The Supreme Court of India directed re-consideration to the Settlement Commission which passed the order under section 245(D)(1) of the Income Tax Act,1961 without giving sufficient opportunity to the assessee to disclose the undisclosed income.
Shree Nilkanth Developers, the appellant assessee was a partnership firm constituted with effect from the date of 01.05.2009 and was in the business of real estate the appellant filed an appeal against the order passed by the High Court of Gujarat for confirming the order of Settlement Commission without allowing the assessee.
Ramesh P. Bhatt, the counsel for the assessee contended that the additional amount of Rs.56 lacs was offered for taxation and a settlement was arrived at on that basis but the High Court had by setting aside the order of the Settlement Commission denied the benefit of settlement to the Assessee.
Further submitted that the subsequent re-assessment made after setting aside the order of the Settlement Commission was not just and proper and that if this Court was to set aside the order of the High Court.
Aishwarya Bhati, the counsel for the revenue relied on the decisions made by the lower authorities and contended that the order passed by the settlement commission was as per the law and liable to be sustained.
The Court observed that there was a real object and purpose for setting up of the Settlement Commission as an Assessee, who was allowed to disclose the undisclosed income to seek benefit in the form of immunity from penalty and prosecution.
The two-member bench comprising B.V. Nagarathna and Ujjal Bhuyan set aside the order of the High Court as well as the order of the Settlement Commission and remanded the matter to the Settlement Commission for re-consideration while allowing the appeal filed by the assessee.
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