In ABC Dubash Mining & Anr v. Income Tax Settlement Commission, the Calcutta High Court held that a finding of fact made by the Settlement Commission is not open to judicial review unless it is established that, such finding of fact suffers from perversity or is vitiated due to bias or malice.
The approached the High Court against the order of the Settlement Commission wherein it rejected the application of the assessee by finding that the assessee had not made a full and true disclosure of its income. Before the Court the assessee contended that the purpose of a settlement is to ensure that the revenue receives its due share of the taxes without an elaborate process of adjudication and at the same time an assessee is granted some relief in the assessment and other defaults.
Justice Debansu Basak, observed that the assessee is entitled to approach the Settlement Commission for the purpose of settlement of tax liability or any other liability that may arise under the provisions of the Income Tax Act subject to a condition that he/she has to make a full and true disclosure of its income, the manner in which the income has been derived, the additional amount of income tax payable on such income and such other particulars as may be prescribed to the Commission.
It was noted that the assessee has unconditionally participated in the settlement proceedings subsequently. The correctness of the disclosures made by the assessee was taken up for consideration by the Settlement Commission on different occasions. However, assessee could not satisfy the Settlement Commission as to the correctness of the disclosures made to it. The assessee was found not to have made full and true disclosure of its income.
Dismissing the appeal, the Court said that “a finding of fact made by the Settlement Commission is not open to judicial review unless it is established that, such finding of fact suffers from perversity or is vitiated due to bias or malice. None of the grounds known to law to upset a finding of fact returned by a Settlement Commission has been substantiated in the facts of the present case. The findings of the Settlement Commission on the correctness of the disclosures made by the assessee before it have not been substantiated to be perverse. The contention that, the Settlement Commission ought to have arrived at the tax liability on the materials disclosed before it, is unacceptable. For the Settlement Commission to assume jurisdiction, it must return a finding that, the assessee before it has made a full and true disclosure of its income and the other matters referred to Section 245C(1). In the present case, the assessee did not made a full and true disclosure of its income before the Settlement Commission. Such is the finding of the Settlement Commission. Such finding has not been substantiated to be perverse or to be suffering from such a legal infirmity so as to warrant an interference by a Writ Count. It is not for the Writ Court to exercise appellate jurisdiction over an order passed by the Settlement Commission.”
Read the full text of the Judgment below.
