Case Law Details
B. Nanji Enterprise Ltd.Vs DCIT (Gujarat High Court)
From the material on record,it can be seen that the sum of Rs.74 lakhs was offered to tax by Bhikhubhai N. Padsala in his settlement application. Such application has been granted by the Settlement Commission by passing order of settlement. By very statutory scheme of provisions, acceptance of such income in the hands of Bhikhubhai N. Padsala would have to be preceded by payment to tax. We have therefore proceeded on the basis that the Settlement Commission accepted the said sum as income of Bhikhubhai N. Padsala and the department has already received the tax and interest on such income. That being the position, it would not be possible for the department to tax the same income once again in the hands of the present assessee. This would be for multiple reasons. Firstly, there is nothing on record to suggest that before the Settlement Commission, the declaration of Bhikhubhai N. Padsala in this respect was opposed by the Revenue. Secondly, the Settlement Commission having accepted such settlement, with or without the opposition by the Revenue, finality of the conclusions of the Settlement Commission would attached in terms of section 245I of the Act. Thirdly, the department concedes that the order of Settlement Commission has not been challenged further. Under the circumstances, allowing the department’s appeal, levying tax on the same amount from the assessee would be wholly impermissible.
FULL TEXT OF THE HIGH COURT JUDGMENT / ORDER IS AS FOLLOWS
1. These Tax Appeals involved two assessees but the facts being closely similar, the Income Tax Appellate Tribunal had dealt with the department’s appeals by a common judgment, which is impugned in these Tax Appeals. In Tax Appeal No.276 of 2017, notice was issued on 02.05.2017. Looking to the similar question arising in Tax Appeal No.277 of 2017, though no such formal notice was issued, facts being similar, we have heard learned advocate for the Revenue in both the appeals and propose to dispose of the Tax Appeals finally on following substantial question of law:
“Whether the Income Tax Appellate Tribunal committed an error in taxing the undisclosed income in the hands of the assessee company when the same amount was disclosed by the Director of the Company in his application for settlement filed before the Settlement Commission and which application was also allowed by the Settlement Commission passing final order under section 245D(4) of the the Income Tax Act, 1961 which has become final ?”
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