Lion Dates Impex (P) Ltd Vs Chairman (Madras High Court)
Settlement Cannot Become an Ambush: Madras HC Sets Aside Rejection u/s 245D(4) for Bias, Last-Minute Report & Denial of Hearing-Directs Interim Board to Reconsider Application
Summary: The Madras High Court has set aside an order of the Income Tax Settlement Commission rejecting an assessee’s settlement application for alleged failure to make a full & true disclosure. The Court found that the Commission relied upon a detailed report filed by the AO on the last date of hearing, passed its order on the very next day without permitting the assessee to respond, deviated from the statutory procedure & suffered from a reasonable likelihood of bias. Despite the abolition of the Settlement Commission, the Court directed the Interim Board for Settlement to treat the restored application as pending & decide it afresh within six weeks.
Search, returns & settlement application
The assessee-company was engaged in purchasing & selling dates, oats & honey and manufacturing syrups, jams & squash under the brand name “Lion Dates.”
A search u/s 132 was conducted on 17.07.2013 at its business premises & the residences of its directors. Statements were recorded u/s 132(4), followed by another statement u/s 131.
