum on the amount remaining unpaid from the date of expiry of the period of thirty-five days aforesaid.
(7) Where a settlement becomes void as provided under sub-section (6), the proceedings with respect to the matters covered by the settlement shall be deemed to have been revived from the stage at which the application was allowed to be proceeded with by the Settlement Commission and the Income-tax authority concerned, may, notwithstanding anything contained in any other provision of the Act, complete such proceedings at any time before the expiry of two years from the end of the financial year in which the settlement became void.
(8) For the removal of doubts, it is hereby declared that nothing contained in section 153 shall apply to any order passed under sub-section (4) or to any order of assessment, re-assessment or re-computation required to be made by the Assessing Officer in pursuance of any directions contained in such order passed by the Settlement Commission and nothing contained in the proviso to sub-section (1) of section 186 shall apply to the cancellation of the registration of a firm required to be made in pursuance of any such directions as aforesaid.
7.1 As is apparent from the aforesaid provisions, the procedure laid down in section 245D of the Act, envisages that on receipt of the application under section 245C(1) of the Act, the Settlement Commission is required to forward a copy of the application filed in the prescribed form (No. 34B), containing full details of issues for which application for settlement is made, the nature and circumstances of the case and complexities of the investigation involved, except the annexures, referred to in item No. 11 of the form and to call for a report from the CIT within a period of 45 days from the date of communication by the Settlement Commission. Thereafter, the Settlement Commission, on the basis of the said report and having regard to the facts and circumstances of the case and/or complexity of the investigation involved therein may by an order, allow the application to be proceeded with or reject the application. After order u/s 245D(1) is made by the Settlement Commission, Rule 8 of the 1987 Rules mandates that a copy of the annexure to the application, together with a copy of each of the statements and other documents accompanying such annexure shall be forwarded to the CIT and further report shall be called from the CIT. The Settlement Commission is also empowered to direct the CIT to make further enquiry and investigations in the matter and furnish his report. Thereafter, after examining the record, CIT’s report and such further evidence that may be laid before it or obtained by it, the Settlement Commission is required to pass an order as it thinks fit on the matter covered by the application and in every matter relating to the case not covered by the application and referred to in the report of the CIT under sub-section (1) or sub-section (3) of the said section. Thus, even when the Settlement Commission decides to proceed with the application, it is not denuded of its power to examine as to whether in his application u/s 245C(1) of the Act, the assessee made a full and true disclosure of his undisclosed income and the report(s) of the CIT and other documents coming on record at different stages of the consideration of the case, before or after the Settlement Commission has decided to proceed with the application, are most germane to determination of the said question. A “full and true” disclosure of income, which had not been previously disclosed by the assessee, being a pre-condition for a valid application under section 245C(1) of the Act, the scheme of Chapter XIX-A does not contemplate revision of the income so disclosed in the application against item No. 11 of the form. Moreover, if an assessee is permitted to revise his disclosure, in essence, he would be making a fresh application in relation to the same case by withdrawing the earlier application. In this regard, section 245C(3) of the Act which prohibits the withdrawal of an application once made under sub-section (1) of the said section is instructive in as much as it manifests that an assessee cannot be permitted to resile from his stand at any stage during the proceedings. In nutshell, in the scheme of Chapter XIX-A, there is no stipulation for revision of an application filed under section 245C(1) of the Act and thus, the natural corollary is that determination of income by the Settlement Commission has necessarily to be with reference to the income disclosed in the application filed under the said section in the prescribed form. Moreover sub¬section(5) of sec. 245D mandates that the materials brought on record before the Settlement Commission shall be “considered” by the members before passing any final order under sub-section (4). The word “consideration” means an independent examination of the evidence and materials brought on record before the ITSC by the members and application of mind thereto with a view to independently assess the materials and evidence, whether adduced by the assessee-applicant or by the CIT and come to a conclusion by themselves. Here we may point out that the Hon’ble Apex Court in Ajmera Housing Corporation vs. CIT,193 Taxman193(SC) held that in the scheme of Chapter XIX-A, there is no stipulation for revision of an application filed under section 245C(1) of the Act .
7.2 As is evident from the aforesaid procedure laid down u/s 245D of the Act, once the application is admitted, the assessee is required to pay the additional demand on the basis of income disclosed in the application within 35 days of the order of the Commission u/s 245D(1) and in case the demand is not paid within the time allowed interest at prescribed rate is chargeable under 245D(2C). There is no material before us nor there is anything to suggest that in the order of the Settlement Commission that the assessee did not comply with aforesaid order u/s 245D(1) of the Act. Similarly, when the Settlement Commission passes final order under section 245D(4) of the Act, the tax payable in pursuance of such an order is required to be paid by the assessee within 35 days of the receipt of copy of the order and for failure to do so, the assessee is liable to pay interest at the prescribed rate under section 245D(6A). Thus the interest payable under sections 245D(2C) and 245D(6) are in different contexts and are levied independently. In the instant case, the ld. CIT(A) after analyzing the procedure laid down under the provisions of sec. 245D of the Act concluded that there being no scope for revising an application made under section 245C of the Act, charging of interest u/s 245D(2C) of the Act on the premise that the applicant revised the original application is against the letter and spirit of the provisions contained in S. 245C(1), & 245D of the Act. The ld. CIT(A) also concluded that the process of settlement is the outcome of detailed submission and arguments from both sides and accordingly , the additional income was finally estimated @ 6% of the undisclosed sales and consequently there is no case for charging of interest u/s 245D (2C) nor there is any such direction of the Settlement Commission. As pointed out earlier ,the Hon’ble Apex Court in Ajmera Housing Corporation (supra) held that in the scheme of Chapter XIX-A, there is no stipulation for revision of an application filed under section 245C(1) of the Act . Thus, the determination of income by the Settlement Commission is necessarily with reference to the income disclosed in the application filed under the said section in the prescribed form. Moreover, in terms of provisions of sec.245I of the Act, every order of settlement passed under sub-section (4) of section 245D is conclusive as to the matters stated therein and no matter covered by such order , save as otherwise provided in the Chapter XIXA, can be reopened in any proceeding under this Act or under any other law for the time being in force. In view of the foregoing, especially when the Revenue did not place any material before us ,controverting the aforesaid findings of the ld. CIT(A) nor referred us to any contrary decision, so as to enable us to take a different view in the matter, we are not inclined to interfere. Therefore, ground nos.1 & 2 in the appeal are dismissed.
8. Ground no.3 in these four appeals of the Revenue, being general in nature nor any submissions having been made before us on this ground, does not require any separate adjudication while no additional ground having been raised before us in terms residuary ground no.4 in these appeals, accordingly, all these grounds are dismissed.
9. No other argument or submission was made before us. 10. In the result, these four appeals are dismissed.
Whether 234B interest leviable on sec.245D(4) order