M/S S.R. Ferro Alloys Through Brajendra Sharma vs. Income Tax Settlement Commission

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RP/1228/2017HC Madhya Pradesh15 November 2017Author: HON'BLE SHRI JUSTICE S.C.SHARMA2 pages
For Petitioner: Mukesh Agrawal
AI SummaryAllowed

What did the High Court hold?

The Tribunal held that the report of M/s. Geonko India Pvt. Ltd., which was extracted by and relied upon by Mr. Pilliwar, should consequently stand quashed along with the Volumetric Report. Furthermore, the coordinates obtained through Total Station Method, on the basis of which Mr. Pilliwar prepared his report, also consequently stand quashed. The Tribunal substituted a paragraph in its earlier order to reflect this clarification. The matter was remanded back to the Settlement Commission to process the petitioner's application afresh, ignoring the Volumetric Report dated 24/07/2012, the report of M/s. Geonko, and the coordinates prepared by Mr. Pilliwar. The Settlement Commission was directed to consider all other relevant documents and materials to pass an appropriate order in accordance with law. The review petition was allowed, and the present order was to be read conjointly with the earlier order dated 27/04/2017.

What were the facts?

The applicant company filed a writ petition challenging an order dated 17/02/2017 passed by the Income Tax Settlement Commission (ITSC) under Section 245D(4). The ITSC had declared the settlement application abated due to alleged non-disclosure of unaccounted income, based on a Volumetric Report dated 24/07/2012 submitted by the Income Tax Department. This Court, by an order dated 27/04/2017, had set aside the ITSC's order and quashed the Volumetric Report. A review petition was filed by the Revenue seeking clarification, arguing that a report by M/s. Geonko India Pvt. Ltd., engaged by Mr. Pilliwar, had not been quashed, and neither had the coordinates used in its preparation.

What were the issues?

1. Whether the report of M/s. Geonko India Pvt. Ltd. and the coordinates prepared by Mr. Pilliwar, which formed the basis of the Volumetric Report dated 24/07/2012, should also be quashed, given that the Volumetric Report itself was quashed. Assessee's Contention: The assessee, through its counsel, did not dispute the fact that Mr. Pilliwar was engaged by M/s. Geonko India Pvt. Ltd. and that Mr. Pilliwar's report included M/s. Geonko India Pvt. Ltd.'s report. Revenue's Contention: The Revenue, through its counsel, argued that the report submitted by M/s. Geonko India Pvt. Ltd. had not been quashed by this Court, nor had the coordinates used in its preparation. They prayed that this report should be relied upon by the Settlement Commission.

Which sections of the Income-tax Act were involved?

Section 245D(4)

AI-generated summary — verify with the full judgment below

- 1 - Review Petition No.1228/2017 Indore, dt. 15/11/2017 Mr. Shashwat Seth, learned counsel for the applicant.

Ms. Veena Mandlik, learned counsel for the respondents.

The present review petition / clarification / modification has been filed for clarifying the order dated 27/04/2017 passed by this Court in Writ Petition No.1350/2017.

The facts of the case reveal that the applicant Company has preferred a writ petition against the order dated 17/02/2017 passed under Section 245D(4) of the Income Tax Settlement Commission, Principal Bench, New Delhi declaring the settlement application filed by the petitioner as abated on account of it not being true and full disclosure of unaccounted income on the basis of a report submitted by the Income Tax Department i.e.

Volumetric Report dated 24/07/2012.

This Court by a detailed and exhaustive order has set aside the order passed by the Settlement Commission dated 17/02/2017 and has also quashed the Volumetric Report dated 24/07/2012. The necessity of filing the present review petition has arose as a letter was written by learned Commissioner of Income Tax Department to the Settlement Commission on 21/09/2017 wherein he has prayed that report submitted by M/s. Geonko India Pvt. Ltd. engaged by Mr. Pilliwar has to be relied upon as report of M/s.

Geonko India Pvt. Ltd. has not been quashed. It was also stated that this Court has not quashed the coordinates also.

Operative paragraph i.e. paragraph No.87 of the judgment reads as under:- “83- In light of the aforesaid, this Court is of the considered opinion that the order passed by the Settlement Commission dated 17/02/2017 passed under Section 245D(4) deserves to be quashed and is accordingly quashed. The volumetric report dated 24/07/2012 prepared by the Income Tax Department through a private architect is also quashed and the matter is remanded back to the Settlement Commission to process the petitioner's application and to pass a final order afresh ignoring the volumetric report dated 24/07/2012. The Settlement Commission shall consider all the documents recovered during the search and seizure and other material produce by the department and shall be free to pass appropriate order in accordance with law.

With the aforesaid, writ petition stands allowed.”

This Court has carefully gone through the entire record. The fact remains that Mr. Pilliwar has been engaged by M/s. Geonko India Pt. Ltd. and the report submitted by Mr. Pilliwar is in fact includes the report of M/s. Geonko India Pvt. Ltd. The aforesaid fact has not been disputed by Ms. Veena Mandlik, learned counsel for the respondent.

Resultantly, in place of the aforesaid paragraph following paragraph is hereby substituted:- “The Volumetric Report dated 24/07/2012 prepared by the Income Tax Department through a private architect is also quashed and the matter is remanded back to the Settlement Commission to process the petitioner's application and to pass a final order afresh ignoring the volumetric report dated 24/07/2012. The report of M/s.

Geonko engaged by Mr. Pilliwar which is extracted by Mr. Pilliwar and relied upon by the said Mr. Pilliwar shall also consequently stand quashed. The coordinates obtained through Total Station Method on the basis of which Mr. Pilliwar has prepared his report also consequently stand quashed. The matter is remanded back to the Settlement Commission to process the petitioner's application and to pass a final order afresh ignoring the Volumetric Report dated 24/07/2012 and also ignoring the report of M/s.

Geonko and ignoring the coordinates prepared by Mr. Pilliwar. The Settlement Commission shall consider all the documents recovered during the search and seizure and other material produce by the department and shall be free to pass appropriate order in accordance with the law.

With the aforesaid, writ petition stands allowed.”

With the aforesaid, review petition stands allowed. The present order shall be read conjointly with the order dated 27/04/2017. Certified Copy as per rules. (S. C. SHARMA) J U D G E (ALOK VERMA) J U D G E Tej Tej Prakash Vyas 2017.11.21 16:31:30 -08'00'

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