Law: Income Tax Act, 1961

Section: 245C

Section 245C, read with section 69C, of the Income-tax Act, 1961 - Settlement Commission - Application for settlement of cases (Applicability of) - Assessment years 2010-11 to 2012-13 - A scrutiny assessment was undertaken, in case of second respondent, i.e., assessee, showing that it had purchased materials/goods from various parties - In assessment proceedings, Assessing Officer made addition to assessee's income under section 69C taking a view that purchases made from some parties were bogus - Assessee filed an application under section 245C before Settlement Commission for assessment years in question - Settlement Commission passed an order under section 245D(2C) directing assessee's application for settlement to be proceeded with - It was found from records that at time of filing application before Settlement Commission, assessment proceedings were still pending - Moreover, Settlement Commission took a majority view that disclosure of additional income at stage at which application was brought before it appeared to be prima facie full and true - Whether in aforesaid circumstances, impugned direction issued by Settlement Commission could not be interfered with - Held, yes [Para 40] [In favour of assessee] FACTS â–  A scrutiny assessment was undertaken, in the case of second respondent i.e. assessee showing that it had purchased materials/goods from various parties. Some parties, whose names appeared in the list, were suspicious. â–  The names of such suspicious, bogus dealers were put up on the website of the Maharashtra Sales Tax Department. â–  Relying upon aforesaid information, the Assessing Officer made certain addition to assessee's income under section 69C. â–  The Assessing Officer further noticed that certain unexplained amount was deposited in the bank account of assessee-firm. He thus made addition to assessee's income under section 68 as well. â–  The assessee filed an application under section 245C before the Settlement Commission for the assessment years in question. â–  The Settlement Commission, in its order passed under section 245D(2C), in its majority view, agreed with the assessee firm by holding that…